<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 9, 1999
REGISTRATION NO. 333-81213
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
------------------------
DURA AUTOMOTIVE SYSTEMS, INC.*
(Exact name of registrant as specified in its charter)
------------------------
<TABLE>
<S> <C> <C>
DELAWARE 3714 38-3185711
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification
incorporation or organization) Number)
</TABLE>
------------------------
DURA OPERATING CORP.*
(Exact name of registrant as specified in its charter)
------------------------
<TABLE>
<S> <C> <C>
DELAWARE 3714 38-2961431
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification
incorporation or organization) Number)
</TABLE>
4508 IDS CENTER, MINNEAPOLIS, MINNESOTA 55402
TELEPHONE: (612) 342-2311
(Address, including zip code, and telephone number, including area code, of
Registrants' principal offices)
STEPHEN E.K. GRAHAM
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
DURA AUTOMOTIVE SYSTEMS, INC.
2791 RESEARCH DRIVE, ROCHESTER HILLS, MI 48309
TELEPHONE: (248) 299-7500
(Address, including zip code, and telephone number, including area code, of
Agent for Service)
Copy to:
DENNIS M. MYERS, ESQ.
KIRKLAND & ELLIS
200 EAST RANDOLPH DRIVE, CHICAGO, IL 60601
TELEPHONE: (312) 861-2000
*The companies that are listed on the next page are also included in this Form
S-4 Registration Statement as additional Registrants.
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: The
exchange offer will commence 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, please check the following box: / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
WILL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT BECOMES EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.
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- --------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
JURISDICTION I.R.S. EMPLOYER
OF IDENTIFICATION
EXACT NAME OF ADDITIONAL REGISTRANTS* FORMATION NO.
- -------------------------------------------------------------------------------------- ------------- ----------------
<S> <C> <C>
Dura Automotive Systems, Inc., Column Shifter Operations.............................. Michigan 38-2121748
Universal Tool & Stamping Company Inc................................................. Indiana 35-0797817
Dura Automotive Systems Cable Operations, Inc......................................... Delaware 38-3383557
Adwest Electronics, Inc............................................................... Delaware 38-3223055
Adwest Western Automotive, Inc........................................................ Michigan 38-3223054
X.E. Co............................................................................... Michigan 38-3334994
Dura Automotive Systems of Tennessee, L.P............................................. Tennessee 62-1664873
Dura Automotive Systems of Indiana, Inc............................................... Indiana 35-1188181
Anderson Industries, Inc.............................................................. Delaware 36-3018445
Hydro Flame Corporation............................................................... Utah 87-0215439
Atwood Industries, Inc................................................................ Illinois 36-3036330
Atwood Automotive Inc................................................................. Michigan 38-2112709
Mark I Molded Plastics, Inc........................................................... Michigan 38-1874088
Mark I Molded Plastics of Tennessee, Inc.............................................. Tennessee 62-1109669
</TABLE>
- ------------------------
* The address for each of the additional Registrants is c/o Dura Automotive
Systems, Inc., 2791 Research Drive, Rochester Hills, Michigan 48309 and the
primary standard industrial classification code number for each of the
additional Registrants is 3714.
<PAGE>
SUBJECT TO COMPLETION, DATED AUGUST 9, 1999
THIS INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THESE
SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED WITH THE SEC
IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL NOR IS IT AN OFFER TO BUY
THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.
<PAGE>
<TABLE>
<S> <C>
PROSPECTUS [LOGO]
</TABLE>
DURA OPERATING CORP.
EXCHANGE OFFER FOR
$300,000,000
9% SENIOR SUBORDINATED NOTES DUE 2009
AND
[EURO]100,000,000
9% SENIOR SUBORDINATED NOTES DUE 2009
UNCONDITIONALLY GUARANTEED ON A SENIOR SUBORDINATED BASIS BY
DURA AUTOMOTIVE SYSTEMS, INC.
- ----------------------------------------------------------------
We are offering to exchange an aggregate principal amount of up to:
- - $300,000,000 of our new 9% senior subordinated notes due 2008, Series B, for
a like amount of our outstanding 9% senior subordinated notes; and
- - [EURO]100,000,000 of our new 9% senior subordinated notes due 2008, Series
B, for a like amount of our outstanding 9% senior subordinated notes.
MATERIAL TERMS OF THE EXCHANGE OFFER
- - Expires 5:00 p.m., New York City time, September 8, 1999, unless extended.
- - Not subject to any condition other than the exchange offer not violate
applicable law or any applicable interpretation of the Staff of the SEC.
- - All outstanding notes that are validly tendered and not validly withdrawn will
be exchanged.
- - Tenders of outstanding notes may be withdrawn any time prior to the expiration
of the exchange offer.
- - The exchange of notes will not be a taxable exchange for U.S. federal income
tax purposes.
- - We will not receive any proceeds from the exchange offer.
- - The terms of the notes to be issued in the exchange offer are substantially
identical to the outstanding notes, except for certain transfer restrictions
and registration rights relating to the outstanding notes.
- - We believe that, subject to certain exceptions, the exchange notes may be
offered for resale, resold and otherwise transferred by you without compliance
with the registration and prospectus delivery provisions of the Securities
Act.
- - No public market exists for the outstanding notes. We intend to list the
exchange notes on the Luxembourg Stock Exchange.
- --------------------------------------------------------------------------------
FOR A DISCUSSION OF CERTAIN FACTORS THAT YOU SHOULD CONSIDER BEFORE
PARTICIPATING IN THIS EXCHANGE OFFER, SEE "RISK FACTORS" BEGINNING ON PAGE 12 OF
THIS PROSPECTUS.
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED THE NOTES
TO BE DISTRIBUTED IN THE EXCHANGE OFFER, NOR HAVE ANY OF THESE ORGANIZATIONS
DETERMINED THAT THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
AUGUST , 1999
<PAGE>
You should rely on the information contained in or incorporated by reference
in this prospectus. We have not authorized anyone to provide you with
information different from that contained in this prospectus. We are making this
exchange offer only in jurisdictions where offers and sales are permitted. The
information contained in this prospectus is accurate only as of the date of this
prospectus, regardless of the time of delivery of this prospectus. In this
prospectus, unless otherwise noted, Dura Operating Corp. is referred to as the
"Issuer." Dura Operating Corp. is a direct, wholly owned subsidiary of Dura
Automotive Systems, Inc., which is referred to in this prospectus as "DASI."
References to "we," "our," "ours," "us" and "Dura" refer to DASI and its
consolidated subsidiaries, including the Issuer.
We acquired Excel Industries, Inc. ("Excel") on March 23, 1999 and Adwest
Automotive Plc ("Adwest") on March 15, 1999. Such acquisitions are referred to
herein as the "Excel Acquisition" and the "Adwest Acquisition," respectively,
and collectively as the "Acquisitions." Unless otherwise indicated, financial
and operating data presented herein for 1998 on a pro forma basis give effect to
the Excel Acquisition, the Adwest Acquisition and each of the other acquisitions
made by Dura and Excel in 1998 as if each occurred on January 1, 1998. See
"Unaudited Pro Forma Financial Statements."
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Prospectus Summary............................. 1
Risk Factors................................... 12
Forward-Looking Statements May Prove
Inaccurate................................... 22
The Exchange Offer............................. 22
Use of Proceeds................................ 33
Capitalization................................. 34
Unaudited Pro Forma Financial Statements....... 35
Selected Consolidated Financial Data........... 41
Management's Discussion and Analysis of Results
of Operations and Financial Condition........ 47
Business....................................... 62
Management..................................... 84
<CAPTION>
PAGE
---------
<S> <C>
Security Ownership of Certain Beneficial Owners
and Management............................... 93
Certain Relationships and Related Party
Transactions................................. 95
Description of Capital Stock of DASI........... 95
Description of Other Indebtedness.............. 97
Description of Notes........................... 98
Certain United States Federal Tax
Considerations............................... 143
Plan of Distribution........................... 148
Legal Matters.................................. 149
Experts........................................ 149
Where You Can Find More Information............ 149
Index to Financial Statements.................. F-1
</TABLE>
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Until , 1999, all dealers that buy, sell or trade the exchange
notes, whether or not participating in this offering, may be required to deliver
a prospectus. This requirement is in addition to the dealers' obligation to
deliver a prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions.
------------------------
CURRENCIES AND EXCHANGE RATES
References in this prospectus to "Dollars," "$" or " CENTS" are to the
currency of the United States and references to "United States" and "U.S." means
the United States of America, its states, territories, possessions and all areas
subject to its jurisdiction. References herein to "Euro" and "[EURO]" are to the
currency that was introduced at the start of the third stage of economic and
monetary union pursuant to the treaty establishing the European Economic
Community, as amended by the Treaty on European Union, signed at Maastricht, the
Netherlands on February 7, 1992. Except as otherwise stated herein,
i
<PAGE>
conversions of non-Dollar currencies to Dollars in the financial statements and
the other information included herein have been calculated, for income statement
purposes, on the basis of average exchange rates over the related periods and,
for balance sheet purposes, on the date thereof. These translations should not
be construed as representations that the non-Dollar currency amounts actually
represent such Dollar amounts or could be converted into Dollars at the rates
indicated or at any other rates.
On May 3, 1998, the Council of the European Union adopted Council Regulation
(EC) No. 974/98, which defines the initial participants in Stage III of European
Monetary Union as Austria, Belgium, Finland, France, Germany, Ireland, Italy,
Luxembourg, the Netherlands, Portugal and Spain. Such definition of initial
participants does not include the United Kingdom, Denmark and Greece. Thus,
their currencies--the British Pound, the Danish Krone, and the Greek
Drachma--were not among those that were converted to the Euro.
The Euro was introduced on January 1, 1999 at an exchange rate of
[EURO]1.00=$1.17. As of August 4, 1999, the closing rate with respect to the
Euro was [EURO]1.00=$1.08. Unless otherwise indicated, the exchange rate used in
this prospectus is [EURO]1.00=$1.08.
References to "Pounds Sterling," "Pounds," "L," "Pence" or "p" are to the
currency of the United Kingdom (the "U.K."). There are 100 Pence to each Pound.
References in this prospectus to "DM" are to the currency of Germany.
Solely for your convenience, this prospectus contains translations of
certain financial data of Adwest from Pounds to Dollars. The following table
reflects the exchange rates used as well as other information for your benefit.
Dura does not represent that the Pound amounts shown in this prospectus would
have been converted into Dollars at the quoted exchange rates.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED SIX MONTHS ENDED
JUNE 30, DECEMBER 31,
------------------------ ------------------------
1997 1998 1997 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Operating results...................................................... 1.6094 1.6464 1.6433 1.6627
Balance sheet.......................................................... 1.6448 1.6509 1.6607 1.6710
</TABLE>
As of August 4, 1999, the closing rate with respect to the Pound was L1.00 =
$1.6163.
ii
<PAGE>
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY CONTAINS THE BASIC INFORMATION ABOUT OUR COMPANY AND
THIS EXCHANGE OFFER. IT DOES NOT CONTAIN ALL OF THE INFORMATION THAT IS
IMPORTANT TO YOU IN DECIDING WHETHER TO PARTICIPATE IN THE EXCHANGE OFFER. WE
ENCOURAGE YOU TO READ THE PROSPECTUS IN ITS ENTIRETY AND ANY DOCUMENTS WE
INCORPORATE BY REFERENCE IN THIS PROSPECTUS.
THE COMPANY
We are the world's largest independent designer and manufacturer of driver
control systems for the global automotive industry. We are also a leading global
supplier of window systems, door systems and engineered mechanical components.
Our products include:
- driver control products--automotive cables, parking brake mechanisms and
transmission shifter mechanisms;
- window system products--encapsulated windows and push out and sliding
windows;
- door system products--window regulators, door latches, frames and hinges;
and
- other products--seating systems, engine control products and engineered
mechanical components, such as underbody tire carriers, jacks, brake,
clutch and accelerator pedals, turn signal and tilt lever assemblies,
injection molded plastic parts, hood hinges, automotive lighting products
and latches.
We sell our products to every major North American, European and Japanese
automotive original equipment manufacturer ("OEM"), including Ford, General
Motors, DaimlerChrysler, Volkswagen, BMW, Toyota, Honda, PSA (Peugeot and
Citroen), Renault and Nissan. We manufacture products for many of the most
popular car, light truck and sport utility models, including all of the top ten
selling vehicles in North America and nine of the top ten selling vehicles in
Europe for 1998. We have over 80 manufacturing and product development
facilities located in the United States, Australia, Brazil, Canada, the Czech
Republic, France, Germany, India, Mexico, Portugal, Spain and the U.K. On a pro
forma basis, we had revenues of $2.5 billion for the year ended December 31,
1998.
In March 1999, we completed both the Excel Acquisition and the Adwest
Acquisition. Excel is a leading supplier of window systems, door systems,
seating systems and injection molded plastic parts for the global automotive
market and appliances, hardware products, window systems, door systems and
seating systems for the recreational vehicle, mass transit and heavy truck
("RV/MT/HT") industries in North America. On a pro forma basis giving effect to
a 1998 acquisition, Excel had net sales of $1.2 billion for the year ended
January 2, 1999. Adwest is a leading European supplier of driver control
products, including transmission shifter mechanisms, parking brake mechanisms,
steering columns and gears, cables and engine control products, such as engine
thermostats, radiator caps and fuel caps, primarily for European automotive
OEMs. Adwest had revenues of $399.7 million for the twelve month period ended
December 31, 1998.
The Acquisitions have significantly increased our product offerings, global
reach and scale. Strategic benefits of the Acquisitions include:
- Diversification of our revenue base and expansion of our product offerings
through the addition of Excel's broad array of products, including such
major product categories as window systems and door systems;
- Global leadership in driver control systems, including parking brake
systems and transmission shifter systems, resulting from the combination
of our operations with Adwest;
- Significant expansion of both our European manufacturing operations and
customer base; and
- Substantial opportunities for operational synergies driven by the
similarity of the manufacturing processes and technical capabilities of
Dura, Excel and Adwest and the sharing of best practices among all of our
businesses. Consolidation of design, engineering and administrative
functions,
1
<PAGE>
plant restructuring and realignment, coordination of raw material
purchases and other operating improvements are expected to produce annual
cost savings of approximately $35.0 million by 2001.
We believe, based upon our experience in the automotive supply industry,
that we hold the #1 or #2 market position for our principal products in the
following markets. The table below sets forth our estimated pro forma combined
market position in North America and Europe in 1998:
<TABLE>
<CAPTION>
MARKET
PRODUCT CATEGORY REGION POSITION
- ----------------------------------------- ----------------------------------------- -----------
<S> <C> <C>
Automotive cables........................ North America............................ #1
Europe................................... #1
Parking brake mechanisms................. North America............................ #1
Europe................................... #1
Transmission shifter mechanisms.......... North America............................ #1
Europe................................... #2
Window systems........................... North America............................ #1
Europe................................... #2
Window regulators........................ North America............................ #1
</TABLE>
COMPETITIVE STRENGTHS
We believe that we possess a number of competitive strengths that have been
further enhanced by the Acquisitions, including:
- - WELL POSITIONED TO TAKE ADVANTAGE OF MARKET TRENDS: We believe that we are
well positioned to meet the demands of OEMs for fewer, full-service and
globally positioned suppliers. We believe our advanced design capabilities,
broad product lines and ability to supply complete systems, combined with our
global production capabilities, will enable us to take advantage of these
market trends.
- - STRONG OEM PARTNERSHIPS: We have formed strong partnerships with our major
OEM customers due to our high level of product quality, customer service,
product design and engineering capabilities. Our application of innovative
operating techniques, combined with investments in sophisticated capital
equipment, has led to a high level of product quality, industry-low defect
rates and the receipt of numerous supplier awards.
- - WELL POSITIONED ON POPULAR PRODUCT PLATFORMS: We manufacture products for
many of the most popular car, light truck and sport utility vehicle models.
In North America, these include all of the top ten selling vehicles for 1998:
the Ford Taurus, Explorer, Ranger and F-Series pickups, the GM full-size
pickup, the Dodge Caravan and Ram pickup, the Honda Accord and Civic, and the
Toyota Camry. In Europe, these include nine of the top ten selling vehicles
for 1998: the Volkswagen Golf, Passat and Polo, the GM/Opel Astra, Corsa and
Vectra, the Renault Megane and the Ford Escort/Focus and Fiesta. The
Acquisitions increased our 1998 North American content per vehicle from
$36.55 to $97.77 on a pro forma basis.
- - SIGNIFICANT ACQUISITION EXPERIENCE: Our leadership team, the members of which
have an average of 20 years of experience in the automotive supply industry,
has successfully completed eleven acquisitions and two joint ventures over
the last three years. We have been successfully integrating the acquired
operations and generating significant operational efficiencies and cost
savings. In addition, we have generally retained key personnel from acquired
companies, which has enabled us to strengthen our global management team as
we have grown.
BUSINESS STRATEGY
Our primary business objective is to capitalize on the consolidation, system
sourcing and globalization trends in the automotive supply industry in order to
continue to be the leading provider
2
<PAGE>
of the component parts and systems that we supply to OEMs worldwide. The key
elements of our operating and growth strategies are as follows:
OPERATING STRATEGY
- CONTINUOUS OPERATIONAL IMPROVEMENTS: We continuously implement strategic
initiatives designed to improve product quality and reduce manufacturing
costs through, among other things, the introduction of cellular
manufacturing methods, consolidation of manufacturing facilities,
improvement in inventory management and the reduction of scrap.
- CAPITALIZE ON OPPORTUNITIES FOR OPERATING SYNERGIES: The Acquisitions are
expected to provide us with a number of opportunities to reduce costs and
improve operational efficiency. The similarity of the manufacturing
processes and technical capabilities of Dura, Excel and Adwest is expected
to result in significant cost savings and operating synergies.
- FOSTER A DECENTRALIZED, PARTICIPATORY CULTURE: Our decentralized approach
to managing our manufacturing facilities encourages decision making and
employee participation in areas such as manufacturing processes and
customer service. This "team" approach fosters a unified culture and
enhances communication of strategic direction and goals, while
facilitating a greater success rate in reaching and exceeding our
objectives.
GROWTH STRATEGY
- FOCUS ON SYSTEMS: OEMs are increasingly seeking suppliers capable of
providing complete systems rather than suppliers who only provide separate
component parts. A key element of our growth strategy has been to add to
our ability to provide complete systems to our OEM customers.
- INCREASE PLATFORM AND CUSTOMER PENETRATION: A key element of our strategy
is to increase volume by adding new customers and to strengthen our
existing customer relationships by broadening our range of products
through internal development efforts and acquisitions. During 1998,
through the acquisition of Trident, we increased our penetration of
certain foreign OEMs such as Volkswagen, Toyota, Honda, PSA (Peugeot and
Citroen), Renault and Nissan. The Acquisitions have further expanded our
relationships with most of the North American and European OEMs.
- EXTEND GLOBAL MANUFACTURING REACH: In 1998, over 70% of total worldwide
passenger vehicle production occurred outside North America. To meet OEMs'
increasing preference for suppliers with global capabilities, we have
expanded our manufacturing operations into new geographic markets through
strategic acquisitions and two joint ventures.
- PURSUE STRATEGIC ACQUISITIONS: We compete in what we believe to be a $12
to $14 billion, highly fragmented, worldwide automotive market that
provides numerous potential acquisition and joint venture opportunities.
Since 1996, we have successfully completed eleven strategic acquisitions
and formed two joint ventures.
THE ACQUISITIONS
THE EXCEL ACQUISITION
On March 23, 1999, we acquired Excel through a merger of Excel with and into
the Issuer. In the merger, DASI issued an aggregate of approximately 5.1 million
shares of its Class A common stock and paid $155.5 million in cash to Excel's
former shareholders. The Excel Acquisition had a transaction value of
approximately $471.3 million, plus fees and expenses. The cash consideration and
related fees and expenses paid in the Excel Acquisition (including acquired
indebtedness) were financed through borrowings under our amended and restated
$1,150 million senior secured credit facility, which we refer to in this
prospectus as our "new credit facility."
3
<PAGE>
THE ADWEST ACQUISITION
On March 15, 1999, Dura acquired through a cash tender offer approximately
95% of the outstanding ordinary shares of Adwest. The aggregate consideration
(including acquired indebtedness) and related fees and expenses paid in the
Adwest Acquisition were financed through borrowings under our new credit
facility. We intend to acquire all of the remaining ordinary shares within the
next six months. We estimate that the aggregate cost of the Adwest Acquisition,
including the amount necessary to acquire the remaining outstanding shares, will
be approximately $295 million, plus fees and expenses.
The following table summarizes our sources and uses of funds for the
Acquisitions (in millions):
<TABLE>
<CAPTION>
SOURCES OF FUNDS: AMOUNT USES OF FUNDS: AMOUNT
- ------------------------------------------- ---------- ------------------------------------------- ----------
<S> <C> <C> <C>
New credit facility........................ $ 828.1 Purchase of Excel's equity................. $ 334.6
Issuance of Class A common stock(1)........ 170.7 Purchase of Adwest's equity................ 207.2
Cash on hand............................... 49.8 Refinance Excel's existing debt............ 100.0
Refinance Adwest's existing debt........... 106.1
Refinance Dura's existing debt............. 250.7
Prepayment penalties, net.................. 9.5
Fees and expenses.......................... 40.5
---------- ----------
Total...................................... $ 1,048.6 Total...................................... $ 1,048.6
---------- ----------
---------- ----------
</TABLE>
- ------------------------------
(1) Based on a per share price of $33 9/16, which was the closing price of the
Class A common stock on January 15, 1999, the date on which the Excel
Acquisition purchase agreement was signed.
RECENT DEVELOPMENTS
On July 21, 1999, Dura announced record revenues, operating income and net
income for the second quarter ended June 30, 1999.
For the second quarter of 1999, revenues were $685.2 million, a significant
increase compared with $187.4 million in the 1998 period. Operating income rose
to $55.8 million from $18.0 million reported last year. Income before
extraordinary item, related to the early extinguishment of debt, was $18.4
million, or $1.00 per diluted share outstanding, versus $6.5 million, or 67
cents per diluted share, in the comparable 1998 period.
The quarter ended June 30, 1999 represents the first full quarter since Dura
completed its merger with Excel and its acquisition of Adwest. Both were
completed in March 1999.
For the six months ended June 30, 1999, revenues were $949.9 million,
operating income was $81.7 million and net income before extraordinary item and
accounting change was $27.7 million. These results represent significant
increases compared to the same period in 1998, which had revenues of $313.2
million, operating income of $28.8 million and net income before extraordinary
item of $11.1 million. An extraordinary loss of $2.7 million, net of income tax
benefit, was recorded in the second quarter of 1999 related to the early
extinguishment of the Trident notes. Trident is a wholly-owned subsidiary of
Dura.
COMPANY BACKGROUND
DASI is a holding company whose predecessor was formed in 1990 by Hidden
Creek Industries, Onex Corporation, J2R Corporation and certain others for the
purpose of acquiring certain operating divisions from the Wickes Manufacturing
Company.
Our principal executive offices are located at 4508 IDS Center, Minneapolis,
Minnesota 55402, and our telephone number is (612) 342-2311.
4
<PAGE>
SUMMARY OF THE EXCHANGE OFFER
<TABLE>
<S> <C>
Registration Rights Agreements.... We sold the outstanding notes on April 22, 1999 to
NationsBanc Montgomery Securities LLC, Bank of America
International Limited, Donaldson, Lufkin & Jenrette
Securities Corporation and Donaldson, Lufkin & Jenrette
International. We collectively refer to these parties in
this prospectus as the "initial purchasers." The initial
purchasers subsequently resold the outstanding notes to
(1) qualified institutional buyers pursuant to Rule 144A
under the Securities Act and (2) qualified buyers
outside the United States in reliance upon Regulation S
under the Securities Act. Simultaneously with the
initial sale of the outstanding notes, we entered into
registration rights agreements, each of which provides
for this exchange offer.
You may exchange your outstanding notes for exchange
notes with substantially identical terms. The exchange
offer is intended to satisfy your rights under the
registration rights agreements. After the exchange offer
is complete, you will no longer be entitled to any
exchange or registration rights with respect to your
outstanding notes.
The Exchange Offer................ We are offering to exchange $300,000,000 principal
amount of 9% senior subordinated notes due 2009 (the
"dollar notes") and [EURO]100,000,000 principal amount
of 9% senior subordinated notes due 2009 (the "euro
notes"), each of which have been registered under the
Securities Act for your 9% senior subordinated notes due
2009, which were issued on April 22, 1999 in a private
offering. In order to be exchanged, an outstanding note
must be properly tendered and accepted. All outstanding
notes that are validly tendered and not validly
withdrawn will be exchanged. We will issue exchange
notes promptly after the expiration of the exchange
offer.
Resales........................... We believe that the exchange notes issued in the
exchange offer may be offered for resale, resold and
otherwise transferred by you without compliance with the
registration and prospectus delivery provisions of the
Securities Act, provided that:
- the exchange notes are being acquired in the ordinary
course of your business;
- you are not participating, do not intend to
participate, and have no arrangement or understanding
with any person to participate, in the distribution of
the exchange notes issued to you in the exchange
offer; and
- you are not an "affiliate" of ours.
If any of these conditions are not satisfied and you
transfer any exchange notes issued to you in the
exchange offer without delivering a prospectus meeting
the requirements of
</TABLE>
5
<PAGE>
<TABLE>
<S> <C>
the Securities Act or without an exemption from
registration of your exchange notes from such
requirements, you may incur liability under the
Securities Act. We do not assume or indemnify you
against any such liability.
Each broker-dealer that is issued exchange notes in the
exchange offer for its own account in exchange for
outstanding notes which were acquired by such
broker-dealer as a result of market-making or other
trading activities (a "participating broker-dealer"),
must acknowledge that it will deliver a prospectus
meeting the requirements of the Securities Act in
connection with any resale of the exchange notes. A
broker-dealer may use this prospectus for an offer to
resell, resale or other retransfer of the exchange notes
issued to it in the exchange offer.
Record Date....................... We mailed this prospectus and the related exchange offer
documents to registered holders of outstanding notes on
August 6, 1999.
Expiration Date................... The exchange offer will expire at 5:00 p.m., New York
City time, September 8, 1999, unless we decide to extend
the expiration date.
Conditions to the Exchange The exchange offer is not subject to any condition other
Offer........................... than that the exchange offer not violate applicable law
or any applicable interpretation of the Staff of the
SEC.
Procedures for Tendering
Outstanding Notes............... We issued the outstanding notes as global securities.
When the outstanding notes were issued, we deposited the
global notes representing the dollar notes and the euro
notes sold to "qualified institutional buyers" pursuant
to Rule 144A with U.S. Bank Trust National Association,
as book-entry depositary, and we deposited a global note
representing the euro notes sold to purchasers under
Regulation S with The Industrial Bank of Japan
(Luxemborg) S.A. ("IBJ"), as book-entry depositary. U.S.
Bank issued a certificateless depositary interest in
each global note we deposited with it, which represents
a 100% interest in the notes, to The Depositary Trust
Company ("DTC"). IBJ issued a certificateless depositary
interest in the global note we deposited with it, which
represents a 100% interest in such note, to the
Euroclear System. Beneficial interests in the
outstanding notes, which are held by direct or indirect
participants in DTC or Euroclear, as the case may be,
through the certificateless depositary interest, are
shown on records maintained in book-entry form by DTC or
Euroclear.
You may tender your outstanding notes through the book-
entry transfer systems of DTC or Euroclear, as the case
may be. To tender your outstanding notes by a means
other than book-entry transfer, a letter of transmittal
must be completed and signed according to the
instructions contained in the letter. The letter of
transmittal and any other documents
</TABLE>
6
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<TABLE>
<S> <C>
required by the letter of transmittal must be delivered
to the exchange agent by mail, facsimile, hand delivery
or overnight carrier. In addition, you must deliver the
outstanding notes to the exchange agent or comply with
the procedures for guaranteed delivery. See "The
Exchange Offer--Procedures for Tendering Outstanding
Notes" for more information.
Do not send letters of transmittal and certificates
representing outstanding notes to us. Send these
documents only to the exchange agent. See "The Exchange
Offer--Exchange Agent" for more information.
Special Procedures for Beneficial
Owners.......................... If you are the beneficial owner of book-entry interests
and your name does not appear on a security position
listing of DTC or Euroclear as the holder of such
book-entry interests or if you are a beneficial owner of
outstanding notes that are registered in the name of a
broker, dealer, commercial bank, trust company or other
nominee and you wish to tender such book-entry interest
or outstanding notes in the exchange offer, you should
contact such person in whose name your book-entry
interests or outstanding notes are registered promptly
and instruct such person to tender on your behalf.
Withdrawal Rights................. You may withdraw the tender of your outstanding notes at
any time prior to 5:00 p.m., New York City time on
September 8, 1999.
Federal Income Tax The exchange of outstanding notes will not be a taxable
Considerations.................. event for United States federal income tax purposes.
Use of Proceeds................... We will not receive any proceeds from the issuance of
exchange notes pursuant to the exchange offer. We will
pay all of our expenses incident to the exchange offer.
Exchange Agent.................... U.S. Bank Trust National Association is serving as the
principal exchange agent in connection with the exchange
offer. IBJ is serving as the exchange agent in
Luxembourg in connection with the exchange offer.
</TABLE>
7
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SUMMARY OF TERMS OF THE EXCHANGE NOTES
THE FORM AND TERMS OF THE EXCHANGE NOTES ARE THE SAME AS THE FORM AND TERMS
OF THE OUTSTANDING NOTES, EXCEPT THAT THE EXCHANGE NOTES WILL BE REGISTERED
UNDER THE SECURITIES ACT. AS A RESULT, THE EXCHANGE NOTES WILL NOT BEAR LEGENDS
RESTRICTING THEIR TRANSFER AND WILL NOT CONTAIN THE REGISTRATION RIGHTS AND
LIQUIDATED DAMAGE PROVISIONS CONTAINED IN THE OUTSTANDING NOTES. THE EXCHANGE
NOTES REPRESENT THE SAME DEBT AS THE OUTSTANDING NOTES. BOTH THE OUTSTANDING
NOTES AND THE EXCHANGE NOTES ARE GOVERNED BY THE SAME INDENTURES. WE USE THE
TERM "NOTES" IN THIS PROSPECTUS TO COLLECTIVELY REFER TO THE OUTSTANDING NOTES
AND THE EXCHANGE NOTES.
<TABLE>
<S> <C>
Issuer.......................... Dura Operating Corp., a Delaware corporation.
Securities...................... $300.0 million in principal amount of 9% senior
subordinated notes due 2009, Series B, and [EURO]100.0
million in principal amount of 9% senior subordinated
notes due 2009, Series B.
Maturity........................ May 1, 2009
Interest........................ Annual rate: 9%.
Payment frequency--every six months on May 1 and November
1.
First payment November 1, 1999.
Ranking......................... The notes are senior subordinated debt of the Issuer.
Accordingly, they will rank:
- behind all of the senior debt of the Issuer.
- equally with all existing and future subordinated,
unsecured debt of the Issuer that does not expressly
provide that it is subordinated to the notes.
- ahead of all future debt of the Issuer that expressly
provides that it is subordinated to the notes.
- behind all of the liabilities of the Issuer's foreign
subsidiaries.
Assuming the transactions described under the caption
"Unaudited Pro Forma Financial Statements" were completed
on March 31, 1999, the notes would have been subordinated
to approximately $550 million of senior debt of the
Issuer. In addition, the notes would have been effectively
subordinated to all of the liabilities of the Issuer's
foreign subsidiaries.
Guaranties...................... The notes are unconditionally guaranteed on a senior
subordinated basis by DASI and by each material existing
domestic subsidiary of the Issuer. For ease of reference,
in this prospectus we refer to DASI's guaranty as the
"parent guaranty," the subsidiaries' guaranties as the
"subsidiary guaranties" and to the subsidiaries of the
Issuer that have guaranteed the notes as the "subsidiary
guarantors."
Optional Redemption............. On or after May 1, 2004, the Issuer may redeem some or all
of the notes at any time at the redemption prices
described in the section "Description of Notes" under the
heading "Optional Redemption."
</TABLE>
8
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<TABLE>
<S> <C>
Prior to May 1, 2002, the Issuer may redeem up to 35% of
the dollar notes and up to 35% of the euro notes with the
proceeds of certain public offerings of the common equity
of DASI at the price listed in the section "Description of
Notes" under the heading "Optional Redemption."
Mandatory Offer to Repurchase... If the Issuer sells certain assets or if the Issuer or
DASI experience specific kinds of changes in control, the
Issuer must offer to repurchase the notes at the price
listed in the section "Description of Notes."
Basic Covenants of Indentures... The indenture under which the dollar notes were issued
(the "dollar notes indenture") and the indenture under
which the euro notes were issued (the "euro notes
indenture" and, together with the dollar notes indenture,
the "indentures") each contain covenants that, among other
things, restrict the ability of the Issuer and its
restricted subsidiaries to:
-borrow money;
-pay dividends on stock or repurchase stock;
-make investments;
-use assets as security in other transactions; and
-sell certain assets or merge with or into other
companies.
See "Description of Notes--Certain Covenants."
Listing......................... We intend to apply to list the notes on the Luxembourg
Stock Exchange, but there can be no assurance that the
listing will be obtained on terms that are acceptable to
us, in our sole discretion.
</TABLE>
YOU SHOULD REFER TO THE SECTION ENTITLED "RISK FACTORS" FOR AN EXPLANATION OF
CERTAIN RISKS OF PARTICIPATING IN THE EXCHANGE OFFER.
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SUMMARY HISTORICAL AND PRO FORMA FINANCIAL DATA
We derived the following historical financial information from the audited
consolidated financial statements of Dura for 1996, 1997 and 1998 and the
unaudited consolidated financial statements of Dura for the three month periods
ended March 31, 1998 and 1999. No separate financial information for the Issuer
has been provided in this prospectus because: (1) DASI does not itself conduct
any operations but rather all operations of Dura are conducted by the Issuer and
its direct and indirect subsidiaries; (2) DASI has no material assets other than
the capital stock of the Issuer; (3) all of the assets and liabilities shown in
the consolidated financial statements for DASI are located at the Issuer and its
direct and indirect subsidiaries; and (4) DASI has unconditionally guaranteed
the notes on an unsecured, senior subordinated basis. The summary pro forma
financial data of Dura for the year ended December 31, 1998 and the three months
ended March 31, 1999 have been derived from the pro forma financial statements
and related notes contained elsewhere in this prospectus. The pro forma
financial statements do not purport to represent what our results of operations
actually would have been if the events assumed therein had occurred as of the
dates indicated or what our results will be for any future period.
You should read the following summary together with the "Management's
Discussion and Analysis of Results of Operations and Financial Condition" for
each of Dura, Excel and Adwest and the audited and unaudited financial
statements and the related notes and the unaudited pro forma financial
statements and related notes contained elsewhere in this prospectus.
DURA AUTOMOTIVE SYSTEMS, INC.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31,
-------------------------------------------- -----------------------------------
PRO FORMA PRO FORMA
1996(1) 1997(2) 1998(3) 1998(4)(5) 1998 1999 1999(4)
--------- --------- --------- ----------- --------- ----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues..................... $ 245,329 $ 449,111 $ 739,467 $ 2,525,448 $ 125,746 $ 264,701 $ 653,752
Gross profit................. 37,519 74,025 130,949 354,976 21,275 46,482 97,783
Operating income............. 19,326 37,610 71,256 163,575 10,864 25,900 49,783
Net income................... 10,128 16,642 26,667 35,866 4,576 3,492 8,139
OTHER FINANCIAL DATA:
Depreciation and
amortization............... $ 6,079 $ 12,303 $ 27,571 $ 85,845 $ 3,067 $ 10,507 $ 19,117
Capital expenditures, net.... 6,260 16,242 31,822 106,120 3,733 5,994 21,994
EBITDA(6).................... 25,405 49,913 98,827 249,420 13,931 36,407 68,900
Net cash provided by (used
in):
Operating activities....... 19,792 8,516 7,687 (2,142) 387
Investing activities....... (95,093) (93,386) (167,534) (22,311) (543,900)
Financing activities....... 75,236 87,620 176,620 67,322 564,152
Ratio of earnings to fixed
charges (7)................ 5.7x 3.7x 2.7x 1.7x 3.3x 3.1x 2.0x
BALANCE SHEET DATA (AT END OF
PERIOD):
Cash and cash equivalents.... $ 1,667 $ 4,148 $ 20,544 $ 57,159 $ 46,938 $ 39,267 $ 55,247
Working capital.............. 27,528 50,304 63,766 195,437 103,066 265,890 281,870
Total assets................. 246,129 419,264 929,383 2,170,227 500,606 2,260,567 2,287,547
Total debt................... 77,456 180,322 331,906 1,025,035 194,438 1,072,091 1,099,071
Total stockholders'
investment................. 87,367 101,708 238,037 405,823 105,769 393,462 393,462
</TABLE>
- --------------------------
(1) Includes the results of operations of (i) the parking brake business from
Rockwell International Corporation ("Rockwell") from October 1, 1996 and
(ii) KPI Automotive Group ("KPI") from December 5, 1996, their
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respective dates of acquisition. DASI issued an aggregate of 3,795,000
shares of its Class A common stock in August 1996 in connection with its
initial public offering.
(2) Includes the results of operations of (i) VOFA Group ("VOFA") from January
1, 1997, (ii) the parking brake business of Excel from May 5, 1997, (iii) GT
Automotive Systems, Inc. ("GT Automotive") from August 29, 1997, and (iv)
REOM Industries (Aust) Pty Ltd. ("REOM Industries") from December 12, 1997,
which represent their respective dates of acquisition.
(3) Includes the results of operations of (i) Universal Tool & Stamping Co.,
Inc. ("Universal") from March 8, 1998, (ii) Trident Automotive plc
("Trident") from April 30, 1998, and (iii) the hinge business of Tower
Automotive, Inc. (the "Hinge Business") from September 8, 1998, which
represent their respective dates of acquisition. In March 1998, Dura
Automotive Systems Capital Trust (the "Dura Trust") issued 7 1/2%
Convertible Trust Preferred Securities (the "Trust Preferred Securities")
with an aggregate liquidation preference of $55.3 million. In June 1998,
DASI issued 3,500,000 shares of its Class A common stock, giving effect to
the exercise of the underwriters' over-allotment option (the "June 1998
Offering").
(4) The pro forma statement of operations data for the year ended December 31,
1998 give effect to: (i) the acquisitions of Universal, Trident, the Hinge
Business, Excel and Adwest by Dura, (ii) Excel's acquisition, effective July
1, 1998, of 70% of Schade, (iii) the March 1998 offering of the Trust
Preferred Securities, (iv) the June 1998 Offering, (v) the completion of the
initial offering of the outstanding notes, and (vi) the retirement of the
Trident notes and the application of the net proceeds therefrom, as if each
had been consummated on January 1, 1998. The pro forma statement of
operations data for the three months ended March 31, 1999 give effect to:
(i) the acquisitions of Excel and Adwest, (ii) the initial offering, and
(iii) the retirement of the Trident notes and the application of the net
proceeds therefrom, as if each had been consummated on January 1, 1998. The
related pro forma balance sheet data as of March 31, 1999 give effect to the
completion of the initial offering and the application of the net proceeds
therefrom, as if that transaction had been consummated on March 31, 1999.
(5) Amounts for Adwest have been translated from Pounds into Dollars using the
exchange rates set forth herein for convenience purposes only. In addition,
certain amounts of Adwest have been adjusted to conform to U.S. GAAP. See
Note 31 to the Consolidated Financial Statements of Adwest, Note 5 to the
Unaudited Interim Consolidated Financial Statements of Adwest and
"Currencies and Exchange Rates" included elsewhere herein.
(6) "EBITDA" is operating income plus depreciation and amortization. EBITDA does
not represent and should not be considered as an alternative to net income
or cash flow from operations as determined by generally accepted accounting
principles, and our calculation thereof may not be comparable to that
reported by other companies. We believe that it is widely accepted that
EBITDA provides useful information regarding a company's ability to service
and/or incur indebtedness. This belief is based, in part, on our
negotiations with our lenders who have required that the interest payable
under the our new credit facility be based, in part, on our ratio of
consolidated senior funded indebtedness to EBITDA. EBITDA does not take into
account our working capital requirements, debt service requirements and
other commitments and, accordingly, is not necessarily indicative of amounts
that may be available for discretionary use.
(7) In calculating the ratio of earnings to fixed charges, earnings consist of
income before income taxes plus fixed charges. Fixed charges consist of
interest expense (which includes amortization of deferred financing costs
and debt issuance costs) and one-third of rental expense, deemed
representative of that portion of rental expense estimated to be
attributable to interest.
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RISK FACTORS
YOU SHOULD READ AND CONSIDER CAREFULLY EACH OF THE FOLLOWING FACTORS, AS
WELL AS THE OTHER INFORMATION CONTAINED IN OR INCORPORATED BY REFERENCE INTO
THIS PROSPECTUS, BEFORE MAKING A DECISION TO PARTICIPATE IN THE EXCHANGE OFFER.
RISKS RELATED TO THE NOTES
OUR BUSINESS MAY BE ADVERSELY IMPACTED AS A RESULT OF OUR SUBSTANTIAL LEVERAGE
We have a significant amount of indebtedness. As of March 31, 1999, on a pro
forma basis giving effect to the initial offering, we would have had
approximately $1,180 million of outstanding debt, $55.3 million of outstanding
Trust Preferred Securities and approximately $393.5 million of stockholders'
investment, and our pro forma ratio of earnings to fixed charges for the
quarterly period ended March 31, 1999 would have been 1.9 to 1. In addition,
both the Issuer and DASI are able to incur substantial additional indebtedness
in the future. The terms of the indentures do not fully prohibit them from doing
so. Our new credit facility provides for revolving credit borrowings of up to
$400 million, subject to certain financial covenants set forth therein.
Our indebtedness could have several important consequences to you, including
but not limited to the following:
- it may be difficult for the Issuer to satisfy its obligations with respect
to the notes;
- our ability to obtain additional financing in the future for working
capital, capital expenditures, potential acquisition opportunities,
general corporate purposes or other purposes may be impaired;
- a substantial portion of our cash flow from operations must be dedicated
to the payment of principal and interest on our indebtedness;
- we may be more vulnerable to economic downturns, may be limited in our
ability to withstand competitive pressures and may have reduced
flexibility in responding to changing business, regulatory and economic
conditions; and
- fluctuations in market interest rates will affect the cost of our
borrowings to the extent not covered by interest rate hedge agreements
because a portion of our indebtedness is payable at variable rates.
Our ability to service our indebtedness will depend on our future
performance, which will be affected by prevailing economic conditions and
financial, business, regulatory and other factors. Certain of these factors are
beyond our control. We believe that, based upon current levels of operations, we
will be able to meet our debt service obligations when due. Significant
assumptions underlie this belief, including, among other things, that we will
continue to be successful in implementing our business strategy and that there
will be no material adverse developments in our business, liquidity or capital
requirements. If we cannot generate sufficient cash flow from operations to
service our indebtedness and to meet our other obligations and commitments, we
might be required to refinance our debt or to dispose of assets to obtain funds
for such purpose. There is no assurance that refinancings or asset dispositions
could be effected on a timely basis or on satisfactory terms, if at all, or
would be permitted by the terms of the indentures or the new credit facility. In
the event that we are unable to refinance the new credit facility or raise funds
through asset sales, sales of equity or otherwise, the Issuer's ability to pay
principal of, and interest on, the notes would be impaired.
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WE ARE SUBJECT TO SUBSTANTIAL RESTRICTIONS AND COVENANTS UNDER THE INDENTURES
AND NEW CREDIT FACILITY
The indentures and the new credit facility contain numerous restrictive
covenants, including, but not limited to, covenants that restrict the Issuer's
ability to incur indebtedness, pay dividends, create liens, sell assets and
engage in certain mergers and acquisitions. In addition, the new credit facility
also requires Dura to maintain certain financial ratios. Our ability to comply
with the covenants and other terms of the new credit facility and the indentures
and to satisfy our other respective debt obligations (including, without
limitation, borrowings and other obligations under the new credit facility) and
the Issuer's ability to make cash payments with respect to the notes will depend
on our future operating performance. In the event that we fail to comply with
the various covenants contained in the new credit facility or the indentures, as
applicable, we would be in default thereunder, and in any such case, the
maturity of substantially all of our long-term indebtedness could be
accelerated.
A default under the indentures would also constitute an event of default
under the new credit facility. In addition, the lenders under the new credit
facility could elect to declare all amounts borrowed thereunder, together with
accrued interest, to be due and payable. If we were unable to repay such
borrowings, such lenders could proceed against the assets of the Issuer, which
secure its borrowings under the new credit facility. If the indebtedness under
the new credit facility were to be accelerated, there can be no assurance that
the assets of the Issuer would be sufficient to repay such indebtedness and the
notes in full. The new credit facility prohibits the repayment, purchase,
redemption, defeasance or other payment of any of the principal of the notes at
any time prior to their stated maturity other than as described herein. See
"Description of Other Indebtedness--New Credit Facility" and "Description of
Notes."
THE NOTES AND GUARANTIES ARE UNSECURED SENIOR SUBORDINATED OBLIGATIONS
The indebtedness evidenced by the notes is an unsecured obligation of the
Issuer and the indebtedness evidenced by the parent guaranty and the subsidiary
guaranties are unsecured obligations of DASI and the subsidiary guarantors, as
the case may be. The payment of principal of, premium (if any), and interest on
the notes is subordinated in right of payment to all senior indebtedness of the
Issuer, including the payment of the new credit facility, and the payment of the
parent guaranty and the subsidiary guaranties are subordinated in right of
payment to all senior indebtedness of DASI and the subsidiary guarantors, as the
case may be, including DASI's and the subsidiary guarantors' respective
guarantees of the new credit facility. As of March 31, 1999, on a pro forma
basis and giving effect to the initial offering, senior indebtedness of the
Issuer would have been approximately $550.0 million and, as a result of their
respective guaranties of the new credit facility, senior indebtedness of DASI
and the subsidiary guarantors would have been approximately $550.0 million.
By reason of the subordination provisions of the indentures, in the event of
insolvency, liquidation, reorganization, dissolution or other winding-up of the
Issuer, DASI or any of the subsidiary guarantors, holders of senior indebtedness
of the Issuer, DASI or any of the subsidiary guarantors, as the case may be,
will have to be paid in full before the Issuer makes payments in respect of the
notes, before DASI makes payments in respect of the parent guaranty or any of
the subsidiary guarantors makes payment in respect of the subsidiary guaranties.
In addition, no payment will be able to be made in respect of the notes during
the continuance of a payment default under any "designated senior indebtedness"
(as defined in the indentures). As a result, if certain non-payment defaults
exist with respect to designated senior indebtedness, the holders of such
designated senior indebtedness will be able to prevent payments on the notes for
certain periods of time. See "Description of Notes--Subordination."
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DASI'S SOLE SOURCE OF OPERATING INCOME IS DERIVED FROM THE ISSUER; YOU SHOULD
NOT RELY ON THE
PARENT GUARANTY IN EVALUATING AN INVESTMENT IN THE NOTES
DASI has unconditionally guaranteed the notes on an unsecured, senior
subordinated basis. DASI is a holding company whose sole source of operating
income and cash flow is derived from the Issuer and whose only material asset is
the Issuer's capital stock. Accordingly, DASI is dependent upon the earnings and
cash flow of, and dividends and distributions from, the Issuer to perform on the
parent guaranty. As a result, the parent guaranty provides little, if any,
additional credit support for the notes and investors should not rely on the
parent guaranty in evaluating whether to participate in the exchange offer.
THE ISSUER CONDUCTS CERTAIN OF ITS OPERATIONS THROUGH SUBSIDIARIES AND NOT ALL
OF THE ISSUER'S SUBSIDIARIES ARE SUBSIDIARY GUARANTORS
The Issuer conducts certain of its domestic and substantially all of its
international operations through subsidiaries. Distributions and intercompany
transfers from the Issuer's subsidiaries to the Issuer may be restricted by
covenants contained in debt agreements and other agreements to which such
subsidiaries may be subject and may be restricted by other agreements entered
into in the future and by applicable law. There can be no assurance that the
operating results of the Issuer's subsidiaries at any given time will be
sufficient to make distributions to the Issuer. In addition, the Issuer does not
own all of the equity interests of certain of its foreign subsidiaries, and
consequently must share profits with certain minority shareholders.
The subsidiary guarantors will include only the Issuer's material domestic
subsidiaries. However, our historical consolidated financial information and the
pro forma consolidated financial information included in this prospectus are
presented on a consolidated basis, including both our domestic and foreign
subsidiaries. On a pro forma basis, the aggregate revenues and EBITDA of our
subsidiaries that are not subsidiary guarantors for the year ended December 31,
1998 would have been approximately $1,100 million and approximately $123
million, respectively, and their consolidated tangible assets at December 31,
1998 would have been approximately $576 million. In addition, the notes will be
effectively subordinated to all existing and future liabilities (including trade
payables) of our foreign subsidiaries. As a result, any right of the Issuer to
participate in any distribution of assets of its foreign subsidiaries upon the
liquidation, reorganization or insolvency of any such subsidiary (and the
consequential right of the holders of the notes to participate in the
distribution of those assets) will be subject to the prior claims of such
subsidiary's creditors.
THERE IS NO ASSURANCE THAT THE ISSUER WILL BE ABLE TO PURCHASE THE NOTES UPON A
CHANGE OF CONTROL
If either the Issuer or DASI undergoes a "change of control" (as defined in
the indentures), we may need to refinance large amounts of our debt, including
the debt under the notes and under the new credit facility. If a change of
control occurs, we must offer to buy back the notes for a price equal to 101% of
the notes' principal amount, plus any interest which has accrued and remains
unpaid as of the repurchase date. We would fund any repurchase obligation with
our available cash, cash generated from other sources such as borrowings, sales
of equity, or funds provided by a new controlling person. However, we cannot
assure you that there will be sufficient funds available for any required
repurchases of the notes if a change of control occurs. In addition, the new
credit facility prohibits us from repurchasing the notes after a change of
control until we first repay our debt to the new credit facility in full. If we
fail to repurchase the notes in that circumstance, we will go into default under
both the notes and the new credit facility. Any future debt which we incur may
also contain restrictions on repayment which come into effect upon a change of
control. If a change of control occurs, we cannot assure you that we will have
sufficient funds to satisfy all of our debt obligations. These buyback
requirements may also delay or make it harder for others to obtain control of
Dura. In addition, certain important corporate events, such as leveraged
recapitalizations, that would increase the level of
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our indebtedness, would not constitute a change of control under the indentures.
See "Description of Notes--Repurchase at the Option of Holders--Change of
Control."
IF A COURT WERE TO FIND THAT THE ISSUANCE OF THE NOTES OR THE SUBSIDIARY
GUARANTIES CONSTITUTED A FRAUDULENT CONVEYANCE, SUCH COURT COULD AVOID THE
ISSUER'S OBLIGATIONS UNDER THE NOTES OR THE SUBSIDIARY GUARANTORS' OBLIGATIONS
UNDER THE SUBSIDIARY GUARANTIES
A significant portion of the net proceeds of the initial offering were used
to repay indebtedness incurred in connection with the Acquisitions. If a
bankruptcy case or lawsuit is initiated by our unpaid creditors, the debt which
we incurred to finance the Acquisitions and the debt represented by the notes
may be reviewed under federal bankruptcy law and comparable provisions of state
fraudulent transfer laws. Under these laws, the debt could be voided, or claims
in respect of the debt could be subordinated to all other debts of the Issuer or
the subsidiary guarantors if, among other things, the Issuer or the subsidiary
guarantors, at the time they incurred the indebtedness:
- received less than reasonably equivalent value or fair consideration for
the incurrence of such debt; and
- was insolvent or rendered insolvent by reason of such incurrence; or
- was engaged in a business or transaction for which its remaining assets
constituted unreasonably small capital; or
- intended to incur, or believed that they would incur, debts beyond their
ability to pay such debts as they mature.
In addition, any payment by the Issuer or subsidiary guarantor could be voided
and required to be returned to the Issuer or the subsidiary guarantor, as the
case may be, or to a fund for the benefit of the creditors of the Issuer or the
subsidiary guarantor.
The measures of insolvency for purposes of these fraudulent transfer laws
will vary depending upon the law applied in any proceeding to determine whether
a fraudulent transfer has occurred. Generally, however, a debtor would be
considered insolvent if:
- the sum of its debts, including allowance for contingent liabilities, were
greater than the fair saleable value of all of its assets; or
- if the present fair saleable value of its assets were less than the amount
that would be required to pay the probable liability on its existing
debts, including allowance for contingent liabilities, as they become
absolute and mature; or
- it could not pay its debts as they became due.
We believe that we received fair market value for the indebtedness incurred
in connection with the Acquisitions and in exchange for issuance of the notes.
On the basis of historical financial information, recent operating history and
other factors, we believe that, after giving effect to the Acquisitions and the
initial offering, we were not insolvent, did not have unreasonably small capital
for the business in which we are engaged and have not have incurred debts beyond
our ability to pay such debts as they mature. There can be no assurance,
however, as to what standard a court would apply in making such determinations
or that a court would agree with our conclusions in this regard.
RISKS RELATING TO DURA AND THE AUTOMOTIVE SUPPLY INDUSTRY
WE ARE DEPENDENT ON FORD, GM AND DAIMLERCHRYSLER AS OUR LARGEST CUSTOMERS
Our revenues from Ford, GM and DaimlerChrysler represented approximately
32%, 12% and 10%, respectively, of our revenues in 1998 on a pro forma basis and
approximately 36%, 23% and 15%, respectively, of our actual revenues in 1998.
The loss of Ford, GM, DaimlerChrysler or any other
15
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significant customer could have a material adverse effect on us. The contracts
we have entered into with many of our customers provide for supplying the
customers' requirements for a particular model, rather than for manufacturing a
specific quantity of products. Such contracts range from one year to the life of
the model, usually three to seven years, and do not require the purchase by the
customer of any minimum number of parts. Therefore, the loss of any one of such
customers or a significant decrease in demand for certain key models or group of
related models sold by any of our major customers could have a material adverse
effect on us. We are involved in claims relating to our products with certain of
our significant customers. As a result of these claims, it is possible that our
relationship with these customers could be adversely affected. See
"Business--Legal Proceedings."
WE MAY EXPERIENCE DIFFICULTIES IN INTEGRATING EXCEL AND ADWEST
We believe that the Acquisitions will provide us with significant
opportunities to achieve operating synergies and cost savings. There can be no
assurance, however, that such benefits will be realized, that the combination of
Dura, Excel and Adwest will be successful, or that we will not experience
difficulties in integrating the operations of Excel and Adwest with our
operations. For example, the integration of Excel and Adwest will require the
experience and expertise of certain former key managers of Excel and Adwest,
respectively, who have been retained by Dura. There can be no assurance,
however, that these managers will remain with Dura for the time period necessary
to successfully integrate Excel's and Adwest's operations with our operations.
In addition, the Acquisitions may present significant challenges for our
management due to the increased time and resources required to properly
integrate management, employees, information systems, accounting controls,
personnel and administrative functions of Excel and Adwest with those of Dura
and to manage the combined company on a going forward basis. We cannot assure
you that we will be able to successfully integrate and streamline overlapping
functions or, if successfully accomplished, that such integration will not be
more costly to accomplish than presently contemplated or that we will not
encounter difficulties in managing the combined company due to its increased
size and scope.
In addition, we cannot assure you that we will achieve the operating
synergies and annual cost savings that we expect to result from the
Acquisitions, which we discuss under "Prospectus Summary," and "Unaudited Pro
Forma Financial Statements," and elsewhere in this prospectus. These estimates
constitute forward-looking information and involve known and unknown risks,
uncertainties and other factors that may cause the actual cost savings or cash
generated to be materially different from our estimates or result in these
savings not being realized in the time frame expected. In addition to the
general factors discussed above, such estimates are based on a variety of other
factors and were derived utilizing numerous important assumptions, including:
- achieving estimated reductions in personnel at currently projected
severance cost levels, while maintaining historical sales levels;
- achieving a sufficient level of sales necessary to yield planned
production efficiencies and absorption of fixed costs;
- eliminating certain components of fixed overhead without affecting our
ability to manage our restructured operations;
- not disrupting planned production schedules; and
- achieving operating improvements at certain of Excel's and Adwest's
facilities.
WE MAY BE UNABLE TO COMPLETE ADDITIONAL STRATEGIC ACQUISITIONS
The automotive component supply industry has undergone, and is likely to
continue to experience, consolidation as OEMs seek to reduce costs and reduce
their supplier base. We intend to actively pursue acquisition targets that will
allow us to continue to expand into new geographic markets, add
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new customers, provide new product, manufacturing and service capabilities or
increase model penetration with existing customers. There can be no assurance
that we will find attractive acquisition candidates or successfully integrate
acquired businesses into our existing business. If the expected synergies from
such acquisitions do not materialize or we fail to successfully integrate new
businesses into our existing businesses, our results of operations could be
adversely affected. To the extent that we may be considered as an acquisition
candidate by a third party, certain provisions in our restated certificate of
incorporation and our amended and restated by-laws may inhibit a change in
control.
WE ARE SUBJECT TO CERTAIN RISKS ASSOCIATED WITH OUR FOREIGN OPERATIONS
We have significant international operations, specifically in Europe, Canada
and Latin America and the Acquisitions have further increased our international
operations. Excel has significant operations in Europe and substantially all of
Adwest's operations are located in Europe. Certain risks are inherent in
international operations, including:
- the difficulty of enforcing agreements and collecting receivables through
certain foreign legal systems;
- foreign customers may have longer payment cycles than customers in the
United States;
- tax rates in certain foreign countries may exceed those in the United
States and foreign earnings may be subject to withholding requirements or
the imposition of tariffs, exchange controls or other restrictions;
- general economic and political conditions in countries where Dura, Excel
and Adwest operate may have an adverse effect on their operations in those
countries;
- the difficulties associated with managing a large organization spread
throughout various countries; and
- required compliance with a variety of foreign laws and regulations.
As we continue to expand our business globally, our success will be
dependent, in part, on our ability to anticipate and effectively manage these
and other risks. We cannot assure you that these and other factors will not have
a material adverse effect on our international operations or our business as a
whole. In addition, we generate a significant portion of our revenues and incur
a significant portion of our expenses in currencies other than Dollars. To the
extent that we are unable to match revenues received in foreign currencies with
costs paid in the same currency, exchange rate fluctuations in any such currency
could have an adverse effect on our financial results.
WE MAY BE ADVERSELY IMPACTED BY WORK STOPPAGES AND OTHER LABOR MATTERS
Approximately 8,300 of our employees are unionized, which represents
approximately 39% of our employees at March 31, 1999. We cannot assure you that
we will not encounter strikes, further unionization efforts or other types of
conflicts with labor unions or our employees. Any of these factors may have an
adverse effect on us or may limit our flexibility in dealing with our workforce.
In addition, many OEMs and their suppliers have unionized work forces. Work
stoppages or slow-downs experienced by OEMs or their suppliers could result in
slow-downs or closures of assembly plants where our products are included in
assembled vehicles. For example, strikes by the United Auto Workers led to the
shut down of most of GM's North American assembly plants in June and July 1998.
We estimate that this work stoppage at GM's facilities had an unfavorable impact
of approximately $16.7 million on our 1998 revenues. In the event that one or
more of our customers experiences a material work stoppage, such work stoppage
could have a material adverse effect on our business.
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WE MAY BE ADVERSELY AFFECTED BY ENVIRONMENTAL AND SAFETY REGULATIONS TO WHICH WE
ARE SUBJECT
We are subject to the requirements of federal, state, local and foreign
environmental and occupational health and safety laws and regulations. We cannot
assure you that we operate at all times in complete compliance with all such
requirements. We could be subject to potentially significant fines and penalties
for any noncompliance that may occur. We have made and will continue to make
capital and other expenditures to comply with environmental requirements. We are
also subject to laws requiring the cleanup of contamination. Some of our
operations generate hazardous substances. If a release of hazardous substances
occurs at or from any of our current or former properties or at a landfill or
another location where we have disposed of wastes, we may be held liable for the
contamination, and the amount of such liability could be material. We are
currently addressing environmental contamination matters at certain facilities,
including facilities in Mancelona, Michigan, Butler, Indiana, and Rotenberg,
Einbeck and Dusseldorf, Germany, which could result in material expenditures.
See "Business--Environmental Matters."
CERTAIN STOCKHOLDERS CURRENTLY CONTROL ALL MATTERS SUBMITTED TO A STOCKHOLDER
VOTE
Onex Corporation, Alkin Co. and certain other stockholders associated with
Dura or Hidden Creek Industries beneficially own all of our outstanding shares
of Class B common stock, representing approximately 70% of the combined voting
power of our outstanding common stock as of June 30, 1999. Each share of Class B
common stock has ten votes, as compared to one vote for each share of Class A
common stock. As a result of such stock ownership, these stockholders are able
to control the vote on all matters submitted to a vote of the holders of our
common stock, including the election of directors, amendments to our restated
certificate of incorporation and by-laws and approval of significant corporate
mergers. Such consolidation of voting power could also have the effect of
delaying, deterring or preventing a change in control of Dura that might be
otherwise beneficial to Dura. See "Description of Capital Stock of DASI."
CYCLICALITY AND SEASONALITY COULD ADVERSELY AFFECT US
The automotive and recreational vehicle markets are highly cyclical and both
markets are dependent on consumer spending. Economic factors adversely affecting
automotive production and consumer spending could adversely impact us. In
addition, our business is somewhat seasonal. We typically experience decreased
revenues and operating income during the third calendar quarter of each year due
to the impact of scheduled OEM plant shutdowns in July and August for vacations
and new model changeovers.
WE MAY BE ADVERSELY AFFECTED BY PRODUCT LIABILITY EXPOSURE CLAIMS
We face an inherent business risk of exposure to product liability claims in
the event that the failure of our products results in personal injury or death,
and there can be no assurance that we will not experience any material product
liability losses in the future. In addition, if any of our products prove to be
defective, we may be required to participate in a recall involving such
products. In late 1994, Ford issued a recall of a series of manual-transmission
Ford F-Series pickups to repair the self-adjust parking brakes originally
manufactured by the brake and cable business of Alkin Co. (the "Brake and Cable
Business"). Our share of such costs, which was fully reserved at the time of the
acquisition of the Brake and Cable Business has reached the full $6.0 million
limit agreed to between us and Ford. We are also involved in a product recall
relating to the same issue with respect to the Mondeo in Europe. We have agreed
to pay 50% of the costs of that recall not to exceed $1.0 million, which
payments totaled $0.4 million at December 31, 1998. The types of alleged
failures that prompted the F-Series recall have also led to a number of claims
and lawsuits filed against Ford, one of which culminated in a July 1998 award of
punitive damages against Ford of more than $151 million (which has subsequently
been reduced to $69 million) and Ford is appealing the decision. To date, two
cases
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have been instituted directly against Dura or Alkin Co. relating to personal
injury claims, and, at last report, Ford has indicated that it has received over
400 claims (generally for property damage) relating to alleged defects in the
self-adjust parking brakes. Ford has maintained that Dura or Alkin Co. is
responsible for all damages or liabilities incurred by Ford as a result of these
claims, and as of December 31, 1998, Ford had tendered its defense of
approximately 30 such claims to Dura and Alkin Co. Dura and Alkin Co. have
submitted these claims to their insurance carriers. We maintain insurance
against product liability claims, but there can be no assurance that such
coverage will be adequate for liabilities ultimately incurred or that it will
continue to be available on terms acceptable to us. In November 1996, one of our
insurance carriers brought a declaratory judgment that its policy did not
provide coverage for an allegedly defective parking brake manufactured prior to
August 31, 1994.
A successful claim brought against us in excess of available insurance
coverage or a requirement to participate in any product recall may have a
material adverse effect on our results of operations or financial condition. See
"Business--Legal Proceedings."
WE OPERATE IN THE HIGHLY COMPETITIVE AUTOMOTIVE SUPPLY INDUSTRY
The automotive component supply industry is highly competitive. Some of our
competitors are companies, or divisions or subsidiaries of companies, that are
larger and have greater financial and other resources than we do. In addition,
with respect to certain of our products, some of our competitors are divisions
of our OEM customers. There can be no assurance that our products will be able
to compete successfully with the products of these other companies.
We principally compete for new business both at the beginning of the
development of new models and upon the redesign of existing models by our major
customers. New model development generally begins two to five years prior to the
marketing of such models to the public. The failure to obtain new business on
new models or to retain or increase business on redesigned existing models could
adversely affect our business.
In addition, there is substantial and continuing pressure from the major
OEMs to reduce costs, including the cost of products purchased from outside
suppliers such as Dura. If we are unable to generate sufficient production cost
savings in the future to offset price reductions, our gross margin could be
adversely affected.
TECHNOLOGICAL AND REGULATORY CHANGES MAY ADVERSELY AFFECT US
Changes in legislative, regulatory or industry requirements or competitive
technologies may render certain of our products obsolete. Our ability to
anticipate changes in technology and regulatory standards and to develop and
introduce new and enhanced products successfully on a timely basis will be a
significant factor in our ability to grow and to remain competitive. There can
be no assurance that we will be able to achieve the technological advances that
may be necessary for us to remain competitive or that certain of our products
will not become obsolete. We are also subject to the risks generally associated
with new product introductions and applications, including lack of market
acceptance, delays in product development and failure of products to operate
properly.
WE MAY BE ADVERSELY IMPACTED BY THE YEAR 2000 ISSUE
We are currently working to resolve the potential impact of the year 2000 on
the processing of time-sensitive information by our computerized information
systems. Any of our programs that have time-sensitive software may recognize
"00" as the year 1900 rather than the year 2000. This could result in
miscalculations, classification errors or system failures.
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While our various operations are at different stages of Year 2000 readiness,
we have nearly completed our global compliance review. Based on the information
available to date, we do not anticipate any significant readiness problems with
respect to our systems.
The most reasonably likely worst case scenario that we currently anticipate
with respect to Year 2000 is the failure of some of our suppliers, including
utilities suppliers, to be ready. This could cause a temporary interruption of
materials or services that we need to make our products, which could result in
delayed shipments to customers and lost sales and profits for us. We have
completed an assessment of our critical suppliers and have developed contingency
plans to address the risks which were identified. These plans include resourcing
materials or building inventory banks.
The outcome of our Year 2000 program is subject to a number of risks and
uncertainties, some of which (such as the availability of qualified computer
personnel and the Year 2000 responses of third parties) are beyond our control.
Therefore, there can be no assurances that we will not incur material
remediation costs beyond the above anticipated future costs, or that our
business, financial condition, or results of operations will not be
significantly impacted if Year 2000 problems with our systems, or with the
products or systems of other parties with whom we do business, are not resolved
in a timely manner.
RISKS ASSOCIATED WITH THE EXCHANGE OFFER
LACK OF PUBLIC MARKET FOR THE NOTES--YOU MAY NOT BE ABLE TO SELL YOUR NOTES
The outstanding notes were not registered under the Securities Act or under
the securities laws of any state and may not be resold unless they are
subsequently registered or an exemption from the registration requirements of
the Securities Act and applicable state securities laws is available. The
exchange notes will be registered under the Securities Act, but will constitute
a new issue of securities with no established trading market, and there can be
no assurance as to:
- the liquidity of any such market that may develop;
- the ability of holders to sell their exchange notes; or
- the price at which the holders would be able to sell their exchange notes.
If such a market were to exist, the exchange notes may trade at higher or lower
prices than their principal amount or purchase price, depending on many factors,
including prevailing interest rates, the market for similar debentures and the
financial performance of Dura.
We understand that the initial purchasers presently intend to make a market
in the notes. However, they are not obligated to do so, and any market-making
activity with respect to the notes may be discontinued at any time without
notice. In addition, such market-making activity will be subject to the limits
imposed by the Securities Act and the Exchange Act, and may be limited during
the exchange offer or the pendency of an applicable shelf registration
statement. There can be no assurance that an active trading market will exist
for the notes or that such trading market will be liquid.
CONSEQUENCES OF A FAILURE TO EXCHANGE THE OUTSTANDING NOTES
Outstanding notes that are not tendered or are tendered but not accepted
will, following the consummation of the exchange offer, continue to be subject
to the existing restrictions upon transfer thereof, and, upon consummation of
the exchange offer, certain registration rights with respect to the outstanding
notes will terminate. In addition, any outstanding note holder who tenders in
the exchange offer for the purpose of participating in a distribution of the
exchange 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. To
the extent that
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outstanding notes are tendered and accepted in the exchange offer, the trading
market for untendered and tendered but unaccepted outstanding notes could be
adversely affected.
NO OBLIGATION TO NOTIFY--WE ARE NOT OBLIGATED TO NOTIFY YOU OF UNTIMELY OR
DEFECTIVE TENDERS OF OUTSTANDING NOTES
We will issue exchange notes pursuant to this exchange offer only after a
timely receipt of your outstanding notes, a properly completed and duly executed
letter of transmittal and all other required documents. Therefore, if you want
to tender your outstanding notes, please allow sufficient time to ensure timely
delivery. We are under no duty to give notification of defects or irregularities
with respect to the tenders of outstanding notes for exchange.
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FORWARD-LOOKING STATEMENTS MAY PROVE INACCURATE
This prospectus (including information we have incorporated into this
prospectus by reference) contains forward-looking statements that are subject to
risks and uncertainties. You should not place undue reliance on those statements
because they only speak as of the date of this prospectus. Forward-looking
statements include information concerning the possible or assumed future results
of operations of Dura, including forecasts, projections and descriptions of
expected cost savings or other anticipated synergies related to the acquisitions
of Excel and Adwest. These statements often include words such as "believe,"
"expect," "anticipate," "intend," "plan," "estimate," or similar expressions.
These statements are based on certain assumptions that we have made in light of
our experience in the industry as well as our perceptions of historical trends,
current conditions, expected future developments and other factors we believe
are appropriate in these circumstances. As you read and consider this
prospectus, you should understand that these statements are not guarantees of
performance or results. They involve risks, uncertainties and assumptions.
Although we believe that these forward-looking statements are based on
reasonable assumptions, you should be aware that many factors could affect our
actual financial results or results of operations and could cause actual results
to differ materially from those in the forward-looking statements. These factors
include:
- general economic or business conditions affecting the automotive industry
(which is dependent on consumer spending), either nationally or
regionally, being less favorable than expected;
- expected synergies, economies of scale and cost savings from the
acquisitions of Excel and Adwest not being fully realized or realized
within the expected time frames;
- costs or operational difficulties related to integrating the operations of
Excel and Adwest with our operations being greater than expected;
- our failure to develop or successfully introduce new products;
- increased competition in the automotive components supply market;
- unforseen problems associated with international sales, including gains
and losses from foreign currency exchange;
- implementation of or changes in the laws, regulations or policies
governing the automotive industry that could negatively affect the
automotive components supply industry;
- changes in general economic conditions in the United States and Europe;
and
- various other factors beyond our control.
All future written and oral forward-looking statements by us or persons
acting on our behalf are expressly qualified in their entirety by the cautionary
statements contained or referred to above. Except for our ongoing obligations to
disclose material information as required by the federal securities laws, we do
not have any obligation or intention to release publicly any revisions to any
forward-looking statements to reflect events or circumstances in the future or
to reflect the occurrence of unanticipated events. YOU SHOULD ALSO READ
CAREFULLY THE FACTORS DESCRIBED IN THE "RISK FACTORS" SECTION OF THIS
PROSPECTUS.
THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
We originally sold the outstanding notes on April 22, 1999 to the initial
purchasers. The initial purchasers subsequently placed the outstanding notes
with (1) qualified institutional buyers in reliance on Rule 144A under the
Securities Act and (2) qualified buyers outside the United States in reliance
upon Registration S under the Securities Act.
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As a condition to such sale, we entered into registration rights agreements
with the initial purchasers. The registration rights agreements provide that:
(1) we will file an exchange offer registration statement with the SEC on or
prior to 60 days after the closing date of the initial offering;
(2) we will use our reasonable best efforts to have the exchange offer
registration statement declared effective by the SEC on or prior to 150
days after the closing date;
(3) unless the exchange offer would not be permitted by applicable law or
SEC policy, we will commence the exchange offer and use our reasonable
best efforts to issue on or prior to 30 business days after the date on
which the exchange offer registration statement was declared effective by
the SEC, exchange notes in exchange for all outstanding notes tendered
prior thereto in the exchange offer; and
(4) if obligated to file the shelf registration statement, we will use our
reasonable best efforts to file the shelf registration statement with the
SEC on or prior to 30 days after such filing obligation arises and to
cause the shelf registration statement to be declared effective by the
SEC on or prior to 120 days after such obligation arises.
For each outstanding note surrendered to us pursuant to the exchange offer, the
holder of such outstanding note will receive an exchange note having a principal
amount equal to that of the surrendered note. Interest on each outstanding note
will accrue from the last interest payment date on which interest was paid on
the outstanding note surrendered in exchange therefor or, if no interest has
been paid on such outstanding note, from the date of its original issue.
Interest on each exchange note will accrue from the date of its original issue.
Under existing interpretations of the Staff of the SEC contained in several
no-action letters to third parties, the exchange notes will in general be freely
tradeable after the exchange offer without further registration under the
Securities Act. However, any purchaser of outstanding notes who is our
"affiliate" or who intends to participate in the exchange offer for the purpose
of distributing the exchange notes:
(1) will not be able to rely on the interpretation of the Staff of the SEC;
(2) will not be able to tender its outstanding notes in the exchange offer;
and
(3) must comply with the registration and prospectus delivery requirements
of the Securities Act in connection with any sale or transfer of the
exchange notes, unless such sale or transfer is made pursuant to an
exemption from such requirements.
As contemplated by these no-action letters and the registration rights
agreements, each holder accepting the exchange offer is required to represent to
us in the letter of transmittal or agent's message that:
(1) the exchange notes are to be acquired by the holder or the person
receiving such exchange notes, whether or not such person is the holder,
in the ordinary course of business;
(2) the holder or any such other person (other than a broker-dealer referred
to in the next sentence) is not engaging and does not intend to engage,
in distribution of the exchange notes;
(3) the holder or any such other person has no arrangement or understanding
with any person to participate in the distribution of the exchange notes;
(4) neither the holder nor any such other person is our "affiliate" within
the meaning of Rule 405 under the Securities Act; and
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(5) the holder or any such other person acknowledges that if such holder or
any other person participates in the exchange offer for the purpose of
distributing the exchange notes it must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with
any resale of the exchange notes and cannot rely on those no-action
letters.
As indicated above, each participating broker-dealer that receives an exchange
note for its own account in exchange for outstanding notes must acknowledge that
it (A) acquired the outstanding notes for its own account as a result of
market-making activities or other trading activities, (B) has not entered into
any arrangement or understanding with us or any of our "affiliates" (within the
meaning of Rule 405 under the Securities Act) to distribute the exchange notes
to be received in the exchange offer and (C) will deliver a prospectus meeting
the requirements of the Securities Act in connection with any resale of such
exchange notes. For a description of the procedures for resales by participating
broker-dealers, see "Plan of Distribution."
In the event that changes in the law or the applicable interpretations of
the Staff of the SEC do not permit us to effect such an exchange offer, or if
for any other reason we do not meet the time periods set forth in the second
paragraph of this section, we will:
(1) file a shelf registration statement covering resales of the outstanding
notes;
(2) use our reasonable best efforts to cause the shelf registration
statement to be declared effective under the Securities Act; and
(3) use our reasonable best efforts to keep effective the shelf registration
statement until two years after the closing date of the initial offering.
We will, in the event of the filing of the shelf registration statement, provide
to each applicable holder of the outstanding notes copies of the prospectus
which is a part of the shelf registration statement, notify each such holder
when the shelf registration statement has become effective and take certain
other actions as are required to permit unrestricted resale of the outstanding
notes. A holder of the outstanding notes that sells such outstanding notes
pursuant to the shelf registration statements generally will be required to be
named as a selling security holder in the related prospectus and to deliver a
prospectus to purchasers, will be subject to certain of the civil liability
provisions under the Securities Act in connection with such sales and will be
bound by the provisions of the registration rights agreement which are
applicable to such a holder (including certain indemnification obligations). In
addition, each holder of the outstanding notes will be required to deliver
information to be used in connection with the shelf registration statement and
to provide comments on the shelf registration statement within the time periods
set forth in the registration rights agreement in order to have its outstanding
notes included in the shelf registration statement and to benefit from the
provisions set forth in the following paragraph.
If:
(a) we fail to file any of the registration statements required by the
registration rights agreements on or before the date specified for such
filing;
(b) any of such registration statements is not declared effective by the SEC
on or prior to the date specified for such effectiveness (the
"Effectiveness Target Date"); or
(c) we fail to consummate the exchange offer within 30 business days of the
Effectiveness Target Date with respect to the exchange offer registration
statement; or
(d) the shelf registration statement or the exchange offer registration
statement is declared effective but thereafter ceases to be effective or
usable in connection with resales of transfer restricted securities
during the periods specified in the registration rights agreements (each
such event referred to in clauses (a) through (d) above a "Registration
Default"),
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then we will pay additional interest, to each holder of notes, with respect to
the first 90-day period immediately following the occurrence of the first
Registration Default in an amount equal to .50% per annum over the stated rate
for the notes held by such holder. The amount of the additional interest will
increase by an additional .50% over the stated rate for the notes per annum with
respect to each subsequent 90-day period until all Registration Defaults have
been cured, up to a maximum amount of additional interest, if any, for all
Registration Defaults of 1.0% per annum over the stated rate of the notes. We
will pay all accrued additional interest on each interest payment date to the
global note holder by wire transfer of immediately available funds or by federal
funds check and to holders of certificated securities by wire transfer to the
accounts specified by them or by mailing checks to their registered addresses if
no such accounts have been specified. Following the cure of all Registration
Defaults, the accrual of additional interest will cease.
Following the consummation of the exchange offer, holders of the outstanding
notes who were eligible to participate in the exchange offer but who did not
tender its outstanding notes will not have any further registration rights and
such outstanding notes will continue to be subject to certain restrictions on
transfer. Accordingly, the liquidity of the market for such outstanding notes
could be adversely affected.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this prospectus
and in the letter of transmittal, we will accept any and all outstanding notes
validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on
the expiration date. We will issue $1,000 or [EURO]1,000, as applicable,
principal amount of exchange notes in exchange for each $1,000 or [EURO]1,000
principal amount of outstanding notes accepted in the exchange offer. Holders
may tender some or all of its outstanding notes pursuant to the exchange offer.
However, outstanding notes may be tendered only in integral multiples of $1,000
or [EURO]1,000, as applicable.
The form and terms of the exchange notes are the same as the form and terms
of the outstanding notes except that:
(1) the exchange notes bear a Series B designation and a different CUSIP
Number from the outstanding notes;
(2) the exchange notes have been registered under the Securities Act and
hence will not bear legends restricting the transfer thereof; and
(3) the holders of the exchange notes will not be entitled to certain rights
under the registration rights agreements, including the provisions
providing for an increase in the interest rate on the outstanding notes
in certain circumstances relating to the timing of the exchange offer,
all of which rights will terminate when the exchange offer is terminated.
The exchange notes will evidence the same debt as the outstanding notes and will
be entitled to the benefits of the indentures.
As of the date of this prospectus, $300,000,000 aggregate principal amount
of the dollar notes and [EURO]100,000,000 aggregate principal amount of the euro
notes were outstanding. We have fixed the close of business on August 6, 1999 as
the record date for the exchange offer for purposes of determining the persons
to whom this prospectus and the letter of transmittal will be mailed initially.
Holders of outstanding notes do not have any appraisal or dissenters' rights
under the General Corporation Law of Delaware, or the indentures in connection
with the exchange offer. We intend to conduct the exchange offer in accordance
with the applicable requirements of the Exchange Act and the rules and
regulations of the SEC thereunder.
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We will be deemed to have accepted validly tendered outstanding notes when,
as and if we have given oral or written notice thereof to the exchange agent.
The exchange agent will act as agent for the tendering holders for the purpose
of receiving the exchange notes from us.
If any tendered outstanding notes are not accepted for exchange because of
an invalid tender, the occurrence of certain other events set forth in this
prospectus or otherwise, the certificates for any such unaccepted outstanding
notes will be returned, without expense, to the tendering holder thereof as
promptly as practicable after the expiration date.
Holders who tender outstanding notes in the exchange offer will not be
required to pay brokerage commissions or fees or, subject to the instructions in
the letter of transmittal, transfer taxes with respect to the exchange of
outstanding notes pursuant to the exchange offer. We will pay all charges and
expenses, other than transfer taxes in certain circumstances, in connection with
the exchange offer. See "--Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "expiration date" will mean 5:00 p.m., New York City time, on
September 8, 1999, unless we, in our sole discretion, extend the exchange offer,
in which case the term "expiration date" will mean the latest date and time to
which the exchange offer is extended.
In order to extend the exchange offer, we will notify the exchange agent of
any extension by oral or written notice and will mail to the registered holders
an announcement thereof, each prior to 9:00 a.m., New York City time, on the
next business day after the previously scheduled expiration date.
We reserve the right, in our sole discretion, (1) to delay accepting any
outstanding notes, to extend the exchange offer or to terminate the exchange
offer if any of the conditions set forth below under "--Conditions" will not
have been satisfied, by giving oral or written notice of such delay, extension
or termination to the exchange agent or (2) to amend the terms of the exchange
offer in any manner. Any such delay in acceptance, extension, termination or
amendment will be followed as promptly as practicable by oral or written notice
thereof to the registered holders.
INTEREST ON THE EXCHANGE NOTES
The exchange notes will bear interest from their date of issuance. Holders
of outstanding notes that are accepted for exchange will receive, in cash,
accrued interest thereon to, but not including, the date of issuance of the
exchange notes. Such interest will be paid with the first interest payment on
the exchange notes on November 1, 1999. Interest on the outstanding notes
accepted for exchange will cease to accrue upon issuance of the exchange notes.
Interest on the exchange notes is payable semi-annually on each May 1 and
November 1, commencing on November 1, 1999.
PROCEDURES FOR TENDERING
PROCEDURES FOR TENDERING THE EURO NOTES DEPOSITED WITH EUROCLEAR
To tender in the exchange offer, a holder of outstanding notes that are
deposited with Euroclear must: (i) read this prospectus and the accompanying
letter of transmittal and (ii) comply with the procedures established by
Euroclear for transfer of book-entry interests through the electronic transfer
systems of Euroclear prior to 5:00 p.m. New York Time, on the expiration date.
For tender of these outstanding notes to be effective, book-entry interests in
the outstanding notes must be transferred through Euroclear's electronic
transfer system prior to 5:00 p.m., New York Time, on the expiration date.
Delivery of these outstanding notes must be made by book-entry transfer in
accordance with the
26
<PAGE>
procedures communicated to the holders of these outstanding notes through the
electronic transfer systems of Euroclear. Confirmation of such book-entry
transfer must be received by the exchange agent prior to the expiration date.
The tender by a holder of these outstanding notes and the acceptance thereof
by the Issuer will constitute agreement between such holder and the Issuer in
accordance with the terms and subject to the conditions set forth herein and in
the letter of transmittal, including the representations and warranties set
forth in the letter of transmittal. In addition, by tendering these notes, the
tendering holder acknowledges that Euroclear will disclose the identity of such
tendering holder to the exchange agent and the Issuer.
Any beneficial owner whose outstanding 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 to tender on such beneficial owner's behalf.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered notes and withdrawal of tendered notes will be
determined by the Issuer in its sole discretion, which determination will be
final and binding. The Issuer reserves the absolute right to reject any and all
notes not properly tendered or any notes the Issuer's acceptance of which would,
in the opinion of counsel for the Issuer, be unlawful. The Issuer also reserves
the right in its sole discretion to waive any defects, irregularities or
conditions of tender as to particular notes. The Issuer's interpretation of the
terms and conditions of the exchange offer (including the instructions in the
letter of transmittal) will be final and binding on all parties. Unless waived,
any defects or irregularities in connection with tenders of notes must be cured
within such time as the Issuer shall determine. Although the Issuer intends to
notify holders of defects or irregularities with respect to tenders of notes,
neither the Issuer, the exchange agent nor any other person shall incur any
liability for failure to give such notification. Tenders of notes will not be
deemed to have been made until such defects or irregularities have been cured or
waived.
WITHDRAWAL OF TENDERS OF EURO NOTES DEPOSITED WITH EUROCLEAR
Except as otherwise provided herein, tenders of outstanding notes may be
withdrawn at any time prior to 5:00 p.m. New York Time, on the expiration date.
To withdraw a tender of outstanding notes in the exchange offer, a tested
telex of SWIFT message relating to such withdrawal must be received by Euroclear
prior to 5:00 p.m., New York Time, on the expiration date. Any such notice of
withdrawal must comply with the procedures for withdrawal of tenders established
by Euroclear. All questions as to the validity, form and eligibility (including
time of receipt) of such notices will be determined by the Issuer, whose
determination shall be final and binding on all parties. Any notes so withdrawn
will be deemed not to have been validly tendered for purposes of the exchange
offer and not exchange notes will be issued with respect thereto unless the
notes so withdrawn are validly retendered. Any notes which have been tendered
but which are not accepted for exchange will be returned to the holder thereof
without cost to such holder as soon as practicable after withdrawal, rejection
of tender or termination of the exchange offer. Properly withdrawn notes may be
retendered by following one of the procedures described above under
"--Procedures for Tendering the Euro Notes Deposited with Euroclear" at any time
prior to the expiration date.
PROCEDURES FOR TENDERING OUTSTANDING NOTES DEPOSITED WITH DTC
To tender in the exchange offer, a holder must complete, sign and date the
letter of transmittal, or a facsimile thereof, have the signatures thereon
guaranteed if required by the letter of transmittal or transmit an agent's
message in connection with a book-entry transfer, and mail or otherwise deliver
27
<PAGE>
such letter of transmittal or such facsimile, together with the outstanding
notes and any other required documents, to the exchange agent prior to 5:00
p.m., New York City time, on the expiration date. To be tendered effectively,
the outstanding notes, letter of transmittal or an agent's message and other
required documents must be completed and received by the exchange agent at the
address set forth below under "Exchange Agent" prior to 5:00 p.m., New York City
time, on the expiration date. Delivery of the outstanding notes may be made by
book-entry transfer in accordance with the procedures described below.
Confirmation of such book-entry transfer must be received by the exchange agent
prior to the expiration date.
The term "agent's message" means a message, transmitted by a book-entry
transfer facility to, and received by, the exchange agent forming a part of a
confirmation of a book-entry, which states that such book-entry transfer
facility has received an express acknowledgment from the participant in such
book-entry transfer facility tendering the outstanding notes that such
participant has received and agrees: (1) to participate in the Automated Tender
Option Program ("ATOP"); (2) to be bound by the terms of the letter of
transmittal; and (3) that we may enforce such agreement against such
participant.
By executing the letter of transmittal, each holder will make to us the
representations set forth above in the third paragraph under the heading
"--Purpose and Effect of the Exchange Offer."
The tender by a holder and our acceptance thereof will constitute agreement
between such holder and us in accordance with the terms and subject to the
conditions set forth in this prospectus and in the letter of transmittal or
agent's message.
THE METHOD OF DELIVERY OF OUTSTANDING NOTES AND THE LETTER OF TRANSMITTAL OR
AGENT'S MESSAGE AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE
ELECTION AND SOLE RISK OF THE HOLDER. AS AN ALTERNATIVE TO DELIVERY BY MAIL,
HOLDERS MAY WISH TO CONSIDER OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT
BEFORE THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR OUTSTANDING NOTES SHOULD
BE SENT TO US. HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL
BANKS, TRUST COMPANIES OR NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR SUCH
HOLDERS.
Any beneficial owner whose outstanding 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 to tender on such beneficial owner's behalf. See "Instructions
to Registered Holder and/or Book-Entry Transfer Facility Participant from
Beneficial Owner" included with the letter of transmittal.
Signatures on a letter of transmittal or a notice of withdrawal, as the case
may be, must be guaranteed by an eligible institution (as defined below) unless
the outstanding notes tendered pursuant thereto are tendered (1) by a registered
holder who has not completed the box entitled "Special Registration
Instructions" or "Special Delivery Instructions" on the letter of transmittal or
(2) for the account of an eligible institution. 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 guarantee must be by a member firm of the
Medallion System (an "eligible institution").
If the letter of transmittal is signed by a person other than the registered
holder of any outstanding notes listed in this prospectus, such outstanding
notes must be endorsed or accompanied by a properly completed bond power, signed
by such registered holder as such registered holder's name appears on such
outstanding notes with the signature thereon guaranteed by an eligible
institution.
If the letter of transmittal or any outstanding notes or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
offices of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and evidence
satisfactory to us of its authority to so act must be submitted with the letter
of transmittal.
28
<PAGE>
We understand that the exchange agent will make a request promptly after the
date of this prospectus to establish accounts with respect to the outstanding
notes at the book-entry transfer facility, DTC (the "Book-Entry Transfer
Facility"), for the purpose of facilitating the exchange offer, and subject to
the establishment thereof, any financial institution that is a participant in
the Book-Entry Transfer Facility's system may make book-entry delivery of
outstanding notes by causing such Book-Entry Transfer Facility to transfer such
outstanding notes into the exchange agent's account with respect to the
outstanding notes in accordance with the Book-Entry Transfer Facility's
procedures for such transfer. Although delivery of the outstanding notes may be
effected through book-entry transfer into the exchange agent's account at the
Book-Entry Transfer Facility, unless an Agent's Message is received by the
exchange agent in compliance with ATOP, an appropriate letter of transmittal
properly completed and duly executed with any required signature guarantee and
all other required documents must in each case be transmitted to and received or
confirmed by the exchange agent at its address set forth below on or prior to
the expiration date, or, if the guaranteed delivery procedures described below
are complied with, within the time period provided under such procedures.
Delivery of documents to the Book-Entry Transfer Facility does not constitute
delivery to the exchange agent.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered outstanding notes and withdrawal of tendered
outstanding notes will be determined by us in our sole discretion, which
determination will be final and binding. We reserve the absolute right to reject
any and all outstanding notes not properly tendered or any outstanding notes our
acceptance of which would, in the opinion of our counsel, be unlawful. We also
reserve the right in our sole discretion to waive any defects, irregularities or
conditions of tender as to particular outstanding notes. Our interpretation of
the terms and conditions of the exchange offer (including the instructions in
the letter of transmittal) will be final and binding on all parties. Unless
waived, any defects or irregularities in connection with tenders of outstanding
notes must be cured within such time as the Issuer will determine. Although we
intend to notify holders of defects or irregularities with respect to tenders of
outstanding notes, neither the Issuer, the exchange agent nor any other person
will incur any liability for failure to give such notification. Tenders of
outstanding notes will not be deemed to have been made until such defects or
irregularities have been cured or waived. Any outstanding notes received by the
exchange agent that are not properly tendered and as to which the defects or
irregularities have not been cured or waived will be returned by the exchange
agent to the tendering holders, unless otherwise provided in the letter of
transmittal, as soon as practicable following the expiration date.
GUARANTEED DELIVERY PROCEDURES FOR NOTES DEPOSITED WITH DTC
Holders who wish to tender their outstanding notes and (1) whose outstanding
notes are not immediately available, (2) who cannot deliver their outstanding
notes, the letter of transmittal or any other required documents to the exchange
agent or (3) who cannot complete the procedures for book-entry transfer, prior
to the expiration date, may effect a tender if:
(A) the tender is made through an eligible institution;
(B) prior to the expiration date, the exchange agent receives from such
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, the certificate
number(s) of such outstanding notes and the principal amount of
outstanding notes tendered, stating that the tender is being made thereby
and guaranteeing that, within three New York Stock Exchange trading days
after the expiration date, the letter of transmittal (or facsimile
thereof) together with the certificate(s) representing the outstanding
notes (or a confirmation of book-entry transfer of such outstanding notes
into the exchange agent's account at the Book-Entry Transfer Facility),
and any other documents required by the letter of transmittal will be
deposited by the eligible institution with the exchange agent; and
29
<PAGE>
(C) such properly completed and executed letter of transmittal (of facsimile
thereof), as well as the certificate(s) representing all tendered
outstanding notes in proper form for transfer (or a confirmation of
book-entry transfer of such outstanding notes into the exchange agent's
account at the Book-Entry Transfer Facility), and all other documents
required by the letter of transmittal are received by the exchange agent
upon five New York Stock Exchange trading days after the expiration date.
Upon request to the exchange agent, a notice of guaranteed delivery will be
sent to holders who wish to tender their outstanding notes according to the
guaranteed delivery procedures set forth above.
WITHDRAWAL OF TENDERS OF NOTES DEPOSITED WITH DTC
Except as otherwise provided in this prospectus, tenders of outstanding
notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on
the expiration date.
To withdraw a tender of outstanding notes in the exchange offer, a telegram,
telex, letter or facsimile transmission notice of withdrawal must be received by
the exchange agent at its address set forth in this prospectus prior to 5:00
p.m., New York City time, on the expiration date. Any such notice of withdrawal
must:
(1) specify the name of the person having deposited the outstanding notes to
be withdrawn;
(2) identify the outstanding notes to be withdrawn, including the
certificate number(s) and principal amount of such outstanding notes, or,
in the case of outstanding notes transferred by book-entry transfer, the
name and number of the account at the Book-Entry Transfer Facility to be
credited;
(3) be signed by the holder in the same manner as the original signature on
the letter of transmittal by which such outstanding notes were tendered,
including any required signature guarantees, or be accompanied by
documents of transfer sufficient to have the Trustee with respect to the
outstanding notes register the transfer of such outstanding notes into
the name of the person withdrawing the tender; and
(4) specify the name in which any such outstanding notes are to be
registered, if different from that of the person who deposited the
outstanding notes.
All questions as to the validity, form and eligibility (including time of
receipt) of such notices will be determined by us, whose determination will be
final and binding on all parties. Any outstanding notes so withdrawn will be
deemed not to have been validly tendered for purposes of the exchange offer and
no exchange notes will be issued with respect thereto unless the outstanding
notes so withdrawn are validly retendered. Any outstanding notes which have been
tendered but which are not accepted for exchange will be returned to the holder
thereof without cost to such holder as soon as practicable after withdrawal,
rejection of tender or termination of the exchange offer. Properly withdrawn
outstanding notes may be retendered by following one of the procedures described
above under "--Procedures for Tendering" at any time prior to the expiration
date.
CONDITIONS
Notwithstanding any other term of the exchange offer, we will not be
required to accept for exchange, or exchange notes for, any outstanding notes,
and may terminate or amend the exchange offer as provided in this prospectus
before the acceptance of such outstanding notes, if:
(1) any action or proceeding is instituted or threatened in any court or by
or before any governmental agency with respect to the exchange offer
which, in our sole judgment, might materially impair our ability to
proceed with the exchange offer or any material adverse development has
occurred in any existing action or proceeding with respect to us or any
of our subsidiaries; or
30
<PAGE>
(2) any law, statute, rule, regulation or interpretation by the Staff of the
SEC is proposed, adopted or enacted, which, in our sole judgment, might
materially impair our ability to proceed with the exchange offer or
materially impair the contemplated benefits of the exchange offer to us;
or
(3) any governmental approval has not been obtained, which approval we will,
in our sole discretion, deem necessary for the consummation of the
exchange offer as contemplated hereby.
If we determine in our sole discretion that any of the conditions are not
satisfied, we may (1) refuse to accept any outstanding notes and return all
tendered outstanding notes to the tendering holders, (2) extend the exchange
offer and retain all outstanding notes tendered prior to the expiration of the
exchange offer, subject, however, to the rights of holders to withdraw such
outstanding notes (see "--Withdrawal of Tenders") or (3) waive such unsatisfied
conditions with respect to the exchange offer and accept all properly tendered
outstanding notes which have not been withdrawn.
EXCHANGE AGENT
U.S. Bank Trust National Association has been appointed as exchange agent
for the exchange offer. Questions and requests for assistance, requests for
additional copies of this prospectus or of the letter of transmittal and
requests for notice of guaranteed delivery should be directed to the exchange
agent addressed as follows:
U.S. BANK TRUST NATIONAL ASSOCIATION
180 EAST FIFTH STREET
ST. PAUL, MINNESOTA 55101
ATTENTION: SPECIALIZED FINANCE DEPARTMENT
BY FACSIMILE:
(ELIGIBLE INSTITUTIONS ONLY)
(651) 244-1537
FOR INFORMATION OR
CONFIRMATION BY TELEPHONE:
(651) 244-1572
OR
THE INDUSTRIAL BANK OF JAPAN (LUXEMBOURG) S.A.
6 RUE JEAN MONNET, P.O. BOX 68
L-2180 LUXEMBOURG
BY FACSIMILE:
(ELIGIBLE INSTITUTIONS ONLY)
352 42 16 17 448
FOR INFORMATION ONLY OR
CONFIRMATION BY TELEPHONE:
352 42 16 17 550
DELIVERY TO AN ADDRESS OTHER THAN SET FORTH ABOVE WILL NOT CONSTITUTE A
VALID DELIVERY.
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<PAGE>
FEES AND EXPENSES
We will bear the expenses of soliciting tenders. The principal solicitation
is being made by mail; however, additional solicitation may be made by
telegraph, telecopy, telephone or in person our and our affiliates' officers and
regular employees.
We have not retained any dealer-manager in connection with the exchange
offer and will not make any payments to brokers, dealers, or others soliciting
acceptances of the exchange offer. We will, however, pay the exchange agent
reasonable and customary fees for its services and will reimburse it for its
reasonable out-of-pocket expenses in connection therewith.
We will pay the cash 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
The exchange notes will be recorded at the same carrying value as the
outstanding notes, which is face value, as reflected in our accounting records
on the date of exchange. Accordingly, we will not recognize any gain or loss for
accounting purposes as a result of the exchange offer. The expenses of the
exchange offer will be deferred and charged to expense over the term of the
exchange notes.
CONSEQUENCES OF FAILURE TO EXCHANGE
The outstanding notes that are not exchanged for exchange notes pursuant to
the exchange offer will remain restricted securities. Accordingly, such
outstanding notes may be resold only (1) to us (upon redemption thereof or
otherwise), (2) so long as the outstanding notes are eligible for resale
pursuant to Rule 144A, to a person inside the United States whom the seller
reasonably believes is a qualified institutional buyer within the meaning of
Rule 144A under the Securities Act in a transaction meeting the requirements of
Rule 144A, in accordance with Rule 144 under the Securities Act, or pursuant to
another exemption from the registration requirements of the Securities Act (and
based upon an opinion of counsel reasonably acceptable to us), (3) outside the
United States to a foreign person in a transaction meeting the requirements of
Rule 904 under the Securities Act, or (4) pursuant to an effective registration
statement under the Securities Act, in each case in accordance with any
applicable securities laws of any state of the United States.
RESALE OF THE EXCHANGE NOTES
With respect to resales of exchange notes, based on interpretations by the
Staff of the SEC set forth in no-action letters issued to third parties, we
believe that a holder or other person who receives exchange notes, whether or
not such person is the holder (other than a person that is our "affiliate"
within the meaning of Rule 405 under the Securities Act) in exchange for
outstanding notes in the ordinary course of business and who is not
participating, does not intend to participate, and has no arrangement or
understanding with any person to participate, in the distribution of the
exchange notes, will be allowed to resell the exchange notes to the public
without further registration under the Securities Act and without delivering to
the purchasers of the exchange notes a prospectus that satisfies the
requirements of Section 10 of the Securities Act. However, if any holder
acquires exchange notes in the exchange offer for the purpose of distributing or
participating in a distribution of the exchange notes, such holder cannot rely
on the position of the Staff of the SEC expressed in such no-action letters or
any similar interpretive letters, and must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
resale transaction, unless an exemption from registration is otherwise
available. Further, each participating broker-dealer that receives exchange
notes for its own account in exchange for outstanding notes, where such
outstanding notes were acquired by such participating broker-dealer as a result
of market-making activities or other trading activities, must acknowledge that
it will deliver a prospectus in connection with any resale of such exchange
notes.
32
<PAGE>
USE OF PROCEEDS
This exchange offer is intended to satisfy certain of our obligations under
the registration rights agreements. We will not receive any cash proceeds from
the issuance of the exchange notes. In consideration for issuing the exchange
notes contemplated in this prospectus, we will receive outstanding notes in like
principal amount, the form and terms of which are the same as the form and terms
of the exchange notes (which replace the outstanding notes), except as otherwise
described in this prospectus.
The Issuer received approximately $397.0 million in net proceeds from the
sale of the outstanding notes in the initial offering. The Issuer used
approximately $300.1 million of the net proceeds to repay a portion of the
indebtedness outstanding under its new credit facility and will use the balance
for general corporate purposes.
We used borrowings under the new credit facility: (1) to pay $207.2 million
to the former Adwest shareholders, (2) to pay $334.6 million to the former Excel
shareholders, (3) to refinance an aggregate of approximately $456.9 million of
outstanding indebtedness of Dura, Excel and Adwest and (4) to pay approximately
$50.0 million in fees and expenses and prepayment penalties related to the
Acquisitions. As of March 31, 1999, interest rates on borrowings under the new
credit facility ranged from 5.28% to 10.00%. The term loan repaid out of the net
proceeds of the initial offering was due and payable in September 2000 and the
revolving credit facility is available until March 2005. See "Capitalization"
and "Description of Other Indebtedness--New Credit Facility."
33
<PAGE>
CAPITALIZATION
The following table sets forth as of March 31, 1999: (1) the actual
consolidated capitalization of Dura, and (2) the as adjusted capitalization of
Dura giving effect to the initial offering and the application of the net
proceeds therefrom and the repurchase of the Trident notes. This exchange offer
will not generate any net cash proceeds to the Issuer. This table should be read
in conjunction with the audited and unaudited consolidated financial statements
and related notes and the unaudited pro forma financial statements and related
notes appearing elsewhere in this prospectus.
<TABLE>
<CAPTION>
AS OF MARCH 31, 1999
----------------------------
ACTUAL AS ADJUSTED(1)
------------ --------------
<S> <C> <C>
(DOLLARS IN THOUSANDS)
Cash and cash equivalents........................................................... $ 39,267 $ 55,247
------------ --------------
------------ --------------
Long-term debt, including current maturities:
New credit facility:
Revolving credit facility..................................................... $ 100,086 $ --
Tranche A term loan........................................................... 250,740 250,740
Tranche B term loan........................................................... 275,000 275,000
Interim term loan............................................................. 200,000 --
Other senior indebtedness......................................................... 165,331 165,331
------------ --------------
Total senior debt............................................................... 991,157 691,071
------------ --------------
Trident notes (2)................................................................. 80,934 --
9% senior subordinated notes...................................................... -- 408,000
------------ --------------
Total subordinated debt......................................................... 80,934 408,000
------------ --------------
Total debt.................................................................... 1,072,091 1,099,071
------------ --------------
Trust Preferred Securities (3)...................................................... 55,250 55,250
Stockholders' investment:
Preferred Stock, $1.00 par value per share; 5,000,000 shares authorized; none
issued or outstanding........................................................... -- --
Class A Common Stock, $0.01 par value per share; 60,000,000 shares authorized;
13,943,622 shares issued and outstanding on an actual basis..................... 140 140
Class B Common Stock, $0.01 par value per share; 10,000,000 shares authorized;
3,325,303 shares issued and outstanding on an actual basis...................... 33 33
Additional paid-in capital........................................................ 335,884 335,884
Retained earnings................................................................. 70,544 70,544
Accumulated other comprehensive loss.............................................. (13,139) (13,139)
------------ --------------
Total stockholders' investment.................................................. 393,462 393,462
------------ --------------
Total capitalization.......................................................... $ 1,520,803 $ 1,547,783
------------ --------------
------------ --------------
</TABLE>
- ------------------------
(1) As adjusted to give effect to the initial offering, which was completed on
April 22, 1999 and the retirement of the Trident notes, which was completed
on June 24, 1999. Proceeds are net of discounts and commissions and the
expenses of the initial offering.
(2) Represents the Trident notes, which were issued in December 1997 and
subsequently repurchased in June 1999.
(3) Represents the Trust Preferred Securities issued by the Dura Trust in March
1998. The sole assets of the Dura Trust are approximately $57.0 million
principal amount of DASI's 7 1/2% convertible subordinated debentures due
March 31, 2028, such amount being the sum of the stated liquidation
preference of the Trust Preferred Securities and the capital contributed by
DASI in exchange for the common securities of the Dura Trust. DASI has
guaranteed, on a subordinated basis, certain obligations of the Dura Trust
under the Trust Preferred Securities.
34
<PAGE>
UNAUDITED PRO FORMA FINANCIAL STATEMENTS
The Unaudited Pro Forma Statement of Operations for the year ended December
31, 1998 gives effect to: (1) the acquisitions of Universal, Trident, the Hinge
Business, Excel and Adwest by Dura, (2) Excel's July 1 acquisition of 70% of
Schade, (3) the March 1998 issuance of the Trust Preferred Securities, (4) the
June 1998 Offering, (5) the borrowings under the new credit facility, (6) the
initial offering and (7) the retirement of the Trident notes and the application
of the net proceeds therefrom, as if such transactions had occurred on January
1, 1998. The results of operations of Adwest represent Adwest's results of
operations for the twelve month period ended December 31, 1998.
The Unaudited Pro Forma Statement of Operations for the three months ended
March 31, 1999 gives effect to: (1) the acquisitions of Excel and Adwest, (2)
the borrowings under the new credit facility, (3) the initial offering and (4)
the retirement of the Trident notes and the application of the net proceeds
therefrom, as if such transactions had occurred on January 1, 1999.
The unaudited pro forma financial data presented in this prospectus are
based on the assumptions and adjustments described in the accompanying notes.
The Unaudited Pro Forma Statements of Operations do not purport to represent
what our results of operations actually would have been if the events described
above had occurred as of the dates indicated or what our results will be for any
future periods. The Unaudited Pro Forma Financial Statements are based upon
assumptions and adjustments that we believe are reasonable. You should read the
Unaudited Pro Forma Financial Statements and the accompanying notes in
conjunction with the historical financial statements, including the related
notes, included elsewhere in this prospectus.
The acquisitions of Trident, the Hinge Business, Excel, Schade and Adwest
have been accounted for using the purchase method of accounting and,
accordingly, the assets acquired and liabilities assumed have been recorded at
their fair values as of the dates of their respective acquisitions. These
amounts have been recorded based upon preliminary estimates as of such dates.
Further adjustments to the acquired assets and assumed liabilities will be
reflected as a change in goodwill.
35
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC.
UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1999
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
PRO FORMA
DURA(1) EXCEL(5) ADWEST(7) ADJUSTMENTS PRO FORMA
---------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Revenues........................................ $ 264,701 $ 308,705 $ 80,346 $ -- $ 653,752
Cost of sales................................... 218,219 272,716 69,840 (4,806)(8) 555,969
---------- ---------- ----------- ----------- -----------
Gross profit.................................. 46,482 35,989 10,506 4,806 97,783
Selling, general & administrative expenses...... 16,897 17,991 7,027 -- 41,915
Amortization expense............................ 3,685 358 655 1,387(10) 6,085
---------- ---------- ----------- ----------- -----------
Operating income.............................. 25,900 17,640 2,824 3,419 49,783
Interest expense, net........................... 6,895 2,704 2,035 12,262(11) 23,896
Other income.................................... -- (582) -- -- (582)
---------- ---------- ----------- ----------- -----------
Income before provision for income taxes and
minority interest........................... 19,005 15,518 789 (8,843) 26,469
Provision for income taxes...................... 7,711 7,991 433 (5,415) 12) 10,720
Minority interest-trust preferred securities.... 611 -- -- -- 611
Minority interest in subsidiaries............... 1,342 (177) (15) -- 1,150
---------- ---------- ----------- ----------- -----------
Income before extraordinary item and
accounting change........................... 9,341 7,704 371 (3,428) 13,988
Extraordinary item--loss on early extinguishment
of debt, net.................................. (2,702) -- -- -- (2,702)
Cumulative effect of change in accounting,
net........................................... (3,147) -- -- -- (3,147)
---------- ---------- ----------- ----------- -----------
Net income (loss)............................. $ 3,492 $ 7,704 $ 371 $ (3,428) $ 8,139
---------- ---------- ----------- ----------- -----------
---------- ---------- ----------- ----------- -----------
Diluted shares outstanding(15).................. 14,253 4,599 18,852
---------- ----------- -----------
---------- ----------- -----------
Diluted earnings per share(15).................. $ 0.27 $ 0.46
---------- -----------
---------- -----------
Basic shares outstanding(15).................... 12,877 4,599 17,476
---------- ----------- -----------
---------- ----------- -----------
Basic earnings per share........................ $ 0.29 $ 0.47
---------- -----------
---------- -----------
</TABLE>
36
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC.
UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
HINGE
DURA(1) UNIVERSAL(2) TRIDENT(3) BUSINESS(4)
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues.......................................................... $ 739,467 $ 7,836 $ 104,555 $ 34,991
Cost of sales..................................................... 608,518 6,593 86,858 31,632
----------- ----------- ----------- -----------
Gross profit.................................................... 130,949 1,243 17,697 3,359
Selling, general and administrative expenses...................... 49,825 318 15,278 1,400
Amortization expense.............................................. 9,868 -- 1,303 --
----------- ----------- ----------- -----------
Operating income................................................ 71,256 925 1,116 1,959
Interest expense, net............................................. 20,267 -- 4,402 --
Other (income) expense............................................ -- -- 369 --
----------- ----------- ----------- -----------
Income before provision for income taxes and minority
interest...................................................... 50,989 925 (3,655) 1,959
Provision for income taxes........................................ 20,933 370 (1,033) 784
Minority interest-trust preferred securities...................... 1,908 -- -- --
Minority interest in subsidiaries................................. 1,481 -- -- --
----------- ----------- ----------- -----------
Income before extraordinary item................................ 26,667 555 (2,622) 1,175
Extraordinary item--loss on early extinguishment of debt, net..... 643 -- -- --
----------- ----------- ----------- -----------
Net income (loss)............................................... $ 26,024 $ 555 $ (2,622) $ 1,175
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Diluted shares outstanding(15).................................... 11,795
-----------
-----------
Diluted earnings per share(15).................................... $ 2.37
-----------
-----------
Basic shares outstanding(15)...................................... 10,708
-----------
-----------
Basic earnings per share.......................................... $ 2.43
-----------
-----------
<CAPTION>
PRO FORMA
EXCEL(5) SCHADE(6) ADWEST(7) ADJUSTMENTS
------------- ----------- ----------- -----------
<S> <C>
Revenues.......................................................... $ 1,106,103 $ 132,779 $ 399,717 $ --
Cost of sales..................................................... 995,982 117,593 346,972 (23,676)(8)
------------- ----------- ----------- -----------
Gross profit.................................................... 110,121 15,186 52,745 23,676
Selling, general and administrative expenses...................... 76,507 7,494 23,974 (6,000)(9)
Amortization expense.............................................. 2,108 -- 2,927 6,399(10)
------------- ----------- ----------- -----------
Operating income................................................ 31,506 7,692 25,844 23,277
Interest expense, net............................................. 9,623 2,669 9,823 43,282(11)
Other (income) expense............................................ (69) -- -- --
------------- ----------- ----------- -----------
Income before provision for income taxes and minority
interest...................................................... 21,952 5,023 16,021 (20,005)
Provision for income taxes........................................ 3,632 1,419 6,094 (2,549)(12)
Minority interest-trust preferred securities...................... -- -- -- 580(13)
Minority interest in subsidiaries................................. 1,367 -- 633 1,081(14)
------------- ----------- ----------- -----------
Income before extraordinary item................................ 16,953 3,604 9,294 (19,117)
Extraordinary item--loss on early extinguishment of debt, net..... -- -- -- --
------------- ----------- ----------- -----------
Net income (loss)............................................... $ 16,953 $ 3,604 $ 9,294 $ (19,117)
------------- ----------- ----------- -----------
------------- ----------- ----------- -----------
Diluted shares outstanding(15).................................... 5,723
-----------
-----------
Diluted earnings per share(15)....................................
Basic shares outstanding(15)...................................... 6,729
-----------
-----------
Basic earnings per share..........................................
<CAPTION>
PRO FORMA
-------------
Revenues.......................................................... $ 2,525,448
Cost of sales..................................................... 2,170,472
-------------
Gross profit.................................................... 354,976
Selling, general and administrative expenses...................... 168,796
Amortization expense.............................................. 22,605
-------------
Operating income................................................ 163,575
Interest expense, net............................................. 90,066
Other (income) expense............................................ 300
-------------
Income before provision for income taxes and minority
interest...................................................... 73,209
Provision for income taxes........................................ 29,650
Minority interest-trust preferred securities...................... 2,488
Minority interest in subsidiaries................................. 4,562
-------------
Income before extraordinary item................................ 36,509
Extraordinary item--loss on early extinguishment of debt, net..... 643
-------------
Net income (loss)............................................... $ 35,866
-------------
-------------
Diluted shares outstanding(15).................................... 17,518
-------------
-------------
Diluted earnings per share(15).................................... $ 2.05
-------------
-------------
Basic shares outstanding(15)...................................... 17,437
-------------
-------------
Basic earnings per share.......................................... $ 2.06
-------------
-------------
</TABLE>
37
<PAGE>
NOTES TO UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
(1) Represents the results of operations of Dura for the year ended December 31,
1998, including the results of operations of Universal, Trident and the
Hinge Business from their respective dates of acquisition and for the three
months ended March 31, 1999, including the results of operations of Excel
and Adwest from their respective dates of acquisition.
(2) Represents the results of operations of Universal from January 1, 1998
through the date of acquisition, March 8, 1998.
(3) Represents the results of operations of Trident from January 1, 1998 through
the date of acquisition, April 30, 1998.
(4) Represents the results of operations for the Hinge Business from January 1,
1998 through the date of acquisition, August 31, 1998.
(5) Represents the results of operations for Excel for the year ended December
31, 1998 and from January 1, 1999 through the date of acquisition, March 23,
1999. The results of operations for the year ended December 31, 1998 include
the results of operations of Schade from July 1, 1998, the date of its
acquisition, through December 31, 1998.
(6) Represents the results of operations of Schade from January 1, 1998 through
the date of its acquisition by Excel, July 1, 1998.
(7) Represents the results of operations for Adwest for the twelve months ended
December 31, 1998 and from January 1, 1999 through the date of acquisition,
March 15, 1999.
(8) Reflects the change in depreciation expense resulting from adjustments to
the depreciable lives of property, plant and equipment of Universal,
Trident, the Hinge Business, Excel, Schade and Adwest to their estimated
useful lives at the time of their acquisition and from adjustments to value
such property, plant and equipment at fair value as of the date of
acquisition as follows:
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED ENDED
DECEMBER 31, MARCH 31,
1998 1999
------------ -------------
<S> <C> <C>
Universal....................................................... $ 33 $ --
Trident......................................................... 1,543 --
Hinge Business.................................................. 474 --
Excel........................................................... 12,886 2,962
Schade.......................................................... 5,740 1,282
Adwest.......................................................... 3,000 562
------------ -------------
Total......................................................... $ 23,676 $ 4,806
------------ -------------
------------ -------------
</TABLE>
(9) Reflects the elimination of certain corporate payroll and related costs and
duplicate public company expenses arising from the acquisitions of Excel and
Adwest for the year ended December 31, 1998 as set forth below:
<TABLE>
<S> <C>
Executive management payroll costs.................................. $ 3,500
Public company costs................................................ 1,700
Other............................................................... 800
---------
Total............................................................. $ 6,000
---------
---------
</TABLE>
38
<PAGE>
(10) Represents the additional amortization of goodwill and other intangible
assets arising from the acquisitions of Universal, Trident, the Hinge
Business, Excel, Adwest, net of amortization of goodwill and other
intangible assets previously recorded by Trident, Excel and Adwest:
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED ENDED
DECEMBER 31, MARCH 31,
1998 1999
------------ -------------
<S> <C> <C>
Amortization of goodwill and other intangible assets:
Universal..................................................... $ 87 $ --
Trident....................................................... 2,019 --
Hinge Business................................................ 345 --
Excel/Schade.................................................. 4,966 1,159
Adwest........................................................ 5,320 1,241
------------ -------------
12,737 2,400
Amortization previously recorded by:
Trident....................................................... (1,303) --
Excel......................................................... (2,108) (358)
Adwest........................................................ (2,927) (655)
------------ -------------
(6,338) (1,013)
------------ -------------
Net increase................................................ $ 6,399 $ 1,387
------------ -------------
------------ -------------
</TABLE>
Goodwill is amortized on a straight-line basis over a forty-year period.
Other intangible assets are amortized over the useful life of the related
asset.
(11) Represents the change in interest expense arising from:
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED ENDED
DECEMBER 31, MARCH 31,
1998 1999
------------ -------------
<S> <C> <C>
Interest expense on Term Loan A................................. $ 21,313 $ 5,328
Interest expense on Term Loan B................................. 22,000 5,500
Interest expense on Subordinated Notes.......................... 36,720 9,180
Interest expense on other senior indebtedness................... 6,033 2,888
Amortization of capitalized financing fees...................... 4,000 1,000
------------ -------------
Total adjustments....................................... 90,066 23,896
------------ -------------
Interest expense, net previously recorded by:
Dura............................................................ (20,267) (6,895)
Trident......................................................... (4,402) --
Excel........................................................... (9,623) (2,704)
Schade.......................................................... (2,669) --
Adwest.......................................................... (9,823) (2,035)
------------ -------------
(46,784) (11,634)
------------ -------------
Net increase............................................ $ 43,282 $ 12,262
------------ -------------
------------ -------------
</TABLE>
(12) Adjusts the provision for income taxes on a pro forma basis to reflect
Dura's incremental tax rate of 40.5%.
(13) Represents dividends, net of income taxes, on the Trust Preferred
Securities for the period prior to their issuance in March 1998.
39
<PAGE>
(14) Represents the minority interest in the earnings of Schade for the period
prior to July 1, 1998, the date of its acquisition by Excel.
(15) Basic earnings per share were computed by dividing net income by the
weighted average number of shares of Class A common stock and Class B common
stock outstanding during the year. Diluted earnings per share for the three
months ended March 31, 1999 include the dilutive effects of outstanding
stock options using the treasury stock method and assumes the conversion of
the Trust Preferred Securities into shares of Class A common stock. Diluted
earnings per share for the year ended December 31, 1998 excludes the
conversion of the Trust Preferred Securities (into approximately 1,289,000
shares of Class A common stock), as their effect is anti-dilutive. Pro forma
weighted average shares outstanding include the effects of the shares that
were issued in connection with the acquisition of Excel.
40
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
DURA
The following table sets forth selected consolidated financial data with
respect to Dura for each of the periods indicated. The selected historical
financial data for Dura for the years ended December 31, 1994 through 1998 have
been derived from Dura's consolidated financial statements which have been
audited by Arthur Andersen LLP, independent public accountants. The selected
historical consolidated financial data of Dura for the three months ended March
31, 1998 and 1999 have been derived from unaudited financial statements of Dura
and reflect all adjustments which, in the opinion of management, are necessary
for a fair presentation of the consolidated financial statements for an interim
period. All such adjustments are of a normal, recurring nature. Results of
operations for an interim period are not necessarily indicative of results for
the full year. No separate financial information for the Issuer has been
provided in this prospectus because: (1) DASI does not itself conduct any
operations but rather all operations of Dura are conducted by the Issuer and its
direct and indirect subsidiaries; (2) DASI has no material assets other than the
capital stock of the Issuer; (3) all of the assets and liabilities shown in the
consolidated financial statements for DASI are located at the Issuer and its
direct and indirect subsidiaries; and (4) DASI has unconditionally guaranteed
the notes on an unsecured, senior subordinated basis. The selected historical
consolidated financial data should be read in conjunction with "Management's
Discussion and Analysis of Results of Operations and Financial Condition" and
the consolidated financial statements and notes thereto all included elsewhere
herein.
DURA AUTOMOTIVE SYSTEMS, INC.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
----------------------------------------------------- --------------------
1994(1) 1995(2) 1996(3) 1997(4) 1998(5) 1998 1999
--------- --------- --------- --------- --------- --------- ---------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues............................... $ 189,675 $ 253,726 $ 245,329 $ 449,111 $ 739,467 $ 125,746 $ 264,701
Cost of sales.......................... 170,625 219,559 207,810 375,086 608,518 104,471 218,219
--------- --------- --------- --------- --------- --------- ---------
Gross profit......................... 19,050 34,167 37,519 74,025 130,949 21,275 46,482
Selling, general and administrative
expenses............................. 10,485 15,513 17,157 32,815 49,825 9,160 16,897
Amortization expense................... 690 1,094 1,036 3,600 9,868 1,251 3,685
--------- --------- --------- --------- --------- --------- ---------
Operating income..................... 7,875 17,560 19,326 37,610 71,256 10,864 25,900
Interest expense, net.................. 3,473 4,822 2,589 9,298 20,267 2,938 6,895
Other income (2)....................... -- (4,240) -- -- -- -- --
--------- --------- --------- --------- --------- --------- ---------
Income before income taxes........... 4,402 16,978 16,737 28,312 50,989 7,926 19,005
Provision for income taxes............. 1,822 6,852 6,609 11,670 20,933 3,274 7,711
Equity in losses of affiliate, net..... -- -- -- -- 1,481 -- 1,342
Minority interest (6).................. -- -- -- -- 1,908 76 611
--------- --------- --------- --------- --------- --------- ---------
Income before extraordinary item and
accounting change.................. 2,580 10,126 10,128 16,642 26,667 4,576 9,341
Extraordinary item, net................ -- -- -- -- 643 -- (2,702)
Cumulative effect of change in
accounting, net...................... -- -- -- -- -- -- (3,147)
--------- --------- --------- --------- --------- --------- ---------
Net income............................. $ 2,580 $ 10,126 $ 10,128 $ 16,642 $ 26,024 $ 4,576 $ 3,492
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Basic earnings per share (7)........... $ 0.75 $ 2.04 $ 1.57 $ 1.89 $ 2.43 $ 0.52 $ 0.27
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Diluted earnings per share (7)......... $ 0.75 $ 2.03 $ 1.57 $ 1.88 $ 2.37 $ 0.52 $ 0.29
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
</TABLE>
41
<PAGE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
----------------------------------------------------- --------------------
1994(1) 1995(2) 1996(3) 1997(4) 1998(5) 1998 1999
--------- --------- --------- --------- --------- --------- ---------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
OTHER FINANCIAL DATA:
Depreciation and amortization.......... $ 3,725 $ 5,578 $ 6,079 $ 12,303 $ 27,571 $ 3,067 $ 10,507
Capital expenditures, net.............. 5,406 6,116 6,260 16,242 31,822 3,733 5,994
EBITDA (8)............................. 11,600 23,138 25,405 49,913 98,827 13,931 36,407
Net cash provided by (used in):
Operating activities................. (6,156) 13,138 19,792 8,516 7,687 (2,142) 387
Investing activities................. (46,878) 11,428 (95,093) (93,386) (167,534) (22,311) (543,900)
Financing activities................. 53,037 (22,851) 75,236 87,620 176,620 67,322 564,152
Ratio of earnings to fixed charges
(9).................................. 2.2x 3.4x 5.7x 3.7x 2.7x 3.3x 3.1x
BALANCE SHEET DATA (AT END OF PERIOD):
Cash and cash equivalents.............. $ 17 $ 1,732 $ 1,667 $ 4,148 $ 20,544 $ 46,938 $ 39,267
Working capital........................ 18,631 13,701 27,528 50,304 63,766 103,066 265,890
Total assets........................... 166,133 140,531 246,129 419,264 929,383 500,606 2,260,567
Total debt............................. 74,766 51,776 77,456 180,322 331,906 194,438 1,072,091
Total stockholders' investment......... 17,418 27,683 87,367 101,708 238,037 105,769 393,462
</TABLE>
- ------------------------------
(1) In August 1994, Dura acquired the Brake and Cable Business of Alkin Co. The
results of operations of this acquired business have been included in the
consolidated financial statements of Dura from August 31, 1994, the date of
acquisition.
(2) In April 1995, Dura sold the net assets of its window regulator business to
Rockwell, realizing a pretax gain of approximately $4.2 million. The results
of operations of the window regulator business have been included in the
consolidated financial statements of Dura through April 2, 1995, the date of
divestiture.
(3) Includes the results of operations of (i) the parking brake business from
Rockwell from October 1, 1996 and (ii) KPI from December 5, 1996, their
respective dates of acquisition. Dura issued an aggregate of 3,795,000
shares of its Class A common stock in August 1996 in connection with its
initial public offering.
(4) Includes the results of operations of (i) VOFA from January 1, 1997, (ii)
the parking brake business of Excel from May 5, 1997, (iii) GT Automotive
from August 29, 1997 and (iv) REOM Industries from December 12, 1997, which
represent their respective dates of acquisition.
(5) Includes the results of operations of (i) Universal from March 8, 1998, (ii)
Trident from April 30, 1998, and (iii) the Hinge Business from September 8,
1998, which represent their respective dates of acquisition. In March 1998,
the Dura Trust issued the Trust Preferred Securities. In June 1998, DASI
issued 3,500,000 shares of its Class A common stock, giving effect to the
exercise of the underwriters' over-allotment option.
(6) Represents dividends, net of income taxes, on the Trust Preferred
Securities.
(7) Basic earnings per share were computed by dividing net income by the
weighted average number of shares of Class A common stock and Class B common
stock outstanding during the year. Diluted earnings per share include the
dilutive effects of outstanding stock options using the treasury stock
method and the Trust Preferred Securities.
(8) "EBITDA" is operating income plus depreciation and amortization. EBITDA does
not represent and should not be considered as an alternative to net income
or cash flow from operations as determined by generally accepted accounting
principles, and our calculation thereof may not be comparable to that
reported by other companies. We believe that it is widely accepted that
EBITDA provides useful information regarding a company's ability to service
and/or incur indebtedness. This belief is based, in part, on our
negotiations with our lenders who have required that the interest payable
under our new credit facility be based, in part, on our ratio of
consolidated senior debt to EBITDA. EBITDA does not take into account our
working capital requirements, debt service requirements and other
commitments and, accordingly, is not necessarily indicative of amounts that
may be available for discretionary use.
(9) In calculating the ratio of earnings to fixed charges, earnings consist of
income before income taxes plus fixed charges. Fixed charges consist of
interest expense (which includes amortization of deferred financing costs
and debt issuance costs) and one-third of rental expense, deemed
representative of that portion of rental expense estimated to be
attributable to interest.
42
<PAGE>
EXCEL
The following table sets forth selected consolidated financial data with
respect to Excel for each of the periods indicated. The selected historical
financial data for Excel for the fiscal years ended December 28, 1996, December
27, 1997 and January 2, 1999 have been derived from Excel's consolidated
financial statements, which have been audited by Arthur Andersen LLP,
independent accountants. The selected historical consolidated financial data
should be read in conjunction with "Management's Discussion and Analysis of
Results of Operations and Financial Condition" and the consolidated financial
statements and notes thereto all included elsewhere herein.
EXCEL INDUSTRIES, INC.
<TABLE>
<CAPTION>
YEAR ENDED,
------------------------------------------------------------
JANUARY 2, 1999
DECEMBER 28, 1996 (1) DECEMBER 27, 1997 (2)
--------------------- ----------------- ------------------
<S> <C> <C> <C>
(DOLLARS IN THOUSANDS)
STATEMENT OF OPERATIONS DATA:
Net sales........................................... $ 887,741 $ 962,333 $1,106,103
Cost of goods sold.................................. 783,375 846,990 995,982
-------- -------- ------------------
Gross profit.................................. 104,366 115,343 110,121
Selling, administrative and engineering expenses.... 65,652 79,267 78,615
-------- -------- ------------------
Operating income.............................. 38,714 36,076 31,506
Interest expense.................................... 9,784 10,984 11,628
Other income, net................................... (1,736) (1,930) (2,074)
-------- -------- ------------------
Income before income taxes and minority
interest.................................... 30,666 27,022 21,952
Provision for income taxes.......................... 11,550 9,458 3,632
Minority interest................................... -- -- 1,367
-------- -------- ------------------
Net income.................................... $ 19,116 $ 17,564 $ 16,953
-------- -------- ------------------
-------- -------- ------------------
OTHER FINANCIAL DATA:
Depreciation and amortization....................... $ 26,246 $ 33,382 $ 39,679
Capital expenditures, net........................... 29,209 39,287 45,958
EBITDA (3).......................................... 64,960 69,458 71,185
Net cash provided by (used in):
Operating activities.......................... 69,849 40,477 76,002
Investing activities.......................... (78,974) (37,181) (43,925)
Financing activities.......................... 15,314 (7,559) (18,104)
Ratio of earnings to fixed charges (4).............. 3.7x 3.1x 2.7x
BALANCE SHEET DATA (AT END OF PERIOD):
Cash and short-term investments..................... $ 6,580 $ 2,317 $ 16,290
Working capital..................................... 114,140 116,550 118,796
Total assets........................................ 443,234 457,797 594,384
Total debt.......................................... 133,006 108,615 167,035
Shareholders' equity................................ 150,725 185,315 194,258
</TABLE>
- ------------------------------
(1) On April 3, 1996, Excel acquired Anderson Industries, Inc. ("Anderson"),
whose primary asset was Atwood Industries, Inc. ("Atwood"). The results of
operations of Atwood have been included in the consolidated financial
statements of Excel from April 3, 1996.
(2) The results of operations of Schade have been included in the consolidated
financial statements of Excel since July 1, 1998.
(3) "EBITDA" is operating income plus depreciation and amortization. EBITDA does
not represent and should not be considered as an alternative to net income
or cash flow from operations as determined by generally accepted accounting
principles, and our calculation thereof may not be comparable to that
reported by other companies. We believe that it is widely accepted that
EBITDA provides useful information regarding a company's ability to service
and/or incur indebtedness. EBITDA does not take into account a company's
working capital requirements, debt service requirements and other
commitments and, accordingly, is not necessarily indicative of amounts that
may be available for discretionary use.
(4) In calculating the ratio of earnings to fixed charges, earnings consist of
income before income taxes plus fixed charges. Fixed charges consist of
interest expense (which includes amortization of deferred financing costs
and debt issuance costs) and one-third of rental expense, deemed
representative of that portion of rental expense estimated to be
attributable to interest.
43
<PAGE>
ADWEST
The following table sets forth selected consolidated financial data with
respect to Adwest for each of the periods indicated. The selected historical
financial data for Adwest for the fiscal years ended June 30, 1997 and 1998, set
forth in U.K. GAAP in Pounds, have been derived from Adwest's consolidated
financial statements, which have been audited by KPMG Audit Plc, independent
public accountants. The data as of and for the six months ended December 31,
1997 and 1998, set forth in U.K. GAAP in Pounds, have been derived from Adwest's
unaudited consolidated financial statements which, in the opinion of Adwest's
management, contain all adjustments, consisting of normal recurring adjustments,
necessary for a fair presentation of the financial condition and results of
operations for these periods. The results of operations for the six months ended
December 31, 1998 are not necessarily indicative of the results that may be
expected for the entire fiscal year. The consolidated financial statements of
Adwest for the periods presented have been prepared in accordance with U.K.
GAAP, which differs in certain significant respects from U.S. GAAP. See Note 31
to the Consolidated Financial Statements of Adwest and Note 5 to the Unaudited
Interim Consolidated Financial Statements of Adwest included elsewhere herein.
The selected financial data for the fiscal years ended June 30, 1997 and 1998,
and the six months ended December 31, 1998, set forth in U.S. GAAP in Dollars,
has been derived from the audited and unaudited consolidated financial
statements of Adwest and adjusted for differences between U.K. GAAP and U.S.
GAAP. The selected historical consolidated financial data should be read in
conjunction with "Management's Discussion and Analysis of Results of Operations
and Financial Condition" and the consolidated financial statements and notes
thereto all included elsewhere herein.
ADWEST AUTOMOTIVE PLC
<TABLE>
<CAPTION>
U.K. GAAP IN POUNDS
------------------------------------------------
FISCAL YEAR ENDED JUNE
SIX MONTHS ENDED
30, DECEMBER 31,
---------------------- ------------------------
1998 (1) 1997 (1)
1997 (1) (2) (2) 1998 (2)
--------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
(UNAUDITED) (UNAUDITED)
<CAPTION>
(POUNDS IN THOUSANDS)
<S> <C> <C> <C> <C>
STATEMENT OF PROFIT AND LOSS DATA:
TURNOVER...................................................... L191,412 L249,853 L112,190 L118,155
Net operating costs........................................... 173,399 228,495 102,736 109,829
--------- ----------- ----------- -----------
OPERATING PROFIT.............................................. 18,013 21,358 9,454 8,326
Associated undertakings....................................... 21 21 -- --
Net interest.................................................. (2,892) (5,199) (2,196) (2,924)
Loss on disposal of businesses................................ (791) (13,501) -- --
--------- ----------- ----------- -----------
PROFIT ON ORDINARY ACTIVITIES BEFORE TAX...................... 14,351 2,679 7,258 5,402
Taxation on ordinary activities............................... 4,527 4,529 2,249 1,536
--------- ----------- ----------- -----------
(LOSS)/PROFIT FOR THE FINANCIAL YEAR AFTER TAX................ 9,824 (1,850) 5,009 3,866
Minority interests............................................ 400 505 246 133
--------- ----------- ----------- -----------
(LOSS)/PROFIT FOR THE FINANCIAL YEAR.......................... 9,424 (2,355) 4,763 3,733
Dividends..................................................... 6,428 6,442 1,897 --
--------- ----------- ----------- -----------
RETAINED (LOSS)/PROFIT FOR THE FINANCIAL YEAR................. L2,996 L(8,797) L2,866 L3,733
--------- ----------- ----------- -----------
--------- ----------- ----------- -----------
BALANCE SHEET DATA (AT END OF PERIOD):
Working capital............................................... L 34,876 L 11,758 L 13,482 L (2,289)
Total assets.................................................. 121,640 160,647 157,041 158,110
Borrowings due after more than one year....................... 38,767 61,093 66,680 53,724
Shareholders' funds--equity................................... 29,451 8,246 4,371 11,577
</TABLE>
44
<PAGE>
<TABLE>
<CAPTION>
U.S. GAAP IN DOLLARS (3)(4)
--------------------------------------------------
FISCAL YEAR ENDED JUNE SIX MONTHS ENDED
30, DECEMBER 31,
------------------------ ------------------------
1997 (1) 1998 (1)(2) 1997 (1)(2) 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
<CAPTION>
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues.................................................... $ 242,765 $ 365,814 $ 163,020 $ 196,456
Cost of sales............................................... 202,876 313,450 137,681 170,792
----------- ----------- ----------- -----------
Gross profit.............................................. 39,889 52,364 25,339 25,664
Selling, general and administrative expenses................ 14,543 23,084 13,168 14,058
Amortization expense........................................ 1,704 2,267 853 1,510
----------- ----------- ----------- -----------
Operating income.......................................... 23,642 27,013 11,318 10,096
Interest expense............................................ 4,654 8,560 3,609 4,860
----------- ----------- ----------- -----------
Income from continuing operations before provision for
income taxes and minority interest...................... 18,988 18,453 7,709 5,236
Provision for income taxes.................................. 6,370 6,182 2,829 2,779
Minority interest........................................... 651 831 408 208
----------- ----------- ----------- -----------
Net income from continuing operations..................... $ 11,967 $ 11,440 $ 4,472 $ 2,249
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
OTHER FINANCIAL DATA:
Depreciation and amortization............................... $ 13,939 $ 16,515 $ 7,671 $ 9,625
Capital expenditures, net................................... 9,521 27,556 12,479 13,263
EBITDA from continuing operations(5)........................ 37,581 43,528 18,989 19,721
Net cash provided by (used in):
Operating activities...................................... 29,978 25,730 21,044 7,263
Investing activities...................................... 9,397 (49,278) (65,221) (8,488)
Financing activities...................................... (23,367) 17,253 28,334 (15,639)
Ratio of earnings to fixed charges.......................... 5.1x 1.3x 3.6x 1.8x
BALANCE SHEET DATA (AT END OF PERIOD):
Working capital............................................. $ 47,079 $ 11,976 $ 12,545 $ (22,446)
Total assets................................................ 291,014 374,066 398,869 376,476
Long-term debt (less current portion)....................... 63,764 100,858 110,735 89,773
Shareholders' equity........................................ 137,288 122,316 139,192 121,721
</TABLE>
- ------------------------------
(1) In May 1998 Adwest disposed of its U.S. electronics division for $38.0
million. Adwest realized a pre-tax loss of approximately $9.7 million
related to the sale. The results of operations of the electronics division
have been included in the consolidated financial statements of Adwest
through the date of divestiture.
During the year ended June 30, 1997, Adwest finalized the disposal of the
U.K. power systems division and property portfolio. The loss from the
disposal of these entities was $1.3 million for the year ended June 30,
1997. The results of operations of these entities have been included in the
consolidated financial statements of Adwest through the dates of
divestiture.
(2) On September 11, 1997, Adwest acquired Heidemann Verwaltungs GmbH
("Heidemann") and its subsidiary undertakings for DM132.0 million. The
results of operations of Heidemann have been included in the consolidated
financial statements of Adwest from September 11, 1997.
45
<PAGE>
(3) The Adwest historical financial statements were prepared in accordance with
U.K. GAAP, which differs in certain significant respects from U.S. GAAP. The
following table reconciles the Adwest profit/loss as reported under U.K.
GAAP to net income as stated under U.S. GAAP:
<TABLE>
<CAPTION>
FISCAL YEAR ENDED SIX MONTHS ENDED
JUNE 30, DECEMBER 31,
-------------------- --------------------
1997 1998 1997 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
(Loss)/profit attributable to shareholders as reported
under U.K. GAAP....................................... L 9,424 L(2,355) L4,763 L3,733
Converted to U.S. Dollars............................... $ 15,167 $ (3,877) $ 7,827 $ 6,207
U.S. GAAP adjustments (in U.S. Dollars):
Goodwill amortization................................. (2,361) (2,267) (853) (1,510)
Impact of goodwill previously amortized on sale of
subsidiary.......................................... -- 4,783 -- --
Cumulative exchange loss on sale of foreign
subsidiaries........................................ -- (1,946) -- --
Pension costs......................................... 533 26 15 (414)
Deferred taxation--full provision..................... (270) (235) (150) (219)
Tax effect of U.S. GAAP reconciling items............. (428) (49) (10) 90
Fixed asset revaluations.............................. 818 165 82 83
Deferred profit on sale of property................... 488 499 250 253
Pre-production costs.................................. -- (1,976) (629) (2,097)
Other................................................. (26) 34 (13) (60)
Minority interests.................................... (8) -- (3) 12
Reverse prior year adjustment......................... -- -- -- (978)
--------- --------- --------- ---------
Net (loss)/income under U.S. GAAP....................... $ 13,913 $ (4,843) $ 6,516 $ 1,367
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
(4) Operating results and balance sheet data of Adwest have been translated from
Pounds to Dollars using the following ratios:
<TABLE>
<CAPTION>
FISCAL YEAR SIX MONTHS
ENDED JUNE 30, ENDED DECEMBER 31,
-------------------- --------------------
1997 1998 1997 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Operating results.................................. 1.6094 1.6464 1.6433 1.6627
Balance sheet...................................... 1.6448 1.6509 1.6607 1.6710
</TABLE>
(5) "EBITDA" is operating income plus depreciation and amortization. EBITDA does
not represent and should not be considered as an alternative to net income
or cash flow from operations as determined by generally accepted accounting
principles, and our calculation thereof may not be comparable to that
reported by other companies. We believe that it is widely accepted that
EBITDA provides useful information regarding a company's ability to service
and/or incur indebtedness. EBITDA does not take into account Adwest's
working capital requirements, debt service requirements and other
commitments and, accordingly, is not necessarily indicative of amounts that
may be available for discretionary use.
46
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
GENERAL
We ordinarily begin working on products awarded for new or redesigned models
two to five years prior to the marketing of such models to the public. During
such period, we incur (1) costs related to the design and engineering of such
products, (2) costs related to the production of the tools and dies used to
manufacture the new product and (3) start-up costs associated with the initial
production of such product. In general, design and engineering costs are
expensed in the period incurred unless they are reimbursed by the customer, in
which case they are capitalized and amortized over the life of such product as
they are recovered from the customer. Costs incurred in the production of the
tools and dies are generally capitalized and reimbursed by the customer prior to
production. Start-up costs, which are generally incurred 30 to 60 days
immediately prior to and immediately after initial production, are expensed as
incurred.
RESULTS OF OPERATIONS
DURA
The following table sets forth the percentage relationship of certain items
to revenues for Dura for the periods indicated:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
------------------------------- --------------------
<S> <C> <C> <C> <C> <C>
1996 1997 1998 1998 1999
--------- --------- --------- --------- ---------
Revenues......................................................... 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of sales.................................................... 84.7 83.5 82.3 83.1 82.4
--------- --------- --------- --------- ---------
Gross profit................................................. 15.3 16.5 17.7 16.9 17.6
Selling, general and administrative expenses..................... 7.0 7.3 6.7 7.3 6.4
Amortization expense............................................. 0.4 0.8 1.3 1.0 1.4
--------- --------- --------- --------- ---------
Operating income............................................. 7.9 8.4 9.7 8.6 9.8
Interest expense, net............................................ 1.1 2.1 2.7 2.3 2.6
--------- --------- --------- --------- ---------
Income before provision for income taxes, equity in losses of
affiliates and minority interest........................... 6.8 6.3 7.0 6.3 7.2
Provision for income taxes....................................... 2.7 2.6 2.9 2.6 2.9
Equity in losses of affiliates, net.............................. -- -- 0.2 -- 0.5
Minority interest-dividends on Trust Preferred Securities, net... -- -- 0.3 0.1 0.3
--------- --------- --------- --------- ---------
Income before extraordinary item and accounting change....... 4.1% 3.7% 3.6% 3.6% 3.5%
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
</TABLE>
COMPARISON OF THE THREE MONTHS ENDED MARCH 31, 1999 TO THE THREE MONTHS
ENDED MARCH 31, 1998
REVENUES. Revenues of $264.7 million for the three months ended March 31,
1999 increased substantially over $125.7 million for the three months ended
March 31, 1998. The increase in revenues is primarily the result of the
acquisitions of Universal in March 1998, Trident in April 1998, the Hinge
Business in September 1998, Excel in March 1999 and Adwest in March 1999.
COST OF SALES. Cost of sales for the three months ended March 31, 1999
increased by $113.7 million to $218.2 million from $104.5 million for the three
months ended March 31, 1998. Cost of sales as a percentage of revenues for the
three months ended March 31, 1999 was 82.4% compared
47
<PAGE>
to 83.1% for the three months ended March 31, 1998. The corresponding
improvement in gross margins is primarily the result of lower costs of purchased
materials and higher margins from efficiency improvements and plant
rationalizations in acquired operations.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses were $16.9 million for the three months ended March 31,
1999 compared to $9.2 million for the three months ended March 31, 1998. The
increase was due primarily to incremental costs from the acquisitions discussed
above. As a percentage of revenues, selling, general and administrative expenses
were 6.4% for the three months ended March 31, 1999 compared to 7.3% for the
three months ended March 31, 1998.
INTEREST EXPENSE. Interest expense for the three months ended March 31,
1999 was $6.9 million compared to $2.9 million for the three months ended March
31, 1998. The increase was due principally to borrowings incurred related to the
acquisitions discussed above.
INCOME TAXES. The effective income tax rate was 40.6% for the three months
ended March 31, 1999 and 41.3% for the three months ended March 31, 1998. The
effective rates differed from the statutory rates as a result of higher foreign
tax rates and the effects of state taxes and non-deductible goodwill
amortization.
COMPARISON OF YEAR ENDED DECEMBER 31, 1998 TO YEAR ENDED DECEMBER 31, 1997
REVENUES. Revenues for the year ended December 31, 1998 increased by $290.4
million, or 64.7%, to $739.5 million from $449.1 million for 1997. The increase
in revenues relates primarily to the acquisitions of GT Automotive in August
1997, REOM Industries in December 1997, Universal in March 1998, Trident in
April 1998 and the Hinge Business in September 1998. These increases were
partially offset by the effects of a strike at GM. We estimate the strike at GM
decreased our revenues by approximately $16.7 million for the year ended
December 31, 1998.
COST OF SALES. Cost of sales for the year ended December 31, 1998 increased
by $233.4 million, or 62.2%, to $608.5 million from $375.1 million for 1997.
Cost of sales as a percentage of revenues for the year ended December 31, 1998
was 82.3% compared to 83.5% for 1997. The corresponding improvement in gross
margin is primarily the result of lower costs of purchased materials and higher
margins from efficiency improvements and plant rationalizations in acquired
operations.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased by $17.0 million, or 51.8%, to $49.8 million
for the year ended December 31, 1998 from $32.8 million for 1997. The increase
is due primarily to incremental costs from the acquisitions discussed above. As
a percentage of revenues, selling, general and administrative expenses were 6.7%
for 1998 compared to 7.3% for 1997.
AMORTIZATION EXPENSE. Amortization expense increased from $3.6 million for
the year ended December 31, 1997 to $9.9 million for 1998. The increase is the
result of goodwill amortization arising from the acquisitions discussed above.
INTEREST EXPENSE. Interest expense for the year ended December 31, 1998 was
$20.3 million compared to $9.3 million for 1997. The increase was due
principally to borrowings incurred related to the acquisitions discussed above.
INCOME TAXES. The effective income tax rate was 41.1% for 1998 compared to
41.2% for 1997. The effective rates differed from the statutory rates primarily
as a result of higher foreign tax rates, state taxes and non-deductible goodwill
amortization.
EQUITY IN LOSSES OF AFFILIATE. In January 1998, Dura and Excel, then its
joint venture partner, exercised an option to increase their joint venture's
ownership interest in Pollone to 51%, and as of
48
<PAGE>
such date, began consolidating the results of Pollone into the results of their
joint venture. Equity in losses of affiliate for the year ended December 31,
1998 represents Dura's share of the loss of the joint venture's operations in
1998.
MINORITY INTEREST. Minority interest for the year ended December 31, 1998
represents dividends, net of income tax benefits, on the Trust Preferred
Securities which were issued by the Dura Trust on March 20, 1998.
EXTRAORDINARY ITEM. The extraordinary loss for the year ended December 31,
1998 represents the write-off, net of income taxes, of deferred financing costs
related to former credit facilities.
COMPARISON OF YEAR ENDED DECEMBER 31, 1997 TO YEAR ENDED DECEMBER 31, 1996
REVENUES. Revenues for 1997 increased by $203.8 million, or 83.1%, to
$449.1 million from $245.3 million for 1996. Approximately $179.0 million of the
increase relates to the acquisitions of KPI in December 1996, VOFA in January
1997 and GT Automotive in August 1997. The remaining increase is due to
increased production on models served by Dura and new program awards.
COST OF SALES. Cost of sales for 1997 increased by $167.3 million, or
80.5%, to $375.1 million from $207.8 million for 1996. As a percentage of
revenues, cost of sales decreased to 83.5% for 1997 from 84.7% for 1996,
resulting in an improved gross margin of 16.5% from 15.3% in the preceding year.
The higher gross margin is a result of continued cost reduction efforts,
including manufacturing process improvements such as cellular manufacturing,
mistake proofing, improved capacity utilization through rationalization and
consolidation of facilities and the effects of material cost reductions achieved
through the centralization of purchasing efforts and the resulting greater
purchasing power.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased by $15.7 million, or 91.3%, to $32.8 million
for 1997 from $17.2 million for 1996. This increase is due to incremental costs
from the acquisitions of KPI, VOFA and GT Automotive, engineering costs related
to new business and costs associated with the greater involvement in the design,
engineering and prototyping of systems for customers. As a percentage of
revenues, selling, general and administrative expenses were 7.3% for 1997
compared to 7.0% for 1996.
INTEREST EXPENSE. Interest expense for 1997 increased by $6.7 million to
$9.3 million from $2.6 million for 1996. The increase was due principally to
borrowings incurred related to the acquisitions of KPI, VOFA and GT Automotive.
INCOME TAXES. The effective income tax rate for 1997 was 41.2% for 1997
compared to 39.5% for 1996. The effective rates differed from the statutory
rates primarily as a result of an increased proportion of Dura's earnings being
derived in higher tax rate jurisdictions, such as Germany and Canada, state
taxes and an increase in non-deductible goodwill amortization.
EXCEL
Excel was founded in 1928 and became a public company in April 1984.
Effective July 1, 1998, Excel acquired 70% of Schade. Schade has sales and
manufacturing operations in the Czech Republic, Germany, Portugal, Spain and the
U.K. Schade and its affiliated companies are engaged in the manufacture and
distribution of modular windows, decorative trims, body components and injection
molded plastic components for the automotive industry. In April 1996, Excel
acquired all of the outstanding common shares of Anderson, located in Rockford,
Illinois. Anderson is a holding company whose main asset is Atwood. Atwood
manufactures seating systems, including seat and height adjusters, recliner
mechanisms, transmission selectors and hood and deck hinges, all for the
automotive industry. In addition, Atwood produces appliances such as water
heaters, furnaces, stoves and ranges, hardware, such as jacks, couplers and
surge brake actuators, seating frames, seat adjusters and recliner
49
<PAGE>
mechanisms for the recreational vehicle industry, and window systems and door
systems for the mass transit and heavy truck industries. The comparability of
Excel's results on a period-to-period basis is significantly affected by these
acquisitions.
Historically, Excel's operating units were aggregated into two segments for
financial reporting purposes: (1) light vehicle products, which included plastic
and metal framed window and door assemblies, manual and power window regulator
systems, manual seating systems, decorative trims and injection molded plastic
parts and (2) RV/MT/HT products, which included appliances (water heaters,
furnaces, stoves and ranges), jacks, couplers, seating frames and seat
adjusters, preassembled doors and windows for motor homes and window assemblies
for mass transit systems and heavy trucks.
The following table sets forth the percentage relationship of certain items
to revenues for Excel for the periods indicated:
<TABLE>
<CAPTION>
YEAR ENDED,
---------------------------------------------
<S> <C> <C> <C>
DECEMBER 28, DECEMBER 27, JANUARY 2,
1996 1997 1999
--------------- --------------- -----------
Net sales................................................................ 100.0% 100.0% 100.0%
Cost of good sold........................................................ 88.2 88.0 90.0
----- ----- -----
Gross profit....................................................... 11.8 12.0 10.0
Selling, administrative and engineering expenses......................... 7.4 8.2 7.1
----- ----- -----
Operating income................................................... 4.4 3.8 2.9
Interest expense......................................................... 1.1 1.1 1.1
Other income, net........................................................ (0.2) (0.2) (0.2)
----- ----- -----
Income before income taxes and minority interest................... 3.5 2.8 2.0
Provision for income taxes............................................... 1.3 1.0 0.3
Minority interest........................................................ -- -- 0.1
----- ----- -----
Net income......................................................... 2.2% 1.8% 1.5%
----- ----- -----
----- ----- -----
</TABLE>
COMPARISON OF YEAR ENDED JANUARY 2, 1999 TO YEAR ENDED DECEMBER 27, 1997
Sales for the year ended January 2, 1999 totaled $1,106 million, an increase
of $144.0 million or 15% from 1997. The light vehicle products segment accounted
for $126.0 million of the increase, with RV/MT/HT making up the difference.
Sales in the light vehicle products segment totaled $885.0 million as compared
to $759.6 million in 1997. The acquisition of Schade added $165.0 million in
sales in the second half of 1998, while sales in North America declined $39.0
million. The decline in North America light vehicle product sales results from
programs that were discontinued or canceled amounting to approximately $76.6
million offset by sales of new programs of $59.2 million, with the remainder of
the sales decline due to a decline in passenger car production.
Sales of the RV/MT/HT products segment increased $18.0 million, as the
recreational vehicle industry production volumes were up approximately 15% and
mass transit production was also strong.
Gross profit totaled $110.1 million or 10% of sales, which compares with
$115.3 million or 12% of sales in 1997. This decrease in gross profit of $5
million and in profit percentage results from losses incurred in the seating
systems area amounting to approximately $18.0 million arising from excessive
launch costs, tooling costs, pricing and other issues. In addition, a reserve to
cover estimated losses on long-term production contracts was established in the
fourth quarter in the amount of $4.5 million. Gross profit of 19% in 1998 in the
RV/MT/HT products segment was identical with that in 1997.
Selling, administrative and engineering expenses totaled $78.6 million or
7.1% of sales for 1998, down from $79.3 million or 8.2% of sales in 1997.
Excluding Schade's expenses of approximately
50
<PAGE>
$8.8 million in 1998, total expenses would have been lower by $9.5 million.
Approximately $5.5 million of the decrease was due to a reduction in product
development expenses, $2.3 million was due to the administrative costs of the
North American facilities closed in late 1997, $1.2 million was due to costs
associated with the closure of the Italian operation recorded in 1997, and
$500,000 results from a reduction in compensation.
Other income, net, consists primarily of interest income of $2.0 million and
royalty income of $.7 million, less losses on a Brazilian joint venture of $1.5
million in 1998, which compares to interest income of $2.0 million in 1997.
Interest costs of $11.6 million for 1998 increased slightly from $11.0
million in 1997, as the interest on Schade's bank loans were partially offset by
the elimination of interest on convertible subordinated notes that were
converted into common shares of Excel in 1997.
Provision for taxes on income in 1998 includes the benefit of tax credits
related to prior years. In 1998, Excel completed a review of qualified research
and development expenditures for the years 1994 to 1997 and recorded tax credits
totaling $4.0 million. The effective rate for U.S. taxes was lowered to 16.5%
for 1998, down from 35.0% in 1997 due to the current year's effect of these
credits.
COMPARISON OF YEAR ENDED DECEMBER 27, 1997 TO YEAR ENDED DECEMBER 28, 1996
Sales for the year ended December 27, 1997 totaled $962.3 million, up $74.6
million or 8% from the preceding year. The Anderson acquisition added $98.2
million in sales in the first quarter of 1997. This increase was offset by
reductions in parts shipped for passenger cars and selling price reductions on
products under long-term pricing agreements. Specifically, passenger car
production in 1997 for Excel's largest customer, Ford, was 10% lower than the
previous year. Also, discontinued programs such as Aerostar, Thunderbird and
Cougar adversely affected sales by $10.7 million. These items, including the
Anderson acquisition, accounted for the change in sales for 1997 to $759.6
million for the light vehicle segment from $730.3 million in 1996. Sales for
1997 for the RV/MT/HT segment were $202.8 million, up from $157.5 million in
1996, due primarily to the Anderson acquisition.
Gross profit totaled $115.3 million, or 12.0% of sales, as compared with
$104.4 million, or 11.8% of sales for the prior year. The increase was due to
the addition of the Anderson locations offsetting approximately $4.1 million in
start-up costs on new programs and approximately $4.7 million in costs
associated with the closure of two domestic plants. Gross profit for 1997 was
$76.8 million or 10.1% of sales for the light vehicle segment compared to $73.8
million or 10.1% of sales in 1996. Gross profit for the RV/MT/HT segment was
$38.5 million or 19.0% of sales in 1997 compared to $30.5 million or 19.4% of
sales in 1996.
Selling, administrative and engineering expenses totaled $79.3 million or
8.2% of sales for 1997, up from $65.7 million or 7.4% of sales in 1996. The
increase was due to the addition of Anderson locations, increases in product
development expenses and $1.2 million in costs associated with the closure of
the Italian operation.
Interest costs of $11.0 million for 1997 increased from $9.8 million in 1996
due to the senior notes issued in connection with the Anderson acquisition in
1996. Interest income of $2.0 million in 1997, recorded in other income, was up
slightly from $1.8 million in 1996.
The income tax provision was 35% of pre-tax income in 1997, down from 37.7%
in the preceding year. The decrease was due to lower estimated state income
taxes and favorable benefits of Excel's foreign sales corporation.
ADWEST
The following discussion is based upon the Consolidated Financial Statements
of Adwest included in this prospectus, which have been prepared in conformity
with U.K. GAAP which differs in certain
51
<PAGE>
significant respects from U.S. GAAP. The significant differences between U.S.
GAAP and U.K. GAAP as they relate to Adwest are summarized in Note 31 to the
Consolidated Financial Statements of Adwest.
The following table sets forth the percentage relationship of certain items
to turnover for Adwest for the periods indicated:
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
-------------------------------
<S> <C> <C> <C>
1996 1997 1998
--------- --------- ---------
Turnover.............................................................................. 100.0% 100.0% 100.0%
Net operating costs................................................................... 93.3 90.6 91.5
Operating profit...................................................................... 6.7 9.4 8.5
Exceptional items..................................................................... (2.2) -- --
Associated undertakings............................................................... -- -- --
Net interest.......................................................................... (1.7) (1.5) (2.1)
--------- --------- ---------
Loss on disposal of business.......................................................... (13.1) (.4) (5.4)
(Loss)/profit on ordinary activities before tax....................................... (10.3) 7.5 1.0
Tax on profit on ordinary activities.................................................. 0.9 2.4 1.8
--------- --------- ---------
(Loss)/profit for financial year...................................................... (11.2) 5.1 (0.8)
Minority interests.................................................................... 0.1 0.2 0.2
--------- --------- ---------
Retained (loss)/profit for financial year............................................. (11.3)% 4.9% (1.0)%
--------- --------- ---------
--------- --------- ---------
</TABLE>
COMPARISON OF YEAR ENDED JUNE 30, 1998 WITH YEAR ENDED JUNE 30, 1997
TURNOVER--Total group turnover for the year ended June 30, 1998 increased by
L58.4 million or 30.5% to L249.9 million from L191.4 million for the year ended
June 30, 1997. These results include the U.S. electronics division for all of
fiscal 1997 and the first ten months of fiscal 1998. Total turnover from the
automotive division (continuing operations) for the year ended June 30, 1998
increased by L71.3 million, or 47.3%, to L222.2 million from L150.8 million for
the year ended June 30, 1997. The increase in turnover is primarily the result
of the acquisition of Heidemann in September 1997.
OPERATING COSTS--Total group operating costs for the year ended June 30,
1998 increased by L55.1 million or 31.8% to L228.5 million from L173.4 million
for the year ended June 30, 1997. Operating costs from continuing operations for
the year ended June 30, 1998 increased by L67.4 million, or 49.5%, to L203.7
million from L136.2 million for the year ended June 30, 1997. Operating costs
from continuing operations, as a percentage of turnover from continuing
operations was 91.7% for the year ended June 30, 1998 compared to 90.3% for the
year ended June 30, 1997. The decline in gross margins is due to the short-term
reversal of profits in U.S. operations and relatively lower margins at some of
the newly acquired Heidemann facilities.
Selling, general and administrative expenses are included as a component of
operating costs in accordance with U.K. accounting requirements. Selling,
general and administrative expenses from continuing operations increased by L4.7
million to L14.4 million for the year ended June 30, 1998 from L9.7 million for
the year ended June 30, 1997. This increase is due primarily to incremental
costs related to the acquisition of Heidemann. As a percent of revenues,
selling, general and administrative expenses from continuing operations were
6.5% for the year ended June 30, 1998 and 6.4% for the year ended June 30, 1997.
INTEREST EXPENSE--Interest expense for the year ended June 30, 1998 was L5.2
million compared to L2.9 million for the year ended June 30, 1997. The increase
was due principally to borrowings incurred related to the acquisition of
Heidemann.
52
<PAGE>
INCOME TAXES--The effective income tax rate was 28.0% for the year ended
June 30, 1998 and 31.5% for the year ended June 30, 1997. The reduction in the
effective income tax rate is primarily related to offsetting the impact of high
tax rates in France and Germany with structuring the Heidemann acquisition and
low effective tax rates in Spain and the U.S.
DISCONTINUED OPERATIONS--The loss from discontinued operations for the year
ended June 30, 1998 was L13.5 million and L791,000 for the year ended June 30,
1997. During fiscal 1998, Adwest disposed of three business units. In May 1998,
Adwest announced the disposal of their U.S. electronics division for $38.0
million. Of that amount, $3.0 million has been retained in an escrow account,
with $1.0 million to be released annually upon expiration of certain warranties
and indemnities. In accordance with U.K. accounting requirements, the original
goodwill on the acquisition of these businesses totaling L17.6 million has been
included in discontinued operations in the consolidated profit and loss account
for the year ended June 30, 1998. In addition, Adwest disposed of the Heidemann
galvanizing business for DM6.3 million in aggregate consideration and the last
significant investment portfolio property for L900,000 in aggregate
consideration. The loss in fiscal 1998 is net of a gain on the disposal of these
divisions of L4.1 million offset by the write-off of the original goodwill of
L17.6 million in accordance with U.K. accounting requirements.
COMPARISON OF YEAR ENDED JUNE 30, 1997 WITH YEAR ENDED JUNE 30, 1996
TURNOVER--Total group turnover for the year ended June 30, 1997 decreased by
L32.2 million or 14.4% to L191.4 million from L223.7 million for the year ended
June 30, 1996. These results include the U.K. power systems division and the
property portfolio, which were substantially disposed of during 1996. Total
turnover from the automotive division (continuing operations) for the year ended
June 30, 1997 increased by L23.5 million, or 18.5%, to L150.8 million from
L127.3 million for the year ended June 30, 1996. The increase in turnover is
primarily the result of the acquisition of Adwest Rearsby in June of fiscal 1996
offset by an L8.2 million reduction in turnover at overseas entities caused by
the movement in average exchange rates between the two years.
OPERATING COSTS--Total group operating costs for the year ended June 30,
1997 decreased by L35.3 million or 16.9% to L173.4 million from L208.7 million
for the year ended June 30, 1996. Operating costs from continuing operations for
the year ended June 30, 1997 increased by L19.5 million, or 16.7%, to L136.2
million from L116.7 million for the year ended June 30, 1996. Operating costs
from continuing operations, as a percentage of turnover from continuing
operations was 90.3% for the year ended June 30, 1997 compared to 91.6% for the
year ended June 30, 1996. The increase in gross margins is primarily due to cost
reductions from improved design and technology within the automotive division.
Selling, general and administrative expenses are included as a component of
operating costs in accordance with U.K. accounting requirements. Selling,
general and administrative expenses from continuing operations increased by L2.5
million to L9.7 million for the year ended June 30, 1997 from L7.2 million for
the year ended June 30, 1996. This increase is due primarily to incremental
costs related to the acquisition of Rearsby. As a percent of revenues selling,
general and administrative expenses were 6.4% for the year ended June 30, 1997
and 5.7% for the year ended June 30, 1996.
EXCEPTIONAL ITEMS--During fiscal 1996, Adwest recorded a charge of L5.0
million related to a reorganization of the automotive division and redundancy
and disruption costs within the electronics division following cancellation of a
customer order.
INTEREST EXPENSE--Interest expense for the year ended June 30, 1997 was L2.9
million compared to L3.9 million for the year ended June 30, 1996. The decrease
was due principally to retirement of debt from increased operating cash flows
and the proceeds of the disposal of the U.K. power systems divisions and the
property portfolio.
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INCOME TAXES--The effective income tax rate was 31.5% for the year ended
June 30, 1997 and 33.2% for the year ended June 30, 1996. The reduction in the
effective income tax rate is primarily related to a reduction in the U.K.
corporate tax rate partially offset by the impact of a temporary increase in
corporate tax rates in France.
DISCONTINUED OPERATIONS--The loss from discontinued operations for the year
ended June 30, 1997 was L791,000 compared to a loss of L29.3 million for the
year ended June 30, 1996. The loss in fiscal 1997 represents loss from the
finalization of the disposal of the U.K. power systems entities and the property
portfolio. During fiscal 1996, Adwest disposed of its U.K. power systems
division and property portfolio. The loss on disposal of these divisions was
L9.1 million before goodwill. The write off of the original goodwill of L20.2
million in accordance with U.K. accounting requirements increased the overall
loss to L29.3 million.
LIQUIDITY AND CAPITAL RESOURCES
DURA
In connection with the Acquisitions, the Issuer and certain of its direct
and indirect subsidiaries entered into the new credit facility. The new credit
facility provides for borrowings aggregating up to approximately $1,150 million,
including (1) a $275.0 million tranche A term loan; (2) a $275.0 million tranche
B term loan; (3) a $400.0 million revolving credit facility; and (4) a $200.0
million interim term loan facility. As of March 31, 1999, there was
approximately $825.0 million of outstanding indebtedness under the new credit
facility and approximately $250.0 million of available borrowings under the
revolving credit facility for working capital and other corporate purposes. The
Issuer used approximately $300.1 million of the net proceeds of the initial
offering to repay a portion of its indebtedness under the new credit facility.
As of March 31, 1999, rates on borrowings under the new credit facility
ranged from 5.28% to 10.00%. Borrowings under the tranche A term loan are due
and payable in March 2005 and borrowings under the tranche B term loan are due
and payable in March 2006. The revolving credit facility is available until
March 2005. The new credit facility is secured by all of the assets of DASI, the
Issuer and certain of their material subsidiaries and is guaranteed by DASI and
all of the Issuer's material subsidiaries, in each case with exceptions for
certain foreign subsidiaries.
We financed the Acquisitions primarily through borrowings under the new
credit facility and the issuance of Class A common stock. The following table
summarizes our sources and uses of funds for the Acquisitions (in millions):
<TABLE>
<CAPTION>
SOURCES OF FUNDS: AMOUNT
- -------------------------------------------- ---------
<S> <C>
New credit facility......................... $ 828.1
Issuance of Class A common stock(1)......... 170.7
Cash on hand................................ 49.8
---------
Total....................................... $ 1,048.6
---------
---------
<CAPTION>
USES OF FUNDS: AMOUNT
- -------------------------------------------- ---------
<S> <C>
Purchase of Excel's equity.................. $ 334.6
Purchase of Adwest's equity................. 207.2
Refinance Excel's existing debt............. 100.0
Refinance Adwest's existing debt............ 106.1
Refinance Dura's existing debt.............. 250.7
Prepayment penalties, net................... 9.5
Fees and expenses........................... 40.5
---------
Total................................. $ 1,048.6
---------
---------
</TABLE>
- ------------------------
(1) Based on a per share price of $33 9/16, which was the closing price of the
Class A common stock on January 15, 1999, the date on which the Excel
Acquisition purchase agreement was signed.
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Following the Acquisitions, our principle source of liquidity will be cash
flow generated from operations and borrowings under our $400 million revolving
credit facility. We believe that such funds will be sufficient to meet our
liquidity needs for at least the next twelve months. Our principle use of
liquidity will be to meet debt service requirements, finance our capital
expenditures and to provide working capital availability. We expect that capital
expenditures in 1999 will be approximately $105.0 million. These capital
expenditures will be used primarily for equipment and dedicated tooling
purchases and facility improvements.
Our ability to service our indebtedness will depend on our future
performance, which will be affected by prevailing economic conditions and
financial, business, regulatory and other factors. Certain of these factors are
beyond our control. We believe that, based upon current levels of operations, we
will be able to meet our debt service obligations when due. Significant
assumptions underlie this belief, including, among other things, that we will
continue to be successful in implementing our business strategy and that there
will be no material adverse developments in our business, liquidity or capital
requirements. If we cannot generate sufficient cash flow from operations to
service our indebtedness and to meet our other obligations and commitments, we
might be required to refinance our debt or to dispose of assets to obtain funds
for such purpose. There is no assurance that refinancings or asset dispositions
could be effected on a timely basis or on satisfactory terms, if at all, or
would be permitted by the terms of the Indenture or the new credit facility. In
the event that we are unable to refinance the new credit facility or raise funds
through asset sales, sales of equity or otherwise, our ability to pay principal
of, and interest on, the notes would be impaired.
During the first quarter of 1999, we generated cash from operations of
$387,000, compared to a $2.1 million use of cash in 1998. Cash generated from
operations before changes in working capital items was $18.1 million for 1999
compared to $7.6 million for 1998. Increases in working capital used cash of
$17.7 million in 1999 compared to $9.8 million in 1998. The increases in working
capital is primarily the result of the timing of cash receipts and cash
payments.
During 1998, we generated cash from operations of $7.7 million, compared to
$8.5 million in 1997. Cash generated from operations before changes in working
capital items was $63.2 million for 1998 compared to $30.5 million for 1997.
Increases in working capital used cash of $55.5 million in 1998 compared to
$22.0 million in 1997. The increases in working capital are primarily the result
of the timing of cash receipts and cash payments.
Net cash used in investing activities was $543.9 million for the first
quarter of 1999 as compared to $22.3 million in 1998. Net capital expenditures
totaled $6.0 million for the first quarter of 1999 primarily for equipment and
dedicated tooling purchases related to new or replacement programs with an
additional $540.1 million used for the acquisitions of Adwest and Excel. This
compares with net capital expenditures of $3.7 million in 1998 and $18.6 million
spent on the acquisition of Universal.
Net cash used in investing activities was $167.5 million for 1998 as
compared to $93.4 million in 1997. Net capital expenditures totaled $31.8
million for 1998 primarily for equipment and dedicated tooling purchases related
to new or replacement programs with an additional $135.7 million used for the
acquisitions of Universal, Trident and the Hinge Business. This compares with
net capital expenditures of $16.2 million in 1997 and $70.5 million spent on the
acquisitions of VOFA, GT Automotive and REOM Industries.
Net cash provided by financing activities totaled $564.2 million for the
first quarter of 1999 compared with $67.3 million in 1998. Approximately $582.9
million of cash was provided through net borrowings.
Net cash provided by financing activities totaled $176.6 million for 1998
compared with $87.6 million in 1997. Approximately $16.1 million of cash was
provided through net borrowings. In
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addition, we received $52.5 million of net proceeds from the issuance of the
Trust Preferred Securities in March 1998 and $107.8 million of net proceeds from
the June 1998 Offering.
On March 20, 1998, the Dura Trust completed the offering of $55.3 million of
its Trust Preferred Securities, resulting in net proceeds of approximately $52.5
million. The Trust Preferred Securities are redeemable, in whole or part, on or
after March 31, 2001 and all Trust Preferred Securities must be redeemed no
later than March 31, 2028. The Trust Preferred Securities are convertible, at
the option of the holder, into Class A common stock at a rate of 0.5831 shares
of Class A common stock for each Trust Preferred Security, which is equivalent
to a conversion price of $42 7/8 per share. The net proceeds of the offering
were used to repay outstanding indebtedness. Dividends on the Trust Preferred
Securities, net of the related income tax benefit, are reflected as minority
interest in the condensed consolidated statement of operations.
On June 17, 1998, DASI completed a public offering of 3,100,000 shares of
Class A common stock at an offering price of $32.75 per share. Net proceeds to
Dura, after underwriting discounts and offering expenses, were approximately $95
million and were used to retire outstanding indebtedness. Certain stockholders
of Dura converted 1,308,000 shares of Class B common stock of Dura into Class A
common stock and sold such shares concurrent with the June 1998 Offering. In
addition, an employee of Dura exercised an option to acquire 5,000 shares of
Class A common stock at an exercise price of $14.50 per share, and sold such
shares concurrent with the June 1998 Offering. On July 1, 1998, the
underwriters, pursuant to their over-allotment option, purchased an additional
400,000 shares of Class A common stock, resulting in net proceeds of
approximately $12.4 million.
EXCEL--HISTORICAL
Effective July 1, 1998, Excel purchased through its wholly owned subsidiary,
Excel Industries Germany GmbH, a 70% interest in Schade. The aggregate purchase
price for Schade was DM 17,036,400, or approximately $9,689,000 plus transaction
costs. Excel also assumed approximately $68.0 million of Schade's debt. The
amount of Excel's contribution to the capital of Schade was DM 27,340,000, or
approximately $15,548,000. Funds for the purchase price for the interests and
the contribution came from Excel's cash on hand.
The remaining 30% of Schade is owned by Hella KG Hueck & Co., another
international OEM supplier. The acquisition of Schade was accounted for as a
purchase. The excess of the purchase price over the estimated fair value of net
assets acquired, approximately $4.0 million, has been accounted for as goodwill
and is being amortized over 40 years using the straight-line method.
Working capital totaled $119.0 million as of January 2, 1999, and the
current ratio was 1.6 to 1. Cash and marketable securities totaled $30.3 million
as of January 2, 1999, an increase of $3.6 million from the prior year.
In 1998, cash flow from operations totaled $76.0 million, compared to $40.5
million in 1997. The increase, after considering the effect of the Schade
acquisition, was due to reductions in accounts receivable and tooling billed to
customers. Dividends increased to $6.2 million from $5.6 million due to the
additional common shares issued for the conversion of Excel's 10% convertible
subordinated notes in October 1997.
Long-term debt of $149.9 million as of January 2, 1999, or 43% of total
capitalization, is up from $105.9 million at the beginning of the year due to
the inclusion of Schade's debt at January 2, 1999. New borrowings consisted of
bank loans to Schade. Excel acquired treasury shares during 1998 to be used for
the issuance of shares under Excel's stock compensation and incentive plans and
for the exercise of outstanding warrants.
Expenditures for capital equipment in 1998 were $46.0 million up from $39.3
million in 1997 and $29.2 million in 1996. The increase in 1998 was mainly due
to capital expenditures in Schade in the last
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half of 1998. Capital additions consisting mainly of machinery and equipment
totaled $40.8 million in the light vehicle segment and $4.8 million in the
RV/MT/HT segment. Capital expenditures for 1999 are budgeted at $50.0 million.
Starting in 1998, Excel changed the method of depreciating new capital
expenditures from accelerated methods to the straight-line method. The favorable
effect of the change on net income for the year ending January 2, 1999 was
approximately $1.1 million or $.09 per share.
There are claims and pending legal proceedings against Excel and its
subsidiaries with respect to taxes, workers' compensation, warranties and other
matters arising out of the ordinary conduct of the business. The ultimate
results of these claims and proceedings at January 2, 1999 is not determinable,
but, in the opinion of management, adequate provision for anticipated costs has
been made or insurance coverage exists to cover such costs.
ADWEST--HISTORICAL
During fiscal 1998, Adwest provided cash flow from operations of L26.4
million, compared to L25.2 million for the year ended June 30, 1997. Cash
generated from operations before changes in working capital items was L31.2
million in fiscal 1998 compared to L25.6 million for the year ended June 30,
1997. The increase in working capital items is primarily the result of new
program ramp-ups in a number of subsidiaries.
Net cash used for capital expenditure was L16.8 million in fiscal 1998
compared to L5.9 million in fiscal 1997. The increase in capital expenditure
during 1998 is related to plant expansion at Adwest Driver Systems and Adwest
Heidemann Einbeck and additional equipment and dedicated tooling purchases
related to new or replacement programs.
Net cash used for acquisitions and disposals was L11.4 million in fiscal
1998 compared to cash provided from acquisitions and disposals of L11.8 million
in fiscal 1997. The 1998 cash used for acquisitions can be summarized as follows
(in thousands):
<TABLE>
<CAPTION>
AMOUNT
-----------
<S> <C>
Heidemann acquisition............................................ L46.8
Disposal of U.S. Electronics..................................... (21.2)
-----------
Total...................................................... 25.6
Less Heidemann debt assumption................................... (14.2)
-----------
Total cash used for acquisitions........................... L11.4
-----------
-----------
</TABLE>
Net cash provided from financing activities was L10.2 million for the year
ended June 30, 1998 compared to cash used for financing activities of L10.0
million for the year ended June 30, 1997. During 1998, approximately L34.8
million of cash was provided through additional borrowings primarily related to
the acquisition and refinancing of Heidemann. This amount was partially offset
by debt repayments of L24.8 million. The net cash used for financing activities
for the year ended June 30, 1997 relates exclusively to debt repayments.
Adwest paid dividends of L6.4 million for each of the years ended June 30,
1998 and 1997.
Adwest acquired Heidemann and its subsidiary undertakings on September 11,
1997 for DM132.0 million of consideration including the assumption of DM40.0
million of Heidemann indebtedness. Heidemann manufactures gearshifts, steering
columns and fuel caps in Germany and Spain.
SEASONALITY
Dura typically experiences decreased revenues and operating income during
the third calendar quarter of each year due to production shutdowns at OEMs for
model changeovers and vacations.
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Excel's automotive operations normally experience reduced sales volume in the
months of July, August and December as vacation periods, model changeover and
startups and, in the case of December, holidays which commence prior to
Christmas and run through New Year's Day, affect the number of production days.
Adwest experiences decreased revenues during August and December, as it shuts
down operations during these months due to vacation periods and holidays. The
RV/MT/HT segment is seasonal in that sales in the quarter October through
December are normally at reduced levels.
EFFECTS OF INFLATION
Inflation potentially affects us in two principal ways. First, a portion of
our debt is tied to prevailing short-term interest rates which may change as a
result of inflation rates, translating into changes in interest expense. Second,
general inflation can impact material purchases, labor and other costs. In many
cases, we have limited ability to pass through inflation-related cost increases
due to the competitive nature of the markets that we serve. In the past few
years, however, inflation has not been a significant factor.
MARKET RISK
We are exposed to various market risks, including changes in foreign
currency exchange rates and interest rates. Market risk is the potential loss
arising from adverse changes in market rates and prices, such as foreign
currency exchange and interest rates. We do not enter into derivatives or other
financial instruments for trading or speculative purposes. We enter into
financial instruments to manage and reduce the impact of changes in foreign
currency exchange rates and interest rates. The counterparties are major
financial institutions.
We manage our interest rate risk by balancing the amount of our fixed and
variable debt. For fixed rate debt, interest rate changes affect the fair market
value of such debt but do not impact earnings or cash flows. Conversely for
variable rate debt, interest rate changes generally do not affect the fair
market value of such debt but do impact future earnings and cash flows, assuming
other factors are held constant. At December 31, 1998, we had fixed rate debt of
$81.1 million and variable rate debt of $250.8 million. Holding other variables
constant (such as foreign exchange rates and debt levels) a one percentage point
increase in interest rates would have decreased the unrealized fair market value
of the fixed rate debt at December 31, 1998 by approximately $4.0 million and
would be expected to have an estimated impact on pre-tax earnings and cash flows
for next year of approximately $2.5 million.
FOREIGN CURRENCY TRANSACTIONS
A significant portion of our revenues during the year ended December 31,
1998 were derived from manufacturing operations in Europe, Latin America and
Canada. The results of operations and the financial position of our operations
in these countries are principally measured in their respective currency and
translated into Dollars. The effects of foreign currency fluctuations in such
countries are somewhat mitigated by the fact that expenses are generally
incurred in the same currencies in which revenues are generated. The reported
income of these subsidiaries will be higher or lower depending on a weakening or
strengthening of the Dollar against the respective foreign currency.
A significant portion of our assets at December 31, 1998 are based in our
foreign operations and are translated into Dollars at foreign currency exchange
rates in effect as of the end of each period, with the effect of such
translation reflected as a separate component of stockholders' investment.
Accordingly, our consolidated stockholders' investment will fluctuate depending
upon the weakening or strengthening of the Dollar against the respective foreign
currency.
Our strategy for management of currency risk relies primarily upon
conducting our operations in such countries' respective currency and we may,
from time to time, engage in hedging programs intended to reduce our exposure to
currency fluctuations.
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INTRODUCTION OF THE EURO
Eleven of the fifteen member countries of the European Union (the
"participating countries") adopted the Euro as their common legal currency on
January 1, 1999, based on fixed conversion rates between their existing
sovereign currencies (the "legacy currencies") and the Euro. Following
introduction of the Euro, the legacy currencies are scheduled to remain legal
tender in the participating countries as denominations of the Euro between
January 1, 1999 and January 1, 2002 (the "transition period"). During the
transition period, public and private parties may pay for goods and services
using either the Euro or the participating country's legacy currency. The Euro
will then trade on currency exchanges and be available for non-cash
transactions. We do not expect this conversion to have a material impact on our
operating results, financial condition or cash flows.
YEAR 2000
DURA
We are currently working to resolve the potential impact of the year 2000 on
the processing of time-sensitive information by our computerized information
systems. Any of our programs that have time-sensitive software may recognize
"00" as the year 1900 rather than the year 2000. This could result in
miscalculations, classification errors or system failures.
While our various operations are at different stages of Year 2000 readiness,
we have completed our global compliance review. Based on the information
available to date, we do not anticipate any significant readiness problems with
respect to our systems.
Our facilities have completed the inventory and assessment of their internal
information technology ("IT") and non-IT systems (including business, operating
and factory floor systems) and are working on remediation, as appropriate, for
these systems. The remediation may include repair, replacement, or upgrading, of
specific systems and components, with priorities based on a business risk
assessment. We expect that remediation activities for our internal systems will
be completed during the third quarter of 1999, and contingency plans, as needed,
before the end of the year.
The most reasonably likely worst case scenario that we currently anticipate
with respect to Year 2000 is the failure of some of our suppliers, including
utilities suppliers, to be ready. This could cause a temporary interruption of
materials or services that we need to make our products, which could result in
delayed shipments to customers and lost sales and profits to us. We have
completed an assessment of our critical suppliers and have developed contingency
plans to address the risks that we have identified. These plans include
resourcing materials or building inventory banks. We have aggressively addressed
this issue with all major suppliers and believe that contingency plans are in
place.
We have spent approximately $2.1 million on Year 2000 activities to date and
anticipate that we will incur additional future costs not to exceed $3.0 million
in total in addressing Year 2000 issues.
The outcome of our Year 2000 program is subject to a number of risks and
uncertainties, some of which (such as the availability of qualified computer
personnel and the Year 2000 responses of third parties) are beyond our control.
Therefore, there can be no assurances that we will not incur material
remediation costs beyond the above anticipated future costs, or that our
business, financial condition, or results of operations will not be
significantly impacted if Year 2000 problems with our systems, or with the
products or systems of other parties with whom we do business, are not resolved
in a timely manner.
EXCEL
In 1997, Excel began a program to insure that Year 2000 compliance issues
would be addressed. This program addresses IT, computer controlled manufacturing
processes and non-IT systems, as well
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as obtaining assurances from vendors supplying services and materials that they
will be Year 2000 compliant. This program has been chaired by an internal
committee made up of corporate personnel who have been using guidelines issued
by the Automotive Industry Action Group.
Excel's program consists of five phases: Inventory, Risk Evaluation,
Contingency Plan, Remediation and Testing. Excel has completed the Inventory and
Risk Evaluation portions of the program. Remediation, Contingency Planning and
Testing will be completed by the end of the second quarter of 1999. Excel's
program has been evaluated by independent third parties and has received overall
ratings of Low to Moderate Risk.
Each of Excel's plant facilities has assigned a Year 2000 program
coordinator to be a part of the committee to enable changes to made efficiently.
Status reports, action plans and timeliness are reported to Excel's executive
officers on a regular basis.
All critical informational systems software, manufacturing processes and
non-IT systems, including those of Schade, have been deemed Year 2000 compliant.
Any additions or changes made to existing applications, which have already been
tested, are also reviewed for Year 2000 compliance. Excel continues to review
vendors and suppliers as they complete their respective compliance programs.
Costs for the reviews and changes to date have been minimal. Future costs are
not expected to exceed $500,000.
Excel has yet to identify the most reasonably likely worst case scenario.
This will be done in conjunction with the contingency planning and testing
phases of Excel's program.
ADWEST
In 1997, Adwest began a program to insure that Year 2000 compliance issues
would be addressed. This program addresses IT, computer controlled manufacturing
processes and non-IT systems, as well as obtaining assurances from vendors
supplying services and materials that they will be Year 2000 compliant. This
program has been chaired by an internal committee made up of corporate personnel
who have been using guidelines issued by the Automotive Industry Action Group.
Adwest's program consists of five phases: Inventory, Risk Evaluation,
Contingency Plan, Remediation and Testing. Adwest has completed the Inventory
and Risk Evaluation portions of the program. Remediation, Contingency Planning
and Testing will be completed by the end of the second quarter of 1999. Adwest's
program has been evaluated by independent third parties and has received overall
ratings of Low to Moderate Risk.
Each of Adwest's plant facilities has assigned a Year 2000 program
coordinator to be a part of the committee to enable changes to made efficiently.
Status reports, action plans and timeliness are reported to Adwest's executive
officers on a regular basis.
The most reasonably likely worst case scenario that Adwest currently
anticipates with respect to Year 2000 is the failure of some of its suppliers,
including utilities suppliers, to be ready. This could cause a temporary
interruption of materials or services that it needs to make its products, which
could result in delayed shipments to customers and lost sales and profits.
Adwest has completed an assessment of its critical suppliers and has developed
contingency plans to address the risks that it has identified. These plans
include resourcing materials or building inventory banks. Adwest has
aggressively addressed this issue with all major suppliers and believes that
contingency plans are in place. Adwest estimates it will spend approximately
$8.3 million in addressing Year 2000 issues. The outcome of Adwest's Year 2000
program is subject to a number of risks and uncertainties, some of which (such
as the availability of qualified computer personnel and the Year 2000 responses
of third parties) are beyond its control. Therefore, there can be no assurances
that Adwest will not incur material remediation costs beyond the above
anticipated future costs, or that its business, financial condition, or results
of operations will not be significantly impacted if Year 2000 problems with its
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<PAGE>
systems, or with the products or systems of other parties with whom it does
business, are not resolved in a timely manner.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities," effective for
years beginning after June 15, 2000. SFAS No. 133 establishes accounting and
reporting standards requiring that every derivative instrument, including
certain derivative instruments embedded in other contracts be recorded in the
balance sheet as either an asset or liability measured at its fair value. SFAS
No. 133 requires that changes in the derivative's fair value be recognized
currently in earnings unless specific hedge criteria are met. "Special
accounting for qualifying hedges allow a derivative's gains or losses to offset
related results on the hedged item in the income statement and requires that a
company must formally document, designate and assess the effectiveness of
transactions that receive hedge accounting. We have not yet quantified the
impact of adopting SFAS No. 133 and have not yet determined the timing or method
of adoption.
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BUSINESS
GENERAL
We are the world's largest independent designer and manufacturer of driver
control systems for the global automotive industry. We are also a leading global
supplier of window systems, door systems and engineered mechanical components.
Our products include:
- driver control products--automotive cables, parking brake mechanisms and
transmission shifter mechanisms;
- window system products--encapsulated windows and push out and sliding
windows;
- door system products--window regulators, door latches, frames and hinges;
and
- other products--seating systems, engine control products and engineered
mechanical components, such as underbody tire carriers, jacks, brake,
clutch and accelerator pedals, turn signal and tilt lever assemblies,
injection molded plastic parts, hood hinges, automotive lighting products
and latches.
We sell our products to every major North American, European and Japanese
automotive OEM, including Ford, General Motors, DaimlerChrysler, Volkswagen,
BMW, Toyota, Honda, PSA (Peugeot and Citroen), Renault and Nissan. We
manufacture products for many of the most popular car, light truck and sport
utility models, including all of the top ten selling vehicles in North America
and nine of the top ten selling vehicles in Europe for 1998. We have over 80
manufacturing and product development facilities located in the United States,
Australia, Brazil, Canada, the Czech Republic, France, Germany, India, Mexico,
Portugal, Spain and the U.K. On a pro forma basis, we had revenues of $2.5
billion for the year ended December 31, 1998.
In March 1999, we completed both the Excel Acquisition and the Adwest
Acquisition. Excel is a leading supplier of window systems, door systems,
seating systems and injection molded plastic parts for the global automotive
market and appliances, hardware products, window systems, door systems and
seating systems for the RV/MT/HT industries in North America. On a pro forma
basis giving effect to a 1998 acquisition, Excel had net sales of $1.2 billion
for the year ended January 2, 1999. Adwest is a leading European supplier of
driver control products, including transmission shifter mechanisms, parking
brake mechanisms, steering columns and gears, cables and engine control
products, such as engine thermostats, radiator caps and fuel caps, primarily for
European automotive OEMs. Adwest had revenues of $399.7 million for the twelve
month period ended December 31, 1998.
INDUSTRY TRENDS
Our performance and growth is directly related to certain trends within the
automotive market, including the consolidation of the component supply industry,
the growth of system sourcing and the increase in global sourcing.
SUPPLIER CONSOLIDATION. During the 1990s, OEMs have continued to reduce
their supplier base in certain product segments, awarding sole-source contracts
to full-service suppliers. As a result, OEMs currently work with a smaller
number of full-service suppliers each of which supplies a greater proportion of
the total vehicle. These requirements can best be met by suppliers with
sufficient size, geographic scope and financial resources to meet such demands.
For full-service suppliers such as us, this environment provides an opportunity
to grow by obtaining business previously provided by other non full-service
suppliers and by acquiring suppliers that further enhance product, manufacturing
and service capabilities. OEMs rigorously evaluate suppliers on the basis of
product quality, cost control, reliability of delivery, product design
capability, financial strength, new technology implementation, quality and
condition of facilities and overall management. Suppliers that obtain superior
ratings are considered for sourcing new business; those that do not generally
continue their existing contracts, but
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normally do not receive additional business. Although these supplier policies
have already resulted in significant consolidation of component suppliers in
certain segments, we believe that opportunities exist for further consolidation
within our segment. This is particularly true in Europe, which has many
suppliers in this segment, many with relatively small market shares.
SYSTEM SOURCING. OEMs increasingly seek suppliers capable of manufacturing
complete systems of a vehicle rather than suppliers who only produce the
separate parts that comprise a system. By outsourcing complete systems, OEMs are
able to reduce their costs associated with the design and integration of
different components and improve quality by enabling their suppliers to assemble
and test major portions of the vehicle prior to beginning production. We have
capitalized on this trend by designing our mechanisms and cable systems to
function together and by providing mechanism and cable designs that are
integrated into the design of the entire vehicle.
GLOBAL SOURCING. Regions such as Asia, Latin America and Eastern Europe are
expected to experience significant growth in vehicle demand over the next ten
years. OEMs are positioning themselves to reach these emerging markets in a
cost-effective manner by seeking to design and produce "world cars" which can be
designed in one vehicle center but produced and sold in many different
geographic markets, thereby allowing OEMs to reduce design costs and take full
advantage of low-cost manufacturing locations. OEMs increasingly are requiring
their suppliers to have the capability to design and manufacture their products
in multiple geographic markets.
We have over 40 manufacturing facilities located in Australia, Brazil,
Canada, the Czech Republic, France, Mexico, Germany, India, Spain, Portugal and
the U.K. In addition, we have formed, or are in the process of forming,
strategic alliances with other suppliers throughout the world. These strategic
alliances, which range from investments in other manufacturers to informal
understandings, should not only give us access to new geographic markets and
customers, but also the capability of offering complementary products. We also
have nine technical centers located at our facilities in Europe and we have
relocated technical personnel resources to locations in which OEMs will develop
"world cars." By participating in the design of these vehicles and through
implementation of manufacturing processes near the international facilities of
the OEMs, we believe we can continue to expand on our international presence.
COMPETITIVE STRENGTHS
We believe that we possess a number of competitive strengths that have been
further enhanced by the Acquisitions, including:
- - WELL POSITIONED TO TAKE ADVANTAGE OF MARKET TRENDS: We believe that we are
well positioned to meet the demands of OEMs for fewer, full-service and
globally positioned suppliers. As further described below, we believe our
advanced design capabilities, broad product lines and ability to supply
complete systems, combined with our global production capabilities, will
enable us to take advantage of these market trends.
Advanced Design Capabilities: We seek to maintain a technological
advantage through our investment in product development and advanced
engineering. Our design and engineering staff works in partnership with
OEMs throughout the design, prototype development and manufacturing
implementation of our products. This partnership approach generates
cost-saving ideas that reduce product development cycle time and improve
vehicle quality by assuring better integration of components into the
assembled vehicle. Our CAD systems are compatible with those of our major
customers, enabling us to communicate design developments with customer
engineers throughout the design and development stage.
Broad Product Lines and Complete Systems Capabilities: We believe that
the breadth of our product capabilities in the markets in which we
compete is unmatched by any competitor and
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has been further enhanced by the Acquisitions. As a result of the
Acquisitions, we are one of a limited number of suppliers that can
develop and produce complete driver control systems globally, which
include the mechanical assembly as well as the actuating cables. OEMs
favor suppliers that can provide entire systems versus individual
components due to the improved quality and lower cost of installing a
system.
Global Presence: Adwest's operations and technical capabilities in
France, Germany, India, Spain and the U.K., combined with Excel's
operations and technical capabilities in the Czech Republic, Germany,
Mexico, Portugal, Spain and the U.K., complement our existing global
operations to provide expanded global production capabilities for both
North American and international OEMs. As a result of the Acquisitions,
we have global leadership positions in several key products, including
automotive cables, parking brake mechanisms, transmission shifter
mechanisms, window systems and door systems. On a pro forma basis,
approximately 36% of our 1998 revenues were generated from sales in
Europe. We believe that this global production capability provides us
with a competitive advantage in obtaining business on the OEMs' "world
car" platforms.
- - STRONG OEM PARTNERSHIPS: We have formed strong partnerships with our major
OEM customers due to our high level of product quality, customer service,
product design and engineering capabilities. Our application of innovative
operating techniques, combined with investments in sophisticated capital
equipment, has led to a high level of product quality, industry-low defect
rates and the receipt of numerous supplier awards including the Ford Q-1
Certification, DaimlerChrysler Gold Pentastar Award, GM Target for
Excellence, Nummi Delivery Performance Award and the Isuzu Quality
Achievement Award. Stringent internal controls, including strong inventory
and project management systems, enable us to provide high customer service
levels. OEMs are demanding increasingly more from their suppliers in regard
to just-in-time inventory management, particularly during the critical launch
period of a model. Our strong performance in this area has substantially
strengthened our relationships with our OEM customers.
- - WELL POSITIONED ON POPULAR PRODUCT PLATFORMS: We manufacture products for
many of the most popular car, light truck and sport utility vehicle models.
In North America, these include all of the top ten selling vehicles for 1998:
the Ford Taurus, Explorer, Ranger and F-Series pickups, the GM full-size
pickup, the Dodge Caravan and Ram pickup, the Honda Accord and Civic, and the
Toyota Camry. In Europe, these include nine of the top ten selling vehicles
for 1998: the Volkswagen Golf, Passat and Polo, the GM/Opel Astra, Corsa and
Vectra, the Renault Megane and the Ford Escort/Focus and Fiesta. The Excel
Acquisition increased our content per vehicle on key light trucks and SUVs,
such as the Ford Explorer and Windstar, Dodge Durango and GM full size
pickup, as well as on high volume passenger cars such as the Chrysler
Concorde, Dodge Intrepid and Ford Taurus and Escort. Pro forma for the
Acquisitions, over half of our North American automotive sales in 1999 were
to the light truck and SUV segment, the fastest growing segment of the light
vehicle market. The Adwest Acquisition increased our content per vehicle on
high volume European passenger cars such as the Ford Mondeo, Volkswagen Golf
and Polo, BMW 3 Series and the GM Epsilon. The Acquisitions have increased
our 1998 North American content per vehicle from $36.55 to $97.77 on a pro
forma basis.
- - SIGNIFICANT ACQUISITION EXPERIENCE: Our leadership team, the members of which
have an average of 20 years of experience in the automotive supply industry,
has successfully completed eleven acquisitions and two joint ventures over
the last three years, including the Acquisitions and the acquisition of
Trident in April 1998, an acquisition which more than doubled our size in
terms of revenues at that time. We have been successfully integrating the
acquired operations and generating significant operational efficiencies and
cost savings. In addition, we have generally retained key personnel from
acquired companies, which has enabled us to strengthen our global management
team as we have grown.
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BUSINESS STRATEGY
Our primary business objective is to capitalize on the consolidation, system
sourcing and globalization trends in the automotive supply industry in order to
continue to be the leading provider of the component parts and systems that we
supply to OEMs worldwide. The key elements of our operating and growth
strategies are as follows:
OPERATING STRATEGY
- CONTINUOUS OPERATIONAL IMPROVEMENTS: We continuously implement strategic
initiatives designed to improve product quality and reduce manufacturing
costs through, among other things, the introduction of cellular
manufacturing methods, consolidation of manufacturing facilities,
improvement in inventory management and the reduction of scrap.
Manufacturing flexibility enables our facilities to produce systems in a
cost-effective manner and strengthens our ability to meet the just-in-time
and in-line sequence delivery schedules of many of our customers. In
addition, we utilize a common set of key metrics used to measure actual
performance in comparison to standards and goals.
- CAPITALIZE ON OPPORTUNITIES FOR OPERATING SYNERGIES: The Acquisitions are
expected to provide us with a number of opportunities to reduce costs and
improve operational efficiency. The similarity of the manufacturing
processes and technical capabilities of Dura, Excel and Adwest is expected
to result in significant cost savings and operating synergies. Immediately
following the execution of acquisition agreements, we established
cross-functional teams comprised of representatives from Dura, Excel and
Adwest, which identified synergies expected to be realized from
consolidation of our design, engineering and administrative functions,
plant restructuring and realignment and coordination of raw material
purchases. In addition, the cross-functional teams formulated an
integration plan, which is currently being implemented.
- FOSTER A DECENTRALIZED, PARTICIPATORY CULTURE: Our decentralized approach
to managing our manufacturing facilities encourages decision making and
employee participation in areas such as manufacturing processes and
customer service. This "team" approach fosters a unified culture and
enhances communication of strategic direction and goals, while
facilitating a greater success rate in reaching and exceeding our
objectives. We provide ownership-related incentives to not only our
managers, but also to our salaried and hourly employees, through grants
under Dura's 1998 Stock Incentive Plan and participation in the Dura
Employee Stock Discount Purchase Plan.
GROWTH STRATEGY
- FOCUS ON SYSTEMS: OEMs are increasingly seeking suppliers capable of
providing complete systems rather than suppliers who only provide separate
component parts. A key element of our growth strategy has been to add to
our ability to provide complete systems to our OEM customers. The Adwest
Acquisition significantly enhanced our ability to provide transmission
shifter systems and parking brake systems on a global basis while the
Excel Acquisition expanded our product offerings by adding new product
systems including window systems and door systems.
- INCREASE PLATFORM AND CUSTOMER PENETRATION: A key element of our strategy
is to increase volume by adding new customers and to strengthen our
existing customer relationships by broadening our range of products
through internal development efforts and acquisitions. During 1998,
through the acquisition of Trident, we increased our penetration of
certain foreign OEMs such as Volkswagen, Toyota, Honda, PSA (Peugeot and
Citroen), Renault and Nissan. The Acquisitions have further expanded our
relationships with most of the North American and European OEMs. We have
also obtained significant firm orders on a number of new platforms
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for the years 1999 through 2001 for incremental new business in North
America and Europe. We believe that our geographic diversity and product
depth strengthen our ability to pursue new vehicle platform contracts in
the future.
- EXTEND GLOBAL MANUFACTURING REACH: In 1998, over 70% of total worldwide
passenger vehicle production occurred outside North America. To meet OEMs'
increasing preference for suppliers with global capabilities, we have
expanded our manufacturing operations into new geographic markets through
strategic acquisitions and two joint ventures. Consistent with this
strategy, the acquisitions of the VOFA Group (Germany, Spain), REOM
Industries (Aust) Pty Ltd. (Australia), Trident (Brazil, Canada, France,
Germany, U.K.), Pollone, S.A. (Brazil), Excel (Czech Republic, Germany,
Mexico, Portugal, Spain, U.K.) and Adwest (France, Germany, India, Spain,
U.K.) enhanced our ability to serve our customers globally. Increased
international sales will also allow us to mitigate the effects of cyclical
downturns in a given geographic region and further diversify our OEM
customer base.
- PURSUE STRATEGIC ACQUISITIONS: We compete in what we believe to be a $12
to $14 billion, highly fragmented, worldwide automotive market that
provides numerous potential acquisition and joint venture opportunities.
Since 1996, we have successfully completed eleven strategic acquisitions
and formed two joint ventures. Our management has substantial experience
in completing and integrating acquisitions within the automobile parts
industry and believes that this experience will help us select and pursue
acquisition opportunities that meet our criteria of: (1) providing
additional and complementary product, manufacturing and technical
capabilities; (2) broadening our geographic coverage and strengthening our
ability to supply products on a global basis; (3) increasing both the
number of models for which we supply products and the content level on
existing models; and (4) increasing our customer penetration.
THE ACQUISITIONS
EXCEL ACQUISITION
On March 23, 1999, we acquired Excel through a merger of Excel with and into
the Issuer. In the merger, DASI issued an aggregate of approximately 5.1 million
shares of its Class A common stock and paid $155.5 million in cash to Excel's
former shareholders. The Excel Acquisition had a transaction value of
approximately $471.3 million, plus fees and expenses. The cash consideration and
related fees and expenses paid in the Excel Acquisition (including acquired
indebtedness) were financed through borrowings under the new credit facility.
Excel is a leading tier-one and tier-two supplier to the automotive and
RV/MT/HT industries. Excel produces window systems, door systems and seating
systems and injection molded plastic parts for North American OEMs, which
accounted for approximately 75% of Excel's 1998 North American net sales. The
balance of Excel's net sales in North America relate to the design and
manufacture of appliances, hardware products, window systems, door systems and
seating systems for the RV/MT/HT industries. Excel is the leading independent
supplier of window systems to the combined automotive, light truck and van, bus
and recreational vehicle markets in North America.
On July 1, 1998, Excel acquired 70% of Schade, a designer and manufacturer
of window systems, ornament and roof moldings, door frames, plastic body
components (wind deflectors, air intakes and ventilation covers) and plastic
interior fittings or equipment (center consoles, roof covers and panels and
sliding roof covers) for European OEMs.
Excel and Schade supply products primarily to Ford/Jaguar, DaimlerChrysler,
GM, Volkswagen, BMW, Lear Corporation, Johnson Controls and Fleetwood
Enterprises through 31 facilities located in the Czech Republic, Germany,
Mexico, Portugal, Spain, the U.K. and the United States. For the year
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ended January 2, 1999, Excel generated net sales of $1.1 billion and, on a pro
forma basis giving effect to the acquisition of Schade, net sales of $1.2
billion.
ADWEST ACQUISITION
On March 15, 1999, Dura acquired through a cash tender offer approximately
95% of the outstanding ordinary shares of Adwest. The aggregate consideration
(including acquired indebtedness) and related fees and expenses paid in the
Adwest Acquisition were financed through borrowings under the new credit
facility. We intend to acquire all of the remaining ordinary shares within the
next six months. We estimate that the aggregate cost of the Adwest Acquisition,
including the amount necessary to acquire the remaining outstanding shares, will
be approximately $295 million, plus fees and expenses.
Adwest is a leading European supplier of driver control products, including
transmission shifter mechanisms, parking brake mechanisms, steering columns and
gears, cables and engine control products, such as engine thermostats, radiator
caps and fuel caps. Prior to the Adwest Acquisition, our primary strength in
Europe was the design and manufacture of automotive cables. Following the Adwest
Acquisition, we have the capability to supply complete driver control systems in
Europe. Adwest supplies its products primarily to Volkswagen, BMW, PSA (Peugeot
and Citroen), Ford, Renault, GM, Nissan, Volvo and other European OEMs. Adwest's
operations consist of 17 facilities in France, Germany, India, Spain, the U.K.
and the United States. Adwest had revenues of $399.7 million for the twelve
month period ended December 31, 1998.
STRATEGIC BENEFITS OF THE ACQUISITIONS
As a result of the Acquisitions, we have significantly increased our product
offerings, scale and global reach. We believe that we are now able to provide
greater value to our customers due to the addition of several new and
complementary product lines, as well as our ability to provide complete
transmission shifter systems and parking brake systems on a global basis. The
Acquisitions represent our two largest acquisitions to date and have increased
our 1998 revenues from $739.5 million to over $2.5 billion on a pro forma basis.
We believe that the strategic benefits of the Acquisitions include the
following:
ENHANCED SYSTEMS CAPABILITIES AND PRODUCT OFFERINGS. OEMs are increasingly
seeking suppliers capable of providing complete systems rather than suppliers
who only provide separate component parts. A key element of our acquisition
strategy has been to add to our ability to provide complete systems to our OEM
customers. The Excel Acquisition further diversifies our revenue base by
bringing complete product systems, including window systems and door systems.
Adwest is a leading provider of transmission shifter mechanisms in Europe and
provides us with needed mechanism manufacturing capability and established
transmission shifter contracts. Adwest's parking brake systems and broad array
of cable assembly products complement our existing product lines and enhance our
ability to deliver more complete systems to the OEMs at a lower overall cost.
INCREASED CUSTOMER PENETRATION. As a result of the Acquisitions, we are a
supplier to almost every major automotive OEM on a worldwide basis. The Excel
Acquisition significantly expanded our penetration within each of the three
major North American OEMs (GM, Ford and DaimlerChrysler), which were the top
three customers of both Dura and Excel for 1998. Adwest's strong relationship
with a broad customer base, specifically with Volkswagen (currently Adwest's and
Schade's largest customer and the highest volume producer of automobiles in
Europe) and BMW, further strengthens and diversifies our global position. Adwest
currently supplies Ford Europe with its engine thermostats and has been
appointed the sole supplier worldwide of transmission shifters to Volkswagen for
their new generation of Polo, Golf and Audi models.
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INCREASED MODEL PENETRATION. The Excel Acquisition increases our content
per vehicle on key light trucks and sport utility vehicles, such as the Ford
Explorer, Ford Windstar, Dodge Durango and GM full size pickup, as well as on
high volume passenger cars such as the Chrysler Concorde, Dodge Intrepid and
Ford Taurus and Escort. The Adwest Acquisition increases our content per vehicle
on high volume European passenger cars such as the Ford Mondeo, Volkswagen Golf
and Polo, BMW 3 Series and GM Epsilon.
EXPANDED GLOBAL CAPABILITIES. OEMs are increasingly demanding that their
suppliers have global production capabilities. Adwest's operations and technical
capabilities in France, Germany, India, Spain and the U.K., combined with
Excel's operations and technical capabilities in the Czech Republic, Germany,
Mexico, Portugal, Spain and the U.K., complement Dura's current European
initiatives to provide expanded global production capabilities for both North
American and international OEMs. On a combined basis, we have global leadership
positions in several key products, including cables, transmission shifter
mechanisms, parking brake mechanisms, window systems and door systems. On a pro
forma basis, approximately 36% of our 1998 revenues were generated from sales in
Europe.
CRITICAL MASS. On a pro forma basis, Dura would have had revenues of $2.5
billion for the year ended December 31, 1998 and an equity market capitalization
of over $575.0 million at December 31, 1998. Size is a critical factor in the
automotive industry where increasing scale is necessary for long-term success as
OEMs continue to reduce suppliers, focusing only on those with quality products,
leading edge design and engineering capabilities, service and long term
sustainability.
OPERATIONAL EFFICIENCIES. The Acquisitions are expected to provide us with
a number of opportunities to reduce costs and improve operational efficiency.
The similarity of the manufacturing processes and technical capabilities of
Dura, Excel and Adwest is expected to result in significant cost savings and
operating synergies. We have established cross-functional teams, which have
identified synergies expected to be realized from our consolidation of design,
engineering and administrative functions, plant restructuring and realignment,
coordination of raw material purchases and other operating improvements. We
expect to realize aggregate annual cost savings from the Acquisitions of
approximately $15.0 million in 1999 (which represents only partial year credit
given the timing of the Acquisitions), $25.0-$30.0 million in 2000 and $35.0
million thereafter.
OTHER RECENT ACQUISITIONS
In addition to the Acquisitions, we have completed the following recent
acquisitions:
TRIDENT. In April 1998, we acquired Trident, a leading global designer and
manufacturer of automotive cables. Trident's products include parking brake and
manual transmission shifter cables, clutch, accelerator and speed control cables
and lighting products. At the time of the acquisition, Trident had annual
revenues of approximately $300 million and held a substantial share of the North
American and European automotive cable markets. The acquisition of Trident
significantly expanded our penetration with North American OEMs, making us the
largest supplier of driver control systems and cable-related systems to Ford, GM
and DaimlerChrysler. This acquisition also doubled sales to Honda, Volkswagen
and PSA (Peugeot and Citroen), substantially increased sales to BMW, Mercedes
and Renault and added new customers such as Fiat and Porsche. This acquisition
also added 12 major design and manufacturing facilities located in the United
States, Brazil, Canada, France, Germany and the U.K. and a strategic alliance in
Japan, enhancing our strategic geographic position.
GT AUTOMOTIVE. In August 1997, we acquired GT Automotive Systems, a
designer and manufacturer of column-mounted transmission shifter mechanisms and
turn signal and tilt lever assemblies. At the time of the acquisition, GT
Automotive had annual revenues of approximately $70.0 million and a substantial
share of the North American column-mounted transmission shifter mechanisms
market. GT Automotive's strong position in this market, combined with our
existing
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position in console-based transmission shifter mechanisms, increased our share
of the North American transmission shifter market. In addition, the acquisition
added Nissan as a customer.
VOFA. In January 1997, we acquired the VOFA Group, a manufacturer of
transmission shifter cables, brake cables and other light duty cables for the
European automotive and industrial markets. At the time of the acquisition, VOFA
had annual revenues of approximately $85.0 million. The acquisition provided us
with additional technical and manufacturing expertise in cables and a strong
presence in Europe. In addition, the acquisition added new customers, such as
Mercedes, Volkswagen and BMW.
In addition, we have successfully completed six other strategic acquisitions
and two joint ventures since the initial public offering of our Class A common
stock in August 1996.
PRODUCTS
We are the world's largest independent designer and manufacturer of driver
control systems for the global automotive industry. We are also a leading global
supplier of window systems and door systems. We believe, based upon our
experience in the automotive supply industry, that we hold the #1 or #2 market
position for our principal products in the following markets. The table below
sets forth our estimated pro forma combined market position in North America and
Europe in 1998:
<TABLE>
<CAPTION>
MARKET
PRODUCT CATEGORY REGION POSITION
- ------------------------------------ ---------------------------------------------- ---------
<S> <C> <C>
Automotive cables North America................................. #1
Europe........................................ #1
Parking brake mechanisms North America................................. #1
Europe........................................ #1
Transmission shifter mechanisms North America................................. #1
Europe........................................ #2
Window systems North America................................. #1
Europe........................................ #2
Window regulators North America................................. #1
</TABLE>
We also hold the #1 market position in Europe for engine thermostats and
ornamentation products, the #2 market position in Europe for body components and
the #1 position in North America for tire carriers.
Although a portion of our products are sold directly to OEMs as finished
components, we use most of our products to produce "systems" or "subsystems,"
which are groups of component parts located throughout the vehicle which operate
together to provide a specific vehicle function. Systems currently produced by
us include parking brake, transmission shifter and latch systems. As a result of
the Acquisitions, we significantly expanded our ability to supply OEMs with
additional systems, such as window, door, seating and engine control systems.
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A brief summary of each of our principal product categories is set forth
below:
<TABLE>
<CAPTION>
PRODUCT CATEGORY DESCRIPTION
- ------------------------------------- --------------------------------------------------------------------------
<S> <C>
Driver Control Systems:
AUTOMOTIVE CABLES.................. cables used for parking brakes, transmission shifters (manual and
automatic), throttles and light duty cables (such as cables used for oil
level gauges, hood releases and fuel doors)
PARKING BRAKE MECHANISMS........... components used for both foot and hand operated parking brakes
TRANSMISSION SHIFTER
MECHANISMS....................... manual and automatic console-based and column-mounted transmission
shifters
Window Systems....................... various types of automotive windshields and rear, vent, quarter, pushout
and sliding windows
Door Systems......................... window regulators (both manual and automatic), door latches, door frames,
door hinges and related components
Seating Systems...................... seat and height adjuster systems and recliner mechanisms
RV/MT/HT Products.................... appliances (such as water heaters, furnaces, stoves and ranges), seating
components, door and window assemblies, wing ventilator, fixed and
moveable windows
Other Products....................... engineered mechanical components (such as underbody tire carriers, jacks,
brake, clutch and accelerator pedals and turn signal and tilt lever
assemblies), hood hinges, injection molded plastic parts (including door,
window and body components), steering gears, rack and pinion gears,
headlamps, latches (primary, secondary and combination hood, deck lid and
tailgate) and engine control products (engine thermostats, radiator caps
and fuel caps)
</TABLE>
The following table sets forth the approximate composition by product
category of the revenues for Dura, Excel and Adwest for each of their respective
latest fiscal years and for Dura for 1998 on a pro forma basis:
<TABLE>
<CAPTION>
LAST FISCAL YEAR
--------------------------------------------
<S> <C> <C> <C> <C>
PRO
PRODUCT CATEGORY DURA EXCEL ADWEST FORMA
- ------------------------------------------------------------------------------ --------- --------- ----------- ---------
Driver Control Systems:
Automotive cables........................................................... 38% -- 8% 14%
Parking brake mechanisms.................................................... 18% -- 4% 7%
Transmission shifter mechanisms............................................. 17% -- 38% 12%
Window Systems................................................................ -- 32% -- 16%
Door Systems.................................................................. -- 19% -- 9%
Seating Systems............................................................... -- 11% -- 5%
RV/MT/HT Products............................................................. -- 21% -- 10%
Other Products................................................................ 27% 17% 50% 27%
--------- --------- ----- ---------
Total................................................................... 100% 100% 100% 100%
--------- --------- ----- ---------
--------- --------- ----- ---------
</TABLE>
For additional financial information regarding the revenues of Dura and
Excel by product segment for each of their last three years, see Note 8 to the
audited consolidated financial statements of Dura and Note 11 to the audited
consolidated statements of Excel, respectively, included elsewhere in this
prospectus.
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CUSTOMERS AND MARKETING
The North American automotive market is dominated by GM, Ford and
DaimlerChrysler, with Japanese and foreign manufacturers accounting for
approximately 20% of the market. In North America, we supply our products
primarily to Ford, GM, DaimlerChrysler and Toyota. As a result of the
Acquisitions, we have further expanded our global presence and have added new
customers and increased penetration into certain existing customers such as
Volkswagen and BMW. As a result of our acquisition of Excel, we also sell
certain of our automotive products to other tier 1 suppliers, such as Lear
Corporation, Johnson Controls Inc. and Fleetwood Enterprises, Inc.
In 1998, approximately 70% of total worldwide passenger vehicle production
occurred outside of North America. As a result of our recent acquisitions, we
derive a significant amount of our revenues from sales to OEMs located outside
of North America. Set forth below is a summary of our sales by geographic region
for 1997 and 1998 and 1998 on a pro forma basis:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------
PRO FORMA
REGION 1997 1998 1998
- ------------------------------------------------------------------------------------ --------- --------- -----------
<S> <C> <C> <C>
North America....................................................................... 79% 77% 61%
Europe.............................................................................. 20% 20% 36%
Other............................................................................... 1% 3% 3%
--------- --------- -----
Total............................................................................... 100% 100% 100%
--------- --------- -----
--------- --------- -----
</TABLE>
Our foreign operations in 1996 were not material.
The following is a summary of the significant customers of Dura, Excel and
Adwest for each of their respective latest fiscal years and for Dura for 1998 on
a pro forma basis:
<TABLE>
<CAPTION>
LAST FISCAL YEAR
--------------------------------------------
PRO
CUSTOMER DURA EXCEL ADWEST FORMA
- ------------------------------------------------------------------------------ --------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Ford/Jaguar................................................................... 36% 36% 12% 32%
GM............................................................................ 23% 5% 8% 12%
DaimlerChrysler............................................................... 15% 9% 2% 10%
Volkswagen.................................................................... 4% 4% 18% 7%
BMW........................................................................... 2% 3% 17% 5%
PSA (Peugeot and Citroen)..................................................... 3% -- 14% 4%
Toyota........................................................................ 4% -- 2% 2%
Honda......................................................................... 2% -- 2% 1%
Renault....................................................................... 1% -- 11% 2%
Other......................................................................... 10% 43% 14% 25%
--------- --------- ----- ---------
Total................................................................... 100% 100% 100% 100%
--------- --------- ----- ---------
--------- --------- ----- ---------
</TABLE>
For additional financial information regarding the principal geographic
areas of operations and the major customers of Dura, Excel and Adwest for each
of the last three years, see Note 8 to the audited consolidated financial
statements of Dura, Note 11 to the audited consolidated financial statements of
Excel and Note 2 to the audited consolidated financial statements of Adwest,
respectively, included elsewhere in this prospectus.
Our customers award contracts for a particular car platform, which may
include more than one car model. Such contracts range from one year to the life
of the models, which is generally three to seven years, and do not require the
purchase by the customer of any minimum number of parts. We also compete for new
business to supply parts for successor models. Because we supply parts for a
broad
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<PAGE>
cross-section of both new and mature models, our reliance on any particular
model is minimized. We manufacture products for many of the most popular car,
light truck, sport utility and mini-van models in North America and Europe.
Although not comprehensive, the following table presents an overview of the
major models for which we have orders to supply products on current or new model
vehicles:
<TABLE>
<CAPTION>
CUSTOMER CAR MODELS* TRUCK AND VAN MODELS*
- ---------------------------------- -------------------------------------- --------------------------------------
<S> <C> <C>
Ford.............................. Continental/Town Car, Contour/ AUTOEUROPA MPV, Econoline, ESCORT VAN,
Mystique/MONDEO, Cougar, Crown Expedition/Navigator, F-Series,
Victoria/ Grand Marquis, Explorer/ Mountaineer, PAMPA, Ranger,
Escort/Tracer, FIESTA, Mazda 626, TRANSIT, Villager/ Quest, Windstar,
Mustang, Ka, Taurus/ Sable Mazda Pickup
GM................................ Cutlass/Malibu/Grand Am, ASTRA, Blazer/Jimmy/Bravada, C/K
Aurora/Park Avenue/Bonneville/ Pickup/Tahoe/Sierra/Yukon/
LeSabre, Century, CORSA, Corvette, Escalade/Denali, GMT 800,
Deville/Seville/ Eldorado, Silhouette/TransSport/Venture/
Firebird/Camaro, KADETT, Lumina/Monte Montana, CORSA PICKUP, D-20, D-40,
Carlo/ Regal/Intrigue/Grand Prix, D-60, Express, Postal, S-10
Alero, Saturn, Innovate, Sunfire/ Pickup/Sonoma, Safari/Astro, Savana,
Cavalier, VECTRA, Silverado, Suburban, UPS
DaimlerChrysler................... Breeze, Cirrus, Intrepid/ Caravan/Voyager/Town & Country,
Concorde/300M, Neon, Prowler, Sebring, Cherokee/Grand Cherokee,
Viper, Stratus, A, C, E, M AND S Dakota/Durango, Eurostar, RamVan &
CLASS, CABRIO Pickup, Wrangler, L-608 D, L709E, LS
1935, SKN, SPRINTER
Toyota............................ Avalon, Camry, Carina, COROLLA, LEXUS, Sienna, Toyota Pickup
PRIZM, SOLARA
Volkswagen........................ BEETLE, A4, A8, GOL, GOLF, LUPO, BUS, KOMBI, SAVEIRO, TRANSPORTER
PARATI, PASSAT, POLO, QUANTUM,
SANTANA, SUB-POLO, VW SYNCHRO, AUDI
A3, TT, SKODA, MPV GP, ROLLS ROYCE
BMW............................... Z5 COUPE, Z3(B16), 3, 5, 7 AND 8 --
SERIES
Citroen........................... EVASION, SAXO, XSARA, XANTIA, XM, ZX BERLINGO, JUMPER
Fiat S.P.A........................ ULYSSE --
Honda............................. Accord, Acura, Civic --
Nissan............................ SENTRA, MICRA, PRIMERA --
Peugeot........................... 106, 306, 406, 605, 806 EXPERT, PARTNER
Porsche AG........................ 968, 986, 996 --
Renault........................... CLIO, ESPACE, LAGUNA, MEGANE, SAFRANE, KANGOO, MASTER
TWINGO
Rover Group Limited............... METRO, ROVER 800 DISCOVERY, ROVER
SEAT, S.A......................... AROTA, CORDOBA, IBIZA, TOLEDO, S5 --
</TABLE>
- ------------------------
* Models manufactured outside of North America are italicized.
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<PAGE>
Most of the parts we produce have a lead time of two to five years from
product development to production. Although not comprehensive, the following
table presents an overview of the major models for which we have been awarded
new business (i.e., parts not currently supplied by us):
<TABLE>
<CAPTION>
MODEL YEAR OEM MODEL(1) TYPE OF BUSINESS
- ---------- ------------------------------- ---------------------------------- -------------------------------
<S> <C> <C> <C>
2000...... GM............................. Impala/Monte Carlo Transmission shifter mechanisms
Deville, Bonneville/LeSabre/ Hood latch
Antares
ASTRA, VECTRA Transmission shifter cable
Corsa Door cables, manual
transmission cables and parking
brake cables
Ford........................... TRANSIT Parking brake system
T-Bird Hood and deck hinge
Equator Hood hinge
Explorer Hood hinge and transmission
shifter mechanisms
SUV Hood hinge
P-207 Parking brake mechanisms, door,
door glass and rear slide glass
CD 132 B-pillar cappings
CT 170 Door
UW-137 Seats
DaimlerChrysler................ Mid Size Hood hinge, transmission
shifter mechanisms, parking
brake mechanisms
Ram Van, Dakota Transmission shifter mechanisms
PT44 Door
Peugeot........................ Z8 Parking brake mechanisms
306NF Roof moldings
406 Front brake cable
Toyota......................... Avalon Accelerator pedal
120N SUV Door hinge
Mercedes....................... SPRINTER Transmission shifter cables
Volkswagen..................... POLO Transmission shifter cables
T5 Sliding window
Golf, Audi A3 Transmission shifter mechanisms
Audi B6 Cross beam
BMW............................ E46/5 Roof moldings, climate control
cable, door cable
2001...... Ford........................... Explorer Transmission shifter
mechanisms, glass
Lincoln LS Seat release cable, parking
brake and hood latch systems
U231 Glass
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
MODEL YEAR OEM MODEL(1) TYPE OF BUSINESS
- ---------- ------------------------------- ---------------------------------- -------------------------------
<S> <C> <C> <C>
Mondeo Transmission shifter mechanisms
and cables
Jaguar, X350, X400 Quarter windshield, back lite,
trim
Mustang Hood hinge
T-Bird Parking brake mechanisms
C212 B-pillar cappings
Navigator Transmission shifter
mechanisms, door
U204 SUV Window latch and hood release
cables
PN96 Glass
GM............................. GMX-320 Parking brake mechanisms
GMX-240 Jack and tire carrier
GMT-560 Clutch
GMT-360 Parking brake mechanisms,
transmission shifter mechanisms
A Quarter panel glass and remote
access door glass
DaimlerChrysler................ Ram Truck Hood hinge
PT-74 Door
S203 C-pillar caps/molding, side
window
Toyota......................... 887T SUV Accelerator pedal
Honda.......................... SUV Tire carrier
Nissan......................... Altima Jack
Almera Brake, accelerator, hood lock,
fuel filler cables
Volkswagen..................... MPV GP Transmission shifter mechanism
2002...... Ford........................... Ranger Rear slide glass
Transit Climate control cables
Windstar Liftgate glass
Mondeo Transmission shifter system
DaimlerChrysler................ C Class Parking brake cable
GM............................. GMT-355, Saturn Glass
Corsa, Epsilon Transmission shifter mechanisms
Gamma Parking brake and door release
cables
Citroen........................ Xsara Parking brake cables
Peugeot........................ 206 Clutch cable
Honda.......................... Civic Glass
Volkswagen..................... Beetle, Synchro Transmission shifter mechanisms
Sharan, Passat Climate control cables
BMW............................ 7 series Parking brake cables
</TABLE>
74
<PAGE>
<TABLE>
<CAPTION>
MODEL YEAR OEM MODEL(1) TYPE OF BUSINESS
- ---------- ------------------------------- ---------------------------------- -------------------------------
<S> <C> <C> <C>
Volvo.......................... 850 Door cables
</TABLE>
- ------------------------
(1) Models manufactured outside of North America are italicized.
Major customers for our RV/MT/HT products include Fleetwood Enterprises,
Winnebago, Damon, Jayco, Thor, Coachmen, Motor Coach Industries and Navistar
International Corporation. Separate sales and engineering groups are located in
Rockford, Illinois and Elkhart, Indiana to service customers in this business
segment. Similar to the automotive industry, customers in the RV/MT/HT segment
generally issue purchase orders for products on an annual basis and periodically
issue releases against those purchase orders. Accordingly, this segment does not
have a significant backlog of orders at any particular time.
Our sales and marketing efforts are designed to create overall awareness of
our engineering, design and manufacturing capabilities and to have us considered
and selected to supply our products for new and redesigned models of our OEM
customers. Our sales and marketing staff works closely with our design and
engineering personnel to prepare the materials used for bidding on new business
as well as to provide a consistent interface between us and our key customers.
Most of our sales and marketing personnel have engineering backgrounds which
enable them to understand and participate in the design and engineering aspects
of acquiring new business as well as ongoing customer service. Our sales and
marketing personnel are organized, together with our design and engineering
personnel, into customer-dedicated program teams. Each program team is under the
leadership of a program manager, who, in turn, reports to our vice president of
sales and marketing. Each of our major customers has its own dedicated program
manager. We currently have sales and marketing personnel located in every major
region in which we operate. From time to time, we also participate in industry
trade shows and advertise in industry publications.
DESIGN AND ENGINEERING SUPPORT
We believe that engineering service and support are key factors in
successfully obtaining new business. We utilize program management with
customer-dedicated program teams, which have full design, development, test and
commercial issues under the operational control of a single manager. In
addition, we establish cross-functional teams for each new program to ensure
efficient product development from program conception through product launch.
We have technical centers located in Australia, France, Germany, the U.K.
and the United States. We have established a separate advanced technology group
to help maintain our position as a technology leader. The advanced technology
group has developed many innovative features in our products, including many
features which were developed in conjunction with our customers. In recent
years, we have introduced plastics into many traditionally metal products, such
as transmission shifter mechanisms and parking brake mechanisms. In other
material alternatives, we are investigating the potential use of injection
molded magnesium through a process known as Thixomolding and we are looking into
overmolding of metallic and structural materials. Our advanced technology group
developed a combination transmission shifter and transfer case 4x4 shifter
mechanism, which is now in production on the Chrysler Grand Cherokee. We also
utilize CAD in the design process, which enables us to share data files with our
customers via compatible systems during the design stage, thereby improving
function, fit and performance within the total vehicle. We also utilize CAD
links with our manufacturing engineers to enhance manufacturability and quality
of the designs early in the development process.
We have more than 360 patents granted or in the application process. The
patents granted expire over several years beginning in 1999. Although we believe
that, taken together, the patents are significant, the loss or expiration of any
particular patent would not be material to us.
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<PAGE>
MANUFACTURING
We employ a number of different manufacturing processes. We utilize flexible
manufacturing cells in both the mechanism and cable assembly processes.
Manufacturing cells are clusters of individual manufacturing operations and work
stations grouped in a cylindrical configuration, with the operators placed
centrally within the configuration. This provides flexibility by allowing
efficient changes to the number of operations each operator performs. When
compared to the more traditional, less flexible assembly line process, cell
manufacturing allows us to maintain our product output consistent with our
customers' requirements and reduce our level of inventory. In addition, we
utilize high volume production lines for final assembly of our automotive
lighting and door handle products.
Mechanical assemblies consist of between five and 50 individual components,
which are attached to form an integrated mechanism. Our assembly operations are
performed on either dedicated, high-volume, automated assembly machines or on
low capital-intensive, flexible, cell-oriented assembly units capable of low or
high volume production runs. The assembly operations construct the final product
through hot or cold forging machines, plastic injection molding, welding,
staking and riveting the component parts. A large portion of the component parts
are purchased from our outside suppliers. However, we manufacture our own
stampings, a process which consists of passing sheet metal through dies in a
stamping press to form the metal into three-dimensional parts. We produce
stamped parts using single-stage and progressive dies in presses, which range in
size from 150 to 600 tons. Through cell teams, which stress employee
involvement, our processes are continuously upgraded to increase flexibility,
improve operating safety and minimize changeover times of the dies.
Our door systems and body components use similar processes coupled with roll
forming and stretch bending. Roll forming is a continuous process in which
coiled steel is passed through a series of rollers which progressively form the
metal into a consistently shaped section. When viewed from one end, the profile
may be u-shaped or v-shaped for glass channels and roof rails. More complex
shapes are processed for upper door profiles. Stretch bending involves clamping
a length of the rolled profile at numerous points and then twisting or bending
the metal to form contoured surfaces, such as door frames. Door and body
components also require welding, grinding and polishing operations to provide a
smooth finish.
Cables are manufactured using a variety of processes, including plastic
injection molding, extrusion, wire flattening, spring making and zinc
diecasting. Wire is purchased from outside suppliers and then formed into
contra-twisted layers on tubular stranders and bunching machines to produce up
to 19-wire stranded cable. Corrosion resistance is provided by a proprietary,
ceramic coating applied during the stranding process. The cable then is
plastic-coated by an extrusion process to provide a smooth, low coefficient
surface that results in high efficiency and durability. Conduit is then produced
by flattening and coiling wire, which is then extruded with a protective
coating. Proprietary strand and conduit cutting machines enable efficient
processing. Assembly operations are arranged in cells to minimize inventory,
improve quality, reduce scrap, improve productivity and enhance employee
involvement. The cables are assembled with various attachments and end fittings
that allow the customer to install the cables to the appropriate mating
mechanisms.
Our window systems broadly include two categories of products: mechanically
framed glass products and molded framed glass. Mechanically framed glass
products are produced by putting glass panes through a series of value-added
processes, which include adding handles, hinges, aluminum and steel based edge
frame assemblies, electrical connectors and fasteners. The production of molded
framed glass products involves two primary molding media: RIM (Reaction
Injection Molding: Polyurethane) and PVC (Poly Vinyl Chloride). Both media
provide a "surround" to the glass panes that incorporates the styling, sealing
and mechanical attachment features of the product. Our ability to utilize either
media provides OEMs with the maximum advantage in terms of cost, styling
imperatives and robustness. The glass panes used in the production of our window
systems are purchased from outside suppliers.
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<PAGE>
Our injection molded plastic parts are manufactured through injection
molding of a variety of resins on molding machines of various sizes and types.
Headlamp and taillamp housings are also manufactured through the injection
molding process. The interior of the housings are then coated and at times
vacuum metalized to obtain the proper reflective qualities. Lenses are added to
the housings on a semi-automated production line.
We utilize frequent communication meetings at all levels of manufacturing to
provide training and instruction as well as to assure a cohesive, focused effort
toward common goals. We encourage employee involvement in all production
activity and view such involvement as a key element in our success. We also
aggressively pursue involvement from our suppliers, which is necessary to assure
a consistent flow of raw materials and components on a timely basis with
consistently high quality. We utilize our component suppliers where practical in
the design and prototype stages of new product development to facilitate the
most comprehensive, state-of-the-art designs available. We have made substantial
investments in manufacturing technology and product design capability to support
our products, including modern manufacturing equipment, fineblanking,
sophisticated CAD systems and highly-trained engineering personnel. These
advanced capabilities have helped to further reduce scrap rates, ensure superior
product quality and increase efficiency.
The automotive industry has adopted a quality rating system known as
QS-9000, a rigorous inspection of a supplier's facilities and operating systems
performed by independent certified auditors. Certification and on-going
maintenance of certification is mandatory for future supply consideration. Dura
has received QS-9000 certification at all of its facilities, except its
operations in France, which is scheduled for certification in 1999. Excel has
received QS-9000 certification at all of its automotive facilities, except
Stockton, IL, while all of its non-automotive facilities have an ISO 9001 or ISO
9002 certification, and Adwest has received QS-9000 certification at all of its
facilities except Rearsby, U.K., Cauvigny and Boynes, France and Lippstadt,
Germany.
Our plants have been recognized by our customers with various awards, such
as the Daimler/ Chrysler Gold Pentastar Award, GM Target for Excellence, Nummi
Delivery Performance Award and the Isuzu Quality Achievement Award. We have also
received an "A" rating at Peugeot and Renault. We have received Ford Q-1
certification at all facilities shipping current model Ford products.
COMPETITION
We operate in a highly competitive environment. We principally compete for
new business at the beginning of the development of new models and upon the
redesign of existing models. New model development generally begins two to five
years before marketing of such models to the public. Once a producer has been
designated to supply parts for a new program, an OEM usually will continue to
purchase those parts from the designated producer for the life of the program,
although not necessarily for a redesign. Competitive factors in the market for
our products include product quality and reliability, cost, timely delivery,
technical expertise and development capability, new product innovation and
customer service. The number of our competitors has decreased due to the
supplier consolidation resulting from changing OEM policies. Some of our
competitors have substantial size, scale and financial resources.
In addition, there is substantial and continuing pressure from the major
OEMs to reduce costs, including the cost of products purchased from outside
suppliers such as Dura. If we are unable to generate sufficient production cost
savings in the future to offset price reductions, our gross margin could be
adversely affected.
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<PAGE>
Set forth below is a brief summary of our most significant competitors in
each of our principal product categories:
AUTOMOTIVE CABLES. Our primary competitors in automotive cables are
Teleflex Incorporated ("Teleflex") and Hi-Lex Corporation ("Hi-Lex") in North
America and Kuester & Co. GmbH, Ficosa International, S.A. ("Ficosa") and Sila
Holding Industriale ("Sila") in Europe.
PARKING BRAKES. Our primary competitors in parking brakes are Ventra Group,
Inc. and Magna International Inc. ("Magna") in North America and Scharwaechter
GmbH & Co. ("Edscha"), Ficosa and Aries Industries in Europe.
TRANSMISSION SHIFTERS. Our primary competitors in transmission shifter
mechanisms is Grand Haven Stamped Products in North America and Teleflex,
Ficosa, and Sila in Europe.
WINDOW SYSTEMS. Our primary competitors in window systems are Donnelly
Corporation, Libbey-Owens Ford Co., PPG Inc. and Guardian Industries, Inc. in
North America and Sekurit and Pilkington in Europe.
DOOR SYSTEMS. Our primary competitors in door systems are Meritor
Automotive, Inc. ("Meritor"), Peregrine Inc. and Hi-Lex in North America and
Brose Fahrzeagteile Glaswerke GmbH & Co. ("Brose"), Meritor and Magna in Europe.
SEATING SYSTEMS. Our primary competitors in seating systems are Lear
Corporation and Johnson Controls, Inc. in North America and Bertraud Faure,
Brose, C. Rob Hammerstein GmbH & Co. KG, Lear Corporation and Keiper Recaro GmbH
& Co. in Europe.
RV/MT/HT PRODUCTS. Our primary competitors in RV/MT/HT products include
Suburban Manufacturing Company, Maytag Appliances/Magic Chef RV Products, The
Hammerblow Corporation and Hehr International, Inc.
SUPPLIERS AND RAW MATERIALS
Our principal raw materials include: (1) coil steel and resin in mechanism
production, (2) glass in window systems, (3) metal wire and resin in cable
production, and (4) resins and lighting components in automotive lighting
production. We do not manufacture or sell primary glass. The types of steel we
purchase include hot and cold rolled, galvanized, organically coated and
aluminized steel. In general, the wire used by us is produced from steel with
many of the same characteristics with the exception that it has a higher carbon
content. We utilize plastic resin to produce the protective coating for our
cables and to produce transmission shifter components, as well as our automotive
lighting and injection molded plastic parts. We employ just-in-time
manufacturing and sourcing systems enabling us to meet customer requirements for
faster deliveries while minimizing our need to carry significant inventory
levels. We have not experienced any significant shortages of raw materials and
normally do not carry inventories of raw materials or finished products in
excess of those reasonably required to meet production and shipping schedules.
We typically negotiate blanket purchase orders or 12-month supply agreements
with integrated steel suppliers, mini-mills and service centers that have
demonstrated timely delivery, quality steel and competitive prices. These
relationships allow us to order precise quantities and types of steel for
delivery on short notice, thereby permitting us to maintain low inventories. In
addition, we occasionally "spot buy" steel from service centers to meet customer
demand, engineering changes or new part tool trials.
Other raw materials purchased by us include dies, motors, fasteners,
springs, rivets and rubber products, all of which are available from numerous
sources.
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<PAGE>
EMPLOYEES
As of March 31, 1999, Dura had approximately 21,000 employees. Overall,
approximately 24% of our employees on a combined basis are salaried and the
balance are hourly.
Approximately 39% of our employees are currently covered by collective
bargaining agreements as follows:
<TABLE>
<CAPTION>
LOCATION COLLECTIVE BARGAINING AGREEMENT EXPIRATION
- --------------------------- --------------------------------------------------------------- ------------------
<S> <C> <C>
Australia.................. Australian Metals Workers No term
Brazil..................... Sindicato dos Metalugicos do ABC No term
Canada..................... CAW June 1999
September 1999
June 2000
Czech Republic............. KOVO December 1999
France..................... Confederation Francaise de L' Encadrement December 1999
Confederation Francaise Democratique du Travail December 1999
Germany.................... IG-Metall February 2000
March 2000
Mexico..................... Confederation Travajadores Mexico Annually
Portugal................... Sindicato dos trabalhadores da Industria Metalurgica e June 1999
Metalomecanica do distrito da Guarda
Spain...................... Comisiones Oberera December 1999
United Kingdom............. Managerial Scientific & Financial June 1999
March 2000
AEEU July 2000
December 2000
AUEW June 1999
TGWU June 1999
United States.............. UAW May 1999*
April 2000
June 2000
December 2000
June 2001
September 2002
Universal Employees December 2000
United Paper Workers June 1999
Teamsters December 2000
Independent April 2001
</TABLE>
- ------------------------
* Tentative agreement reached
Although we believe that our relationship with our unionized employees is
good, there can be no assurance that we will be able to negotiate new agreements
on favorable terms. In the event that we are unsuccessful in negotiating new
agreements, these facilities could be subject to work stoppages, which would
have a material adverse effect on our operations.
PROPERTIES
Our corporate office is located in Minneapolis, Minnesota and occupies
approximately 5,700 square feet. Our operating headquarters is located in
Rochester Hills, Michigan and occupies approximately 65,000 square feet, a
portion of which is used for product development activities. Both of these
facilities are leased.
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<PAGE>
We believe that the productive capacity and utilization of our facilities is
sufficient to allow us to conduct our operations in accordance with our business
strategy. All of our owned facilities are subject to liens under the new credit
facility. The following table shows the principal facilities of Dura, Excel and
Adwest as of December 31, 1998, as well as the total number of facilities on a
combined basis:
<TABLE>
<CAPTION>
NUMBER OF SITES
--------------------------------------------------
<S> <C> <C> <C> <C>
COUNTRY DURA EXCEL ADWEST TOTAL
- --------------------------------------------------------------- ----- ----- ----------- -----
United States.................................................. 19 22 1 42
Canada......................................................... 4 -- -- 4
United Kingdom (1)............................................. 3 1 5 9
Germany........................................................ 4 3 3 10
France......................................................... 4 -- 4 8
Portugal....................................................... -- 2 -- 2
Spain.......................................................... 1 1 3 5
Mexico......................................................... 1 1 -- 2
Australia...................................................... 1 -- -- 1
Brazil (2)..................................................... 2 -- -- 2
India (3)...................................................... -- -- 1 1
Czech Republic................................................. -- 1 -- 1
-- -- -- --
Total.......................................................... 39 31 17 87
-- -- -- --
-- -- -- --
</TABLE>
- ------------------------
(1) One of Adwest's facilities located in the U.K. is owned by a corporation in
which Nippon Cable Systems Inc. (TSK) owns a 35% equity interest.
(2) As a result of the Excel Acquisition, Dura will hold a 51% equity interest
of Pollone, S.A., a Brazilian auto supplier that operates through one
facility located in Sao Paulo, Brazil.
(3) Facility is owned by a joint venture in which we hold a 49% ownership
interest.
Our manufacturing facilities have a combined square footage in excess of
9,600,000, approximately 72% of which is owned and approximately 28% is leased.
Nine of our U.S. facilities, which encompass 630,000 square feet on a combined
basis, are dedicated to producing our RV/MT/HT products. To increase efficiency,
we expect to consolidate the operations of certain of our manufacturing
facilities and technical centers over the next twelve months.
In some cases, several of our manufacturing sites, technical centers and/or
product development centers and sales activity offices are located at a single
multiple-purpose site. As of December 31, 1998, on a combined basis, we had an
aggregate of 15 technical centers, with 6 located in the United States, 8
located in Europe and 1 in Australia.
We believe that substantially all of our property and equipment is in good
condition and that we have sufficient capacity to meet our current manufacturing
needs. Utilization of our facilities varies with North American and European
light vehicle production and general economic conditions in such regions.
LEGAL PROCEEDINGS
We face an inherent business risk of exposure to product liability claims in
the event that the failure of our products results in personal injury or death,
and there can be no assurance that we will not experience any material product
liability losses in the future. In addition, if any of the products we have
designed prove to be defective, we may be required to participate in a recall
involving such products.
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<PAGE>
In late 1994, Ford issued a recall of a series of manual transmission Ford
F-Series pickups to repair the self-adjust parking brakes originally
manufactured by the Brake and Cable Business. Ford had received several reports
that the brakes failed. Pursuant to a letter agreement entered into in
connection with our acquisition of the Brake and Cable Business in August 1994,
we agreed to reimburse Ford for up to $6.0 million of Ford's costs of the
recall. We have reimbursed Ford for the full amount under this agreement. We are
also involved in a product recall relating to the same issue with respect to the
Ford Mondeo in Europe. We have agreed to pay 50% of the costs of that recall not
to exceed $1.0 million, which payments totaled $0.4 million as of December 31,
1998.
The type of alleged failures that prompted the F-Series recalls have also
led to a number of claims and lawsuits filed against Ford, one of which
culminated in a July 1998 award of punitive damages against Ford of more than
$151 million (which has subsequently been reduced on appeal to $69 million) and
Ford is appealing the decision. We may be subject to claims brought directly
against us by injured occupants of Ford vehicles and to claims for contribution
or indemnification asserted by Ford. The agreement relating to the acquisition
of the Brake and Cable Business provided that we are liable for claims arising
out of accidents that take place on or after August 31, 1994 and that we will be
liable for other claims only to the extent any losses by Alkin relating to such
claims are not paid by Alkin's insurance policies (either because they are not
over the deductible amount, because Alkin's policy limits have been exceeded or
because they are not covered by Alkin's insurance policies for other reasons).
To date, two cases have been brought directly against us or Alkin relating to
personal injury claims, and Ford has received over 400 claims (generally for
property damage) relating to alleged defects in the self-adjust parking brakes.
The claims that purport to seek recovery for personal injury allegedly as a
result of the recall condition, with several exceptions, have generally involved
relatively minor injuries, suffered principally while occupants were trying to
stop or jump out of rolling vehicles. Ford has maintained that Dura or Alkin is
responsible for all damages or liabilities arising out of these claims. We
dispute this position. As of December 31, 1998, Ford had tendered its defense of
approximately 30 such claims to Dura and Alkin, and indicated that it would look
to Dura and Alkin for indemnification were Ford ultimately found to be liable
and required to make any payments relating to such claims. Dura and Alkin have
submitted these claims to their insurance carriers. We have attempted to work
with Ford to address the claims arising from the self-adjust parking brakes
originally manufactured by the Brake and Cable Business and do not believe that
these claims have adversely affected our business relationship with Ford.
From time to time, in the ordinary course of our business, we receive notice
from a customer that a product may not be properly functioning. For example, in
November 1998, we were notified by Ford of an alleged failure of one of Dura's
cables used to control the speed control on certain of Ford's vehicles. In March
1999, we were notified by Ford of its decision to institute a recall of certain
of its vehicles, including Explorers, Mountaineers, Rangers, Mustangs and
F-Series pickups, relating to the speed control cable. Ford has reported that
certain of such vehicles could be equipped with a speed control cable that could
interfere with the speed control pulley and thus result in a "stuck" throttle.
In June 1999, Ford notified us that as many as 987,839 vehicles could be
affected at an alleged cost of up to $60 per vehicle. Based upon our tests and
investigations to date, we do not believe that our product is responsible for
the problems associated with the speed control unit. To date, we have not been
provided with any documents from Ford that support its allegations.
We have also received notices from GM, Renault and Audi with respect to
alleged failures of products that we have supplied to them. In all of these
cases, it is possible that such manufacturers will seek contribution from us
with respect to the costs they incur if recalls are undertaken or for costs
associated with possible repairs. Based upon the information available to us, we
do not expect any of these matters either individually or collectively to result
in payments that will have a material effect on our results of operations and
financial position.
In early November 1996, we were served with a lawsuit brought by affiliates
of AIG, our excess insurance carrier, in Toronto, Canada seeking a declaratory
judgment that the umbrella and excess
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liability policies that it had issued to Onex do not provide coverage in
connection with allegedly defective self-adjust parking brakes manufactured by
Alkin prior to August 31, 1994. The AIG policies at issue provided (a) the first
layer of excess coverage (beyond our $3 million primary policy per year) for
claims arising from August 31, 1994 to April 1, 1996 in the amount of $20
million per year, and (b) an additional layer of excess coverage at $33 to $53
million per year. In principal part, the AIG affiliates claim that the policies
do not provide coverage with respect to products manufactured prior to August
31, 1994 or liabilities assumed by us pursuant to purchase agreements. The AIG
affiliates also claim that the policies should be voided with respect to
self-adjust parking brake claims for inadequate disclosure at the time the
policies were applied for. Dura and Onex dispute the allegations of the Ontario
lawsuit and have filed a counterclaim against the AIG affiliates for breach of
contract.
We believe that we maintain adequate insurance, including product liability
coverage, to cover the claims described above. We have also established reserves
in amounts we believe adequate to cover any adverse judgments. However, any
adverse judgment in excess of our insurance coverage and such reserves could
result in a material adverse effect to our results of operations and financial
condition.
In February 1998, we were contacted by an attorney for the Lemelson Medical,
Education & Research Foundation Limited Partnership (the "Foundation"), alleging
that our operations implicate the fields of machine vision, gauging, location
analysis, flaw detection, verification and recognition in a manner that
allegedly infringes the Foundation's patents. Attorneys for the Foundation have
threatened to initiate litigation against us unless we agree to pay royalty fees
pursuant to a negotiated license agreement. Our investigation of this matter is
still in its preliminary stages. In mid 1998, Excel received a similar notice.
We have received notice from an attorney representing Teleflex alleging that
a transmission shifter cable manufactured by us in Europe infringes a U.S.
patent held by Teleflex. We are currently in the process of investigating this
matter and believe, based on the information available at this time, that this
matter will not have a material adverse effect on our operations.
ENVIRONMENTAL MATTERS
We are subject to federal, state, local and foreign environmental and
occupational health and safety laws and regulations. While we devote resources
designed to maintaining compliance with these requirements, we cannot assure you
that we operate at all times in complete compliance with all such requirements.
We could be subject to potentially significant fines and penalties for any
noncompliance that may occur. Although we have made and will continue to make
capital and other expenditures to comply with environmental requirements, we do
not expect to incur material capital expenditures for environmental controls in
1999 or 2000.
Some of our operations generate hazardous substances. Like all
manufacturers, if a release of hazardous substances occurs or has occurred at or
from any of our current or former properties or at a landfill or another
location where we have disposed of wastes, we may be held liable for the
contamination, and the amount of such liability could be material.
In 1995, the Michigan Department of Environmental Quality ("MDEQ"),
requested that we and Wickes conduct an environmental investigation at and
around our Mancelona, Michigan facility, which we acquired from Wickes in 1990.
The investigation detected trichloroethylene ("TCE") in groundwater at the
facility and offsite locations. We do not believe we used TCE since we acquired
the Mancelona facility, although TCE may have been used by prior operators. We
have arranged and paid for the sampling of several residential drinking water
wells in the area and for the replacement of drinking water wells found to
contain TCE above drinking water standards. Sampling of residential wells, and
replacement of such wells, when necessary, will continue. We will likely incur
additional costs to further investigate, monitor or remediate the contamination,
and possibly to provide additional alternative drinking water supplies. Such
costs may be material. In 1998, a ski resort in the vicinity wrote to us and
asserted that we are liable for the cost it will incur to install a water supply
system, which the ski resort
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claims is necessitated by the presence of TCE in groundwater in the area. We
responded with a letter denying all liability. We are seeking a negotiated
resolution of the ski resort's potential claims.
The Mancelona groundwater contamination matter is subject to an indemnity
from Wickes. In connection with our acquisition of certain assets from Wickes in
1990, Wickes agreed to indemnify us with respect to certain environmental
liabilities associated with Wickes' operation of the subject facilities subject
to a $750,000 basket (which has been reached), up to a $2.5 million cap. We will
be obligated to indemnify Wickes with respect to any liabilities above such cap.
Wickes has acknowledged that we made a timely and adequate claim for
indemnification with respect to the Mancelona matter, and has been paying
indemnification claims relating to the Mancelona matter, subject to a
reservation of rights.
In 1998, we acquired Universal. The seller in the Universal transaction
agreed to indemnify us for environmental liabilities arising from the operation
of the acquired facilities prior to the acquisition. Following the acquisition,
pursuant to the indemnity, the seller continued to address certain environmental
matters, including the cleanup of TCE-contaminated soil at our Butler, Indiana
facility. In 1998, the seller filed for reorganization under the federal
bankruptcy laws and appears to have ceased performing its obligations under the
indemnity. In March 1999, the sellers requested bankruptcy court approval to
reject their contractual indemnity obligations to us. Subject to our right to
seek repayment in the bankruptcy proceeding, it is likely that we will be
responsible for completing the cleanup at our Butler facility. Although we
cannot assure you, based on estimates provided by the environmental consultant
that has been performing the cleanup, we do not expect the cost to complete the
cleanup to be material.
In 1998, Excel entered into a partial consent decree to settle its liability
for past costs at the Main Street Well Field Site in Elkhart, Indiana, where TCE
was found in a municipal well field near Excel's Elkhart facility. Excel is one
of several potentially responsible parties involved at the site. Under the
settlement, Excel has a continuing payment obligation for operation and
maintenance of a groundwater treatment system and for a soil vapor extraction
system. These obligations will likely continue for several years. The annual
cost to operate these systems is not material. In addition, Excel expects to
receive certain payments from other parties involved at the site.
We are involved as a potentially responsible party at several waste disposal
sites. Although the environmental laws provide for joint and several liability
at such sites, liability is typically allocated among the viable parties
involved. We believe that we have no liability at some of these sites, and that
adequate reserves are in place for current estimates of our share of liability
at the other sites. We cannot assure you, however, that our liability at these
sites will not materially exceed the current amount of our reserves.
In 1997, Adwest acquired Heidemann. Areas of contamination from historical
operations exist at the Heidemann facilities located in Rotenburg, Einbeck, and
Kohler, Germany. We are currently operating treatment systems to clean up
contamination at the Rotenburg and the two Einbeck facilities and are monitoring
groundwater contamination at the Kohler facility. When Adwest acquired these
facilities, the seller posted a DM 5 million escrow, in part, to cover
environmental claims filed during an 18-month period following the acquisition.
Adwest filed environmental claims totaling DM 2 million against the escrow for
expenses to remediate contamination at the Rotenburg and Einbeck facilities and
upgrade the wastewater treatment system at the Rotenburg facility. We expect to
negotiate with the seller in the near future regarding the amount of recovery
for these environmental claims. We may incur costs beyond the amount recovered
from the escrow to continue to operate and maintain the treatment systems, and
to perform additional investigation and clean up, if necessary. Based on current
information, such costs are not expected to be material. However, should
additional or more extensive contamination be discovered, we may incur material
expenditures to address such contamination.
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MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information with respect to our
Directors and executive officers as of June 15, 1999:
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL POSITION(S)
- ----------------------------------------------------- --- -----------------------------------------------------
<S> <C> <C>
S. A. Johnson........................................ 59 Chairman and Director
James O. Futterknecht, Jr............................ 52 Vice Chairman and Director
J. Richard Jones..................................... 57 Vice Chairman and Director
Karl F. Storrie...................................... 61 President, Chief Executive Officer and Director
David R. Bovee....................................... 49 Vice President
Joe A. Bubenzer...................................... 47 Senior Vice President
Mervyn J. Edgar...................................... 50 Vice President
Stephen E. K. Graham................................. 41 Vice President and Chief Financial Officer
Robert R. Hibbs...................................... 37 Vice President and Director
John J. Knappenberger................................ 52 Vice President
Milton D. Kniss...................................... 51 Vice President
Michael C. Paquette.................................. 57 Vice President
Robert A. Pickering.................................. 56 Vice President
Scott D. Rued........................................ 42 Vice President
Robert E. Brooker, Jr................................ 62 Director
W. H. Clement........................................ 71 Director
Jack K. Edwards...................................... 55 Director
John C. Jorgensen.................................... 61 Director
William L. (Barry) Orscheln.......................... 48 Director
Eric J. Rosen........................................ 38 Director
Ralph R. Whitney, Jr................................. 64 Director
</TABLE>
S. A. JOHNSON has served as Chairman and a Director of Dura since November
1990. Mr. Johnson is the founder, Chief Executive Officer and President of
Hidden Creek. Mr. Johnson is also the President of J2R. Prior to forming Hidden
Creek, Mr. Johnson served from 1985 to 1989 as Chief Operating Officer of
Pentair, Inc., a diversified industrial company. From 1981 to 1985, Mr. Johnson
was President and Chief Executive Officer of Onan Corp., a diversified
manufacturer of electrical generating equipment and engines for commercial,
defense and industrial markets. Mr. Johnson served as Chairman and a director of
Automotive Industries Holding, Inc., a supplier of interior trim components to
the automotive industry, from May 1990 to August 1995. Mr. Johnson is also
Chairman and a director of Tower Automotive, Inc., a manufacturer of engineered
metal stampings and assemblies for the automotive industry.
JAMES O. FUTTERKNECHT, JR., has served as Director of Dura since May 1999.
Mr. Futterknecht joined Excel in 1970, was Vice President--Corporate Sales from
1976 until 1984, was Vice President-- Automotive Products from 1984 until 1987,
was Vice President--Automotive Sales and Engineering from 1987 to 1990 and was
Executive Vice President from 1990 to 1992. He was elected as President and
Chief Operating Officer and was appointed as an Excel director in 1992. In 1995,
he was elected to the additional offices of Chairman of the Board and Chief
Executive Officer. Mr. Futterknecht is also a director of Control Devices, Inc.
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J. RICHARD JONES has served as Vice Chairman and a Director of Dura since
May 1998. Prior to the acquisition of Trident, Mr. Jones served as Group
President and Chief Executive Officer of Trident's predecessor from June 1992
until December 1997 and as Chairman, Chief Executive Officer and Director of
Trident from December 1997 until April 1998. From 1988 to June 1992, he served
as President and Chief Operating Officer of the Process Automation Group of FKI
(formerly known as the Process Control Group of FKI). In 1990, while serving in
such capacity, he assumed the responsibility for the reorganization of the FKI
Automotive Group. Prior thereto, Mr. Jones was Division President of Bristol
Babcock, Inc., a process control company involved in the design and manufacture
of telemetry equipment for the gas and water industry, and held a variety of
positions in engineering, vehicular systems and operational management for the
Varity Corporation.
KARL F. STORRIE has served as President, Chief Executive Officer and a
Director of Dura since March 1991. Prior to joining Dura and from 1986, Mr.
Storrie was Group President of a number of aerospace manufacturing companies
owned by Coltec Industries, a multi-divisional public corporation. Prior to
becoming a Group President, Mr. Storrie was a Division President of two
aerospace design and manufacturing companies for Coltec Industries from 1981 to
1986. During his thirty-five year career, Mr. Storrie has held a variety of
positions in technical and operations management. Mr. Storrie is also a director
of Argo-Tech Corporation, a manufacturer of aircraft fuel, boost and transfer
pumps.
DAVID R. BOVEE has served as Vice President of Dura since November 1990 and
Chief Financial Officer of Dura from November 1990 to May 1997. Mr. Bovee also
serves as Assistant Secretary for Dura. Prior to joining Dura, Mr. Bovee served
as Vice President at Wickes in its Automotive Group from 1987 to 1990.
JOE A. BUBENZER has had responsibility for European operations since June
1997. From October 1993 to May 1997, Mr. Bubenzer served as Vice President
Sales/Engineering since joining Dura in October 1993 and was named Senior Vice
President in 1995. Prior to joining Dura in October 1993, Mr. Bubenzer filled
various executive positions with ITT Automotive, a supplier of components to the
automotive industry, where he worked for six years, and, prior to such time, at
GM, where he worked for 14 years.
MERVYN J. EDGAR has served as Vice President of Dura since May 1998. Prior
to the acquisition of Trident, Mr. Edgar served as General Manager of Trident
from 1990 to May 1998 and as Manufacturing Manager of FKI Dominion Controls
Division in Stratford, Ontario and Milan, Tennessee from 1989 to 1990.
STEPHEN E. K. GRAHAM has served as Vice President and Chief Financial
Officer since joining Dura in June 1997. From 1996 to May 1997, Mr. Graham was
Chief Financial Officer of Cambridge Industries, Inc., a North American supplier
of components to the automotive industry. From 1994 to 1996, Mr. Graham was
Chief Financial Officer of Truck Components, Inc., a supplier of components to
the automotive and heavy truck industry. From 1989 to 1994, Mr. Graham held
several positions with Magna International, Inc., an automotive components
supplier.
ROBERT R. HIBBS has served as a Director of Dura since August 1994 and as
Vice President since November 1990. Mr. Hibbs, a stockholder of J2R, has also
served as Vice President-Corporate Development of Hidden Creek since January
1994 and as its Director from April 1990 through December 1993. Prior thereto,
Mr. Hibbs worked in the corporate finance area with Drexel Burnham Lambert, an
investment banking firm, in New York from 1988 to 1990.
JOHN J. KNAPPENBERGER has served as Vice President of Quality and Materials
of Dura since December 1995. Mr. Knappenberger assumed the responsibility for
sales and engineering in June 1997. Prior to joining Dura, Mr. Knappenberger was
Director of Quality for Carrier Corporation's North American Operations,
manufacturers of heating and air conditioning systems, from February 1992. From
1985 to 1991, Mr. Knappenberger was employed by TRW Inc., a supplier of
components to the
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automotive industry, beginning as Director of Quality in 1985 for the Steering
and Suspension Division and becoming Vice President, Quality for the Automotive
Sector in 1990.
MILTON D. KNISS has served as Vice President of Operations of Dura since
January 1994. From April 1991 until January 1994, Mr. Kniss served as Director
of Michigan Operations for Dura. Mr. Kniss joined the predecessor in 1981 as a
Divisional Purchasing Manager, served as Plant Manager of East Jordan, Michigan
from 1982 until 1986, and Plant Manager of Gordonsville, Tennessee until 1991.
MICHAEL C. PAQUETTE has served as Vice President of Human Resources of Dura
since March 1999. From 1995 to February 1999, Mr. Paquette was Vice President of
Corporate Human Resources of Excel. From 1983 to 1995, Mr. Paquette was Vice
President of Human Resources for the Power Generation Group of Cummins Engine
Company, a manufacturer of diesel engines and related components.
ROBERT A. PICKERING has served as Vice President of Dura since March 1999,
with responsibility for recreational and heavy vehicle and mass transit
operations. From December 1996 to March 1999, Mr. Pickering was Vice President
of Excel. From 1989 to 1996, Mr. Pickering was employed by Atwood Industries,
serving as Vice President of Manufacturing of Atwood Automotive Division from
1989 to 1991 and President of Atwood Mobile Products from 1991 to 1996. Prior to
joining Atwood Industries, Mr. Pickering's employment included seven years with
Tech Form Industries, an automotive OEM supplier, six years with Volkswagen of
America, and ten years with the Chevrolet Division of General Motors.
SCOTT D. RUED has served as Vice President of Dura since November 1990. Mr.
Rued, a stockholder of J2R, has also served as Executive Vice President and
Chief Financial Officer of Hidden Creek since January 1994 and served as its
Vice President Finance and Corporate Development from June 1989 through 1993.
Mr. Rued has served as Vice President, Corporate Development and a director of
Tower Automotive, Inc. since April 1993. Mr. Rued served as Vice President,
Chief Financial Officer and a director of Automotive Industries Holding, Inc.
from April 1990 to August 1995. Mr. Rued is also a director of The Rottlund
Company, Inc., a corporation engaged in the development and sale of residential
real estate.
ROBERT E. BROOKER, JR. has served as a Director of Dura since September
1996. From 1993 to 1995, Mr. Brooker was President and Chief Operating Officer
of Connell Limited Partnership. Prior thereto, Mr. Brooker served six years as
President and Chief Executive Officer at Lord Corporation. Mr. Brooker is also a
director of Full Circle Investments, a private investment company.
W. H. CLEMENT has served as a Director of Dura since 1993. Mr. Clement
serves as a consultant to Hidden Creek. From 1975 until May 1994, Mr. Clement
served as Chief Executive Officer or as President of Automotive Industries
Holding, Inc. and its predecessor. Mr. Clement is also a director of F&M
National Corporation, a bank holding company, and Tower Automotive, Inc.
JACK K. EDWARDS has served as a Director of Dura since December 1996. Mr.
Edwards joined Cummins Engine Co., Inc. in 1972 and has served as Executive Vice
President and Group President-- Power Generation and International since March
1996. Mr. Edwards is also a director of David J. Joseph Co., a processor and
trader of steel scrap.
JOHN C. JORGENSEN has served as a director of Dura since May 1998. Mr.
Jorgensen has served as President of ORTECH CO. since March 1992, Senior Vice
President of Manufacturing for Orscheln Management Co. since April 1996 and
Executive Vice President of Orscheln Products L.L.C. since March 1992. Prior to
1992, Mr. Jorgensen was responsible for the operations at Orscheln Co.
Manufacturing.
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<PAGE>
WILLIAM L. (BARRY) ORSCHELN has served as a Director of Dura since August
1994. Mr. Orscheln has also served as President of Alkin Co. (and its
predecessors) since March 1994, as President of Orscheln Farm and Home since
September 1995, as President of Orscheln Properties Co., L.L.C., since October
1994 and as President of Orscheln Management Co. since December 1987. Mr.
Orscheln has served as a director of UMB Bank, a bank holding company, since
July 1989 and as a director of Orscheln Management Co. since 1987.
ERIC J. ROSEN has served as a Director of Dura since January 1995. Mr. Rosen
is Managing Director of Onex Investment Corp., a diversified industrial
corporation and an affiliate of Onex, and served as a Vice President of Onex
Investment Corp. from 1989 to February 1994. Prior thereto, Mr. Rosen worked in
the merchant banking group at Kidder, Peabody & Co. Incorporated from 1987 to
1989. Mr. Rosen is also a director of Tower Automotive, Inc.
RALPH R. WHITNEY, JR. has served as a Director of Dura since May 1999. Mr.
Whitney was a director of Excel from 1983 to March 1999 and was Chairman of the
Board from 1983 to 1985. Mr. Whitney has been a principal of Hammond, Kennedy,
Whitney & Company, Inc., a New York, New York financial intermediary and private
investment banking firm, since 1971. Mr. Whitney is also a director of Adage,
Inc., Control Devices, Inc., IFR Systems, Inc., Selas Corporation of America and
Baldwin Technologies, Inc.
The Dura board currently has twelve directors. Each director is elected to
serve until the next annual meeting of stockholders or until a successor is duly
elected and qualified. Executive officers of Dura are duly elected by the board
to serve until their respective successors are elected and qualified. There are
no family relationships between any of the directors or executive officers of
Dura.
There are three committees of the board: the executive committee, the
compensation committee and the audit committee. The executive committee, which
is currently composed of Messrs. Johnson, Storrie and Orscheln, exercises the
powers of the board during intervals between board meetings and acts as an
advisory body to the board by reviewing various matters prior to their
submission to the board. The compensation committee, which is currently composed
of Messrs. Clement, Brooker and Edwards, reviews and makes recommendations to
the board regarding salaries, compensation and benefits of executive officers
and key employees of Dura and grants all options to purchase DASI's Class A
common stock. The audit committee is currently composed of Messrs. Hibbs, Rosen
and Whitney. Among other duties, the audit committee reviews the internal and
external financial reporting of Dura, reviews the scope of the independent audit
and considers comments by the auditors regarding internal controls and
accounting procedures and management's response to these comments. Dura does not
have a nominating committee.
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EXECUTIVE COMPENSATION
The following table sets forth compensation packages for the years ended
December 31, 1998, 1997 and 1996 for Dura's chief executive officer and the four
other executive officers of Dura who were the most highly compensated officers
of Dura for the year ended December 31, 1998. We refer to these five individuals
as our "named executive officers."
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------- -------------
NAME AND SALARY BONUS OTHER ANNUAL OPTIONS ALL OTHER
PRINCIPAL POSITION YEAR ($)(1) ($)(1) COMPENSATION GRANTED (#) COMPENSATION ($) (3)
- ------------------------------------ --------- ---------- ---------- ------------- ------------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
Karl F. Storrie..................... 1998 $ 400,000 $ 550,000 (2) 90,000 $ 6,906
President and Chief Executive 1997 345,833 425,000 (2) 30,000 6,856
Officer 1996 294,168 400,000 (2) 80,000 3,725
Joe A. Bubenzer..................... 1998 239,000 160,000 -- 30,000 5,322
Senior Vice President 1997 187,083 150,000 (2) 12,500 5,322
1996 168,000 140,000 (2) 10,000 2,637
Milton D. Kniss..................... 1998 200,000 190,000 (2) 37,500 5,724
Vice President 1997 167,917 150,000 (2) 12,500 5,724
1996 144,000 135,000 (2) 10,000 4,512
John J. Knappenberger............... 1998 175,000 130,000 (2) 30,000 5,664
Vice President (4) 1997 147,500 120,000 (2) 10,000 5,614
1996 135,000 110,000 47,156(4) 27,373 3,375
Stephen E. K. Graham................ 1998 175,000 125,000 (2) 30,000 5,082
Vice President and Chief Financial 1997 92,548 40,000 (2) 25,000 5,082
Officer(5)
</TABLE>
- ------------------------------
(1) Includes amounts deferred by employees under Dura's 401(k) employee savings
plan, pursuant to Section 401(k) of the Internal Revenue Code.
(2) None of the benefits and perquisites paid to each of the named executive
officers exceeded the lesser of $50,000 or 10% of the total annual salary
and bonus received by such named executive officers.
(3) The amounts disclosed in this column include amounts contributed by Dura to
its 401(k) employees savings plan and profit sharing plan and dollar value
of premiums paid by Dura for term life insurance on behalf of the named
executive officers.
(4) Includes $39,263 for reimbursement of relocation costs.
(5) Mr. Graham became an employee of Dura in June 1997.
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<PAGE>
OPTION GRANT TABLE
The following table shows all grants of options to acquire shares of DASI
Class A common stock granted to the named executive officers under the 1996 Key
Employee Stock Option Plan (the "1996 Plan") and the 1998 Stock Incentive (the
"1998 Plan").
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
NUMBER OF AT ASSUMED ANNUAL RATES OF
SECURITIES % OF TOTAL STOCK PRICE APPRECIATION
UNDERLYING OPTIONS GRANTED EXERCISE FOR OPTION TERM (2)
OPTIONS TO EMPLOYEES PRICE EXPIRATION --------------------------
NAME GRANTED (#) (1) IN FISCAL YEAR (PER SHARE) DATE 5% 10%
- ---------------------------------- --------------- ------------------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
K.F. Storrie...................... 90,000 14.3% $ 29.00 12/17/08 $ 1,641,415 $ 4,159,668
J.A. Bubenzer..................... 30,000 4.8% 29.00 12/17/08 547,138 1,386,556
S.E.K. Graham..................... 30,000 4.8% 29.00 12/17/08 547,138 1,386,556
M.D. Kniss........................ 37,500 5.9% 29.00 12/17/08 683,923 1,733,195
J.J. Knappenberger................ 30,000 4.8% 29.00 12/17/08 547,138 1,386,556
</TABLE>
- ------------------------------
(1) These options vest ratably over four years commencing one year from the date
of grant.
(2) Amounts reflect certain assumed rates of appreciation set forth in the
executive compensation disclosure rules of the SEC. Actual gains, if any, on
stock option exercises depend on future performance of DASI's Class A common
stock and overall stock market conditions. No assurances can be made that
the amounts reflected in these columns will be achieved.
OPTION EXERCISES AND YEAR-END VALUE TABLE
The following table shows aggregate exercise of options in the year ended
December 31, 1998 by the named executive officers and the aggregate value of
unexercised options held by each named executive officer as of December 31,
1998.
AGGREGATED OPTION EXERCISES IN LAST FISCAL
YEAR AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
YEAR-END(#) YEAR-END($)
VALUE ---------------- ----------------------
SHARES ACQUIRED ON REALIZED EXERCISABLE/ EXERCISABLE/
NAME EXERCISE ($) UNEXERCISABLE UNEXERCISABLE
- ----------------------------------- ------------------- ------------- ---------------- ----------------------
<S> <C> <C> <C> <C>
K.F. Storrie....................... 5,000 $ 83,063 82,500/112,500 $ 1,544,063/$677,813
J.A. Bubenzer...................... -- -- 8,125/44,375 96,953/310,859
S.E.K. Graham...................... -- -- 6,250/48,750 42,656/281,719
M.D. Kniss......................... -- -- 8,125/51,875 96,953/349,297
J.J. Knappenberger................. -- -- 27,373/40,000 496,570/259,375
</TABLE>
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STOCK PLANS
1998 STOCK INCENTIVE PLAN
The 1998 Stock Incentive Plan was adopted by the board of directors in
December 1998 and was approved by our stockholders in March 1999. As of the date
of this prospectus, options for an aggregate of 589,600 shares of Class A common
stock have been granted under the 1998 Plan.
The 1998 Plan provides for the grant of incentive stock options to our
employees (including officers and employee directors) and for the grant of
nonstatutory stock options and stock purchase rights ("SPRs") to our employees,
directors and consultants. A total of (1) 1,000,000 shares of Class A common
stock, (2) any shares returned to the 1996 Plan as a result of termination of
options and (3) annual increases to be added on the date of each annual meeting
of stockholders of Dura commencing in 1999 equal to the lesser of 500,000 shares
of Class A common stock, 5% of the outstanding shares of Class A common stock,
or such lesser amount as may be determined by the board of directors, are
currently reserved for issuance pursuant to the 1998 Plan.
The administrator of the 1998 Plan (the "Administrator") has the power to
determine the terms of the options or SPRs granted, including the exercise price
of the option or SPR, the number of shares subject to each option or SPR, the
exercisability thereof, and the form of consideration payable upon such
exercise. In addition, the Dura board has the authority to amend, suspend or
terminate the 1998 Plan, provided that no such action may affect any share of
DASI common stock previously issued and sold or any option or SPR previously
granted under the 1998 Plan.
Options and SPRs granted under the 1998 Plan are generally not transferable
by the optionee, and each option and SPR is exercisable during the lifetime of
the optionee and only by such optionee. Options granted under the 1998 Plan must
generally be exercised within three months after the end of an optionee's status
as an employee, director or consultant of Dura, or within twelve months after
such optionee's termination by death or disability, but in no event later than
the expiration of the option term.
In the case of SPRs, unless the Administrator determines otherwise, the
restricted stock purchase agreement shall grant DASI a repurchase option
exercisable upon the voluntary or involuntary termination of the purchaser's
employment or consulting relationship with Dura for any reason (including death
or disability). The purchase price for shares repurchased pursuant to the
restricted stock purchase agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to Dura. The purchase option shall lapse at a rate determined by the
Administrator.
The exercise price of all incentive stock options granted under the 1998
Plan must be at least equal to the fair market value of the Class A common stock
on the date of grant. The exercise price of nonstatutory stock options and SPRs
granted under the 1998 Plan is determined by the Administrator, but with respect
to nonstatutory stock options intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the exercise
price must be at least equal to the fair market value of the Class A common
stock on the date of grant. With respect to any participant who owns stock
possessing more than 10% of the voting power of all classes of the outstanding
capital stock of Dura, the exercise price of any incentive stock option granted
must be at least equal to 110% of the fair market value on the grant date and
the term of such incentive stock option must not exceed five years. The term of
all other options granted under the 1998 Plan may not exceed ten years.
The 1998 Plan provides that in the event of a merger of Dura with or into
another corporation, or a sale of substantially all of Dura's assets, each
option and SPR shall be assumed or an equivalent option substituted for by the
successor corporation. If the outstanding options and SPRs are not assumed or
substituted for by the successor corporation, the Administrator shall provide
for the
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optionee to have the right to exercise the option or SPR as to all of the
optioned stock, including shares as to which it would not otherwise be
exercisable. If the Administrator makes an option or SPR exercisable in full in
the event of a merger or sale of assets, the Administrator shall notify the
optionee that the option or SPR shall be fully exercisable for a period of
fifteen (15) days from the date of such notice, and the option or SPR will
terminate upon the expiration of such period.
EMPLOYEE STOCK DISCOUNT PURCHASE PLAN
The Dura Employee Stock Discount Purchase Plan (the "Employee Stock Purchase
Plan") was approved by our board of directors and stockholders in August 1996.
The Employee Stock Purchase Plan was established to give employees desiring to
do so a convenient means of purchasing shares of Class A common stock through
payroll deductions.
Subject to certain restrictions, each of our employees who is a U.S.
resident or a U.S. citizen temporarily on location at a facility outside of the
U.S. is eligible to participate in the Employee Stock Purchase Plan if he or she
has been employed by Dura for more than six months. Participation is
discretionary with each eligible employee. We have reserved 500,000 shares of
Class A common stock for issuance in connection with the Employee Stock Purchase
Plan. As of March 31, 1999, 77,076 shares had been purchased under the Employee
Stock Purchase Plan. Each eligible employee is entitled to purchase a maximum of
200 shares per year. Elections to participate and purchases of stock are made on
a quarterly basis. Each participating employee contributes to the Employee Stock
Purchase Plan by choosing a payroll deduction in any specified amount, with a
minimum deduction of $10 per payroll period. A participating employee may
increase or decrease the amount of his/her payroll deduction, including a change
to a zero deduction as of the beginning of any calendar quarter. Elected
contributions are credited to participants' accounts at the end of each calendar
quarter. In addition, employees may make lump sum contributions at the end of
the year to enable them to purchase the maximum number of shares available for
purchase during the plan year.
Each participating employee's contributions are used to purchase shares for
the employee's share account within 15 days after the last day of each calendar
quarter. The cost per share is 85% of the lower of the closing price of the
Class A common stock on the Nasdaq National Market on the first or the last day
of the calendar quarter. Shares purchased under the Employee Stock Purchase Plan
carry full rights to receive dividends declared from time to time, and any
dividends attributable to shares in the employee's share account are
automatically used to purchase additional shares for such employee's share
account. A participating employee has full ownership of all shares in his/her
share account and may withdraw them for sale or otherwise by written request to
the compensation committee of the Dura board following the close of each
calendar quarter. Subject to applicable federal securities and tax laws, the
Dura board has the right to amend or to terminate the Employee Stock Purchase
Plan. Amendments to the Employee Stock Purchase Plan do not affect a
participating employee's right to the benefit of the contributions made by such
employee prior to the date of any such amendment. In the event the Employee
Stock Purchase Plan is terminated, the compensation committee is required to
distribute all shares held in each participating employee's share account plus
an amount of cash equal to the balance in each participating employee's cash
account.
INDEPENDENT DIRECTOR STOCK OPTION PLAN
The Director Option Plan was approved by our board of directors and
stockholders in August 1996 to encourage stock ownership by certain directors of
Dura and to provide those individuals with an additional incentive to manage
Dura and to provide a form of compensation that would attract and retain highly
qualified individuals as members of Dura's board. The Director Option Plan
provides for the issuance of options to independent Directors, as defined,
covering 100,000 shares of Class A common stock, subject to certain adjustments
reflecting changes in Dura's capitalization.
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The terms of each option granted under the Director Option Plan may not
exceed ten years from the date of grant. The option price for each option must
equal 100% of the fair market value of the Class A common stock on the date the
option is granted. In general, no option may be exercised in whole or in part
prior to the expiration of at least six months from the date of grant of the
option. In consideration of the grant of an option, an optionee is required to
agree to continue to serve as a director of Dura for the lesser of 12 months
from the date the option is granted or for the remainder of the optionee's term
as a director of Dura. Notwithstanding this requirement, nothing contained in
the Director Option Plan or any agreement to be executed pursuant to the
Director Option Plan obligates Dura, its board or its stockholders to retain an
optionee as a director of Dura. As of March 31, 1999, options to purchase an
aggregate of 21,000 shares of Class A common stock have been granted under the
Director Option Plan.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The table below sets forth certain information regarding the equity
ownership of Dura as of June 30, 1999 by:
- each person or entity known to Dura who beneficially owns five percent or
more of a class of common stock of DASI,
- each director and named executive officer and
- all directors and executive officers of Dura as a group.
Unless otherwise stated, each of the persons named in the table has sole
voting and investment power with respect to the securities beneficially owned by
it or him as set forth opposite its or his name. Beneficial ownership of the
common stock listed in the table has been determined in accordance with the
applicable rules and regulations promulgated under the Exchange Act.
<TABLE>
<CAPTION>
CLASS A COMMON STOCK CLASS B COMMON STOCK
------------------------ -----------------------
<S> <C> <C> <C> <C>
DIRECTORS, OFFICERS AND NUMBER OF PERCENT OF NUMBER OF PERCENT OF
5% STOCKHOLDERS SHARES CLASS(+) SHARES CLASS(+)
- --------------------------------------------------------------------- ----------- ----------- ---------- -----------
ONEX DHC LLC(1)(2)................................................... -- -- 1,972,913 59.3%
Alkin Co.(2)(3)...................................................... -- -- 1,366,810 40.9%
J2R Corporation(2)(4)................................................ -- -- 308,211 9.3%
S. A. Johnson(2)(4).................................................. -- -- 317,879 9.6%
Karl F. Storrie(2)(5)................................................ 86,900 * 115,531 3.5%
David R. Bovee(2).................................................... 7,500 * 31,308 *
Joe A. Bubenzer(2)................................................... 9,325 * 23,814 *
Mervyn J. Edgar...................................................... 5,900 * -- --
Stephen E. K. Graham................................................. 11,250 * -- --
Robert R. Hibbs(2)(6)................................................ -- -- 316,160 9.5%
John J. Knappenberger................................................ 34,709 * -- --
Milton D. Kniss(2)................................................... 8,175 * 8,961 *
Michael C. Paquette.................................................. 15,095 * -- --
Robert A. Pickering.................................................. 9,570 * -- --
Robert E. Brooker, Jr................................................ 26,545 * -- --
W. H. Clement(2)..................................................... 2,000 * -- --
Jack K. Edwards...................................................... 6,512 * -- --
James O. Futterknecht................................................ 42,285 * -- --
J. Richard Jones..................................................... 16,667 * -- --
John C. Jorgensen(2)(3).............................................. -- -- 1,366,810 40.9%
William L. Orscheln(2)(3)............................................ -- -- 1,366,810 40.9%
Eric J. Rosen(1)(2).................................................. 5,000 * 1,972,913 59.3%
Scott D. Rued(2)(7).................................................. -- -- 308,211 9.3%
Ralph R. Whitney, Jr................................................. 18,800 * -- --
American Express Company(8).......................................... 950,114 6.8% -- --
Dresdner RCM Global Investors LLC(9)................................. 676,400 4.8% -- --
All directors and officers as a group (21 persons)................... 306,233 2.1% 3,267,165 97.8%
</TABLE>
- ------------------------
* Less than one percent.
(+) Based on 14,151,898 shares of Class A common stock outstanding as of June
30, 1999 and 3,325,303 shares of Class B common stock outstanding as of June
30, 1999.
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(1) Reflects shares of Class B common stock held by Onex DHC LLC, which has
shared voting power over 1,972,913 shares of Class B common stock (see
footnote (2)) and sole dispositive power over 1,394,913 shares of Class B
common stock. Mr. Rosen, a Director of Dura, is Managing Director of Onex
Investment Corp. and disclaims beneficial ownership of all shares of Class B
Common Stock owned by Onex DHC LLC. Onex DHC LLC and Onex Investment Corp.
are both wholly owned subsidiaries of Onex Corporation. The address for Onex
DHC LLC and Mr. Rosen is c/o Onex Investment Corp., 712 Fifth Avenue, 40th
Floor, New York, New York 10019.
(2) Onex, J2R, Messrs. Johnson, Storrie, Bovee, Bubenzer, Hibbs, Kniss, Clement,
Rosen and Rued and certain of Dura's other existing stockholders have
entered into agreements pursuant to which such stockholders agreed to vote
their shares of Class B common stock in the same manner as Onex votes its
shares on all matters presented to Dura's stockholders for a vote and, to
the extent permitted by law, granted to Onex DHC LLC a proxy to effectuate
such agreement. As a result, Onex has voting control of approximately 59.3%
of the common stock.
(3) Includes 14,420 shares issuable upon the exercise of currently exercisable
options issued to Alkin Co. in connection with Dura's acquisition of the
Brake and Cable Business. Messrs. Jorgensen and Orscheln are officers of
Alkin Co. and, other than Mr. Orscheln, each disclaims beneficial ownership
of the shares owned by Alkin Co. other than the shares subject to each of
their outstanding options. The address for Alkin Co. is 2000 U.S. Highway 63
South, Moberly, Missouri 65270, and the address of each such individual is
c/o Alkin Co. at the same address.
(4) Includes 308,211 shares owned by J2R, of which Mr. Johnson is President, and
9,668 shares owned by Mr. Johnson. The address for Mr. Johnson and J2R is
c/o Dura Automotive Systems, Inc., 4508 IDS Center, Minneapolis, Minnesota
55402.
(5) Includes 1,400 shares owned by Mr. Storrie's wife. Mr. Storrie disclaims
beneficial ownership of such shares.
(6) Includes 308,211 shares owned by J2R, of which Mr. Hibbs is a stockholder,
and 7,949 shares owned by Mr. Hibbs. Mr. Hibbs disclaims beneficial
ownership of the shares owned by J2R. The address for Mr. Hibbs is c/o Dura
Automotive Systems, Inc., 4508 IDS Center, Minneapolis, Minnesota 55402.
(7) Includes 308,211 shares owned by J2R, of which Mr. Rued is a stockholder.
Mr. Rued disclaims beneficial ownership of the shares owned by J2R. The
address for Mr. Rued is c/o Dura Automotive Systems, Inc., 4508 IDS Center,
Minneapolis, Minnesota 55402.
(8) American Express Company ("AEC") and American Express Financial Corporation
("AEFC") each reported as of December 31, 1998 shared dispositive power with
respect to 950,114 shares of Class A common stock and shared voting power
with respect to 400,114 shares of Class A common stock. IDS Discovery Fund
Inc. reported as of December 31, 1998 sole voting power and shared
dispositive power with respect to 550,000 shares of Class A common stock,
representing 11.4% of the outstanding shares of Class A common stock. The
address for AEC is American Express Tower, 200 Vesey Street, New York, New
York 10285 and the address for AEFC and IDS Discovery Fund Inc. is IDS Tower
10, Minneapolis, Minnesota 55440.
(9) Dresdner RCM Global Investors LLC, RCM Limited L.P. and RCM General
Corporation each reported as of December 31, 1998 sole voting power with
respect to 609,900 shares of Class A common stock and sole dispositive power
with respect to 676,400 shares of Class A common stock. The address for
these entities is Four Embarcadero Center, Suite 2900, San Francisco,
California 94111. Dresdner Bank AG also reported beneficial ownership of
680,200 shares of Class A common stock as a result of its being the parent
corporation of Dresdner RCM US Holdings LLC. The address for Dresdner Bank
AG is Jurgen-Ponto-Platz 1, 60301 Frankfurt, Germany.
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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Dura, Onex, J2R, Alkin Co. and S.A. Johnson and Robert R. Hibbs and certain
other investors are parties to a stockholders agreement pursuant to which each
party has agreed to vote his or its shares in the same manner that Onex votes
its shares of Dura's common stock.
Dura, Onex and certain stockholders including J2R, Alkin Co., S.A. Johnson
and Karl F. Storrie are parties to a registration agreement pursuant to which
Dura has granted certain of its stockholders rights to register shares of Dura's
common stock.
Dura paid fees to Hidden Creek of approximately $3.7 million in 1998 in
connection with the acquisitions of Universal, Trident and the Hinge Business,
the June 1998 Offering and the March 1998 sale of the Trust Preferred
Securities. In addition, Hidden Creek received a fee of $2.0 million for
services rendered in connection with the Excel Acquisition and a fee of $2.0
million for services rendered in connection with the Adwest Acquisition. S.A.
Johnson, the Chairman of the Dura board, is the founder, Chief Executive Officer
and President of Hidden Creek and Messrs. Robert R. Hibbs, a Vice President and
Director of Dura, and Scott D. Rued, a Vice President of Dura, are executive
officers of Hidden Creek. Certain officers and employees of Hidden Creek
continue to provide services to Dura. A portion of the salaries and expenses of
such Hidden Creek officers and employees, approximately $200,000, is allocated
to Dura annually.
In connection with the December 1991 private placement of common stock, Mr.
Storrie acquired 139,531 shares of Class B common stock, of which 115,531 shares
are still held by Mr. Storrie. Dura loaned Mr. Storrie $75,000 in connection
with such purchase. Mr. Storrie has repaid $12,900 of the outstanding balance as
of March 31, 1999. The loan bears interest at 1% above the prime rate, matures
on December 31, 2000 and is secured by a pledge of the shares.
DESCRIPTION OF CAPITAL STOCK OF DASI
GENERAL MATTERS
The total amount of authorized capital stock of DASI consists of 60,000,000
shares of Class A common stock, par value $0.01 per share, 10,000,000 shares of
Class B common stock, par value $0.01 per share and 5,000,000 shares of
preferred stock, par value $1.00 per share. As of June 30, 1999, 14,061,079
shares of Class A common stock, 3,325,303 shares of Class B common stock and no
shares of preferred stock were issued and outstanding. As of June 30, 1999,
there were: (1) 2,957,520 shares of Class A common stock reserved for issuance
under Dura's stock option plans and Employee Stock Purchase Plan, of which
options to purchase 1,259,463 shares of Class A common stock were outstanding;
(2) 3,325,303 shares of Class A common stock reserved for issuance upon the
conversion of the Class B common stock; (3) 1,289,000 shares of Class A common
stock reserved for issuance upon the conversion of the Trust Preferred
Securities and (4) 152,401 shares of Class A common stock reserved for issuance
upon the exercise of outstanding warrants.
The following summary of certain provisions of DASI's capital stock
describes all material provisions of, but does not purport to be complete and is
subject to, and qualified in its entirety by, our restated certificate of
incorporation and by-laws, which are filed with the SEC. See "Where You Can Find
More Information."
CLASS A COMMON STOCK
All of the outstanding shares of Class A common stock are validly issued,
fully paid and nonassessable. Subject to the prior rights of the holders of any
preferred stock, the holders of outstanding shares of Class A common stock are
entitled to receive dividends out of assets legally available therefor at such
time and in such amounts as the Board may from time to time determine. The
shares of Class A common stock are not convertible and the holders thereof have
no preemptive
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or subscription rights to purchase any securities of Dura. Upon liquidation,
dissolution or winding up of Dura, the holders of Class A common stock are
entitled to receive pro rata the assets of Dura which are legally available for
distribution, after payment of all debts and other liabilities and subject to
the prior rights of any holders of preferred stock then outstanding. Each
outstanding share of Class A common stock is entitled to one vote on all matters
submitted to a vote of stockholders. Except as otherwise required by law or our
restated certificate, the Class A common stock and Class B common stock vote
together on all matters submitted to a vote of the stockholders, including the
election of directors.
The Class A common stock is traded on the Nasdaq National Market under the
symbol "DRRA."
CLASS B COMMON STOCK
The issued and outstanding shares of Class B common stock generally have
identical rights to those of the Class A common stock except with respect to
voting power and conversion rights. Each share of Class B common stock is
entitled to ten votes on all matters submitted to a vote of stockholders, as
compared to one vote for each share of Class A common stock. The Class B common
stock automatically ceases to have any voting rights, other than as required by
law, at any time that Onex Corporation, J2R Corporation and certain stockholders
affiliated with Hidden Creek Industries, in the aggregate, do not beneficially
own at least 10% of the total outstanding shares of common stock. As of June 30,
1999, these stockholders collectively owned approximately 19% of the total
outstanding shares of common stock. The Class B common stock is convertible at
the option of the holder, and mandatorily convertible upon any transfer of the
Class B common stock while it still has ten votes per share (except to
affiliates), into Class A common stock on a share-for-share basis. The Class B
common stock is not registered under the Exchange Act and is not listed for
trading on any national securities exchange or on the Nasdaq National Market.
PREFERRED STOCK
The Dura board may, without further action by Dura's stockholders, from time
to time, direct the issuance of shares of preferred stock in series and may, at
the time of issuance, determine the rights, preferences and limitations of each
series. Satisfaction of any dividend preferences of outstanding shares of
preferred stock would reduce the amount of funds available for the payment of
dividends on shares of Class A common stock. Holders of shares of preferred
stock may be entitled to receive a preference payment in the event of any
liquidation, dissolution or winding-up of Dura before any payment is made to the
holders of shares of Class A common stock. Under certain circumstances, the
issuance of shares of preferred stock may render more difficult or tend to
discourage a merger, tender offer or proxy contest, the assumption of control by
a holder of a large block of Dura's securities or the removal of incumbent
management. Upon the affirmative vote of a majority of the total number of
directors then in office, the Dura board, without stockholder approval, may
issue shares of preferred stock with voting and conversion rights which could
adversely affect the holders of shares of Class A common stock. There are no
shares of preferred stock outstanding, and Dura has no present intention to
issue any shares of preferred stock. The affirmative vote of two-thirds of the
Dura board is required to issue any preferred stock.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Class A common stock is Firstar
Bank Milwaukee, N.A.
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DESCRIPTION OF OTHER INDEBTEDNESS
NEW CREDIT FACILITY
GENERAL. In connection with the Acquisitions, the Issuer, DASI and various
direct and indirect wholly owned subsidiaries of DASI (the "Borrowers"), entered
into the new credit facility with Bank of America National Trust and Savings
Association ("Bank of America") and certain other lenders. The new credit
facility currently provides for aggregate borrowings by Dura of approximately
$950 million. As of March 31, 1999, there was $825.0 million of outstanding
indebtedness under the new credit facility and $250.0 million available under
the new credit facility for working capital and other corporate purposes.
The new credit facility includes (a) a $275.0 million tranche A term loan,
(b) a $275.0 million tranche B term loan and (c) a $400.0 million revolving
credit facility.
INTEREST. Amounts outstanding under the new credit facility bear interest,
at Dura's option, at a rate per annum equal to either: (1) the Eurocurrency
interbank offered rate (the "Eurocurrency Rate") or (2) the alternate base rate,
in each case, plus an applicable margin. The "alternate base rate" is defined as
the higher of (x) Bank of America's reference rate, and (y) 0.50% per annum over
the federal funds rate. The applicable margin for the tranche A term loan and
the revolving credit facility is initially 2.25% for Eurocurrency Rate loans and
0.75% for alternate base rate loans. The applicable margin for tranche A term
loans and the revolving credit facility adjusts according to a performance
pricing grid based on Dura's ratio of senior indebtedness to EBITDA, ranging
from (1) for Eurocurrency loans, 2.25% to 1.50% and (2) for alternate base rate
loans, 0.75% to 0.00%. The applicable margin for the tranche B term loan is
fixed at 2.50% for Eurocurrency loans and 1.00% for alternate base rate loans.
As of March 31, 1999, Dura's borrowings under the new credit facility bore
interest at rates ranging from 5.28% to 10.00%.
MATURITY. Borrowings under the tranche A term loan are due and payable in
March 2005 and borrowings under the tranche B term loan are due and payable in
March 2006. The revolving credit facility is available until March 2005.
SECURITY AND GUARANTIES. The new credit facility is secured by a first
priority security interest in all existing and after-acquired tangible and
intangible assets of the Borrowers and their material subsidiaries, including,
without limitation, intellectual property, real property, all of the capital
stock owned by the Borrowers and each of their material subsidiaries and any
inter-company debt obligations (with exceptions for certain foreign
subsidiaries). All of the Borrowers' obligations under the new credit facility
are fully and unconditionally guaranteed by DASI and all of the Issuer's
material subsidiaries (with exceptions for certain foreign subsidiaries).
COVENANTS. The new credit facility requires Dura to meet certain financial
tests, including, without limitation, maximum levels of senior debt as a ratio
to EBITDA, minimum interest coverage, total debt as a ratio of EBITDA and net
worth. The new credit facility contains certain covenants which, among other
things, limit the incurrence of additional indebtedness, investments, dividends,
transactions with affiliates, asset sales, acquisitions, mergers and
consolidations, payments of certain other indebtedness, liens and encumbrances.
EVENTS OF DEFAULT. The new credit facility contains customary events of
default, including, without limitation, payment defaults, breaches of
representations and warranties, covenant defaults, cross-defaults to certain
other indebtedness (including the notes), certain events of bankruptcy and
insolvency, judgment defaults, failure of any guaranty or security document
supporting the new credit facility to be in full force and effect and a change
of control of Dura.
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DESCRIPTION OF NOTES
You can find the definitions of certain terms used in this description under
the subheading "Certain Definitions." In this description, the word "Issuer"
refers only to Dura Operating Corp. and not to any of its subsidiaries and the
word "notes" refers to both to the outstanding notes and the exchange notes.
The Issuer will issue the exchange notes relating to the dollar notes under
the dollar notes indenture and the exchange notes relating to euro notes under
the euro notes indenture. The terms of the notes include those stated in the
indentures and those made part of the indentures by reference to the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act").
The following description is a summary of the material provisions of the
indentures and the registration rights agreements. It does not restate those
agreements in their entirety. We urge you to read the applicable indenture and
registration rights agreement because they, and not this description, define
your rights as holders of the notes. Certain defined terms used in this
description but not defined below under "--Certain Definitions" have the
meanings assigned to them in the Indentures.
As of the date of the indentures, all of the Issuer's material domestic
subsidiaries were "Restricted Subsidiaries." However, under the circumstances
described below under the subheading "--Certain Covenants--Designation of
Restricted and Unrestricted Subsidiaries," the Issuer is permitted to designate
certain of its subsidiaries as "Unrestricted Subsidiaries." The Unrestricted
Subsidiaries will not be subject to many of the restrictive covenants in the
indentures. The Unrestricted Subsidiaries will not guarantee the notes.
BRIEF DESCRIPTION OF THE NOTES AND THE GUARANTIES
THE NOTES
- are general unsecured obligations of the Issuer;
- are subordinated in right of payment to all existing and future Senior
Debt of the Issuer;
- are PARI PASSU with all existing and future subordinated, unsecured
Indebtedness of the Issuer that does not expressly provide that it is
subordinated to the notes; and
- are unconditionally guaranteed by the Guarantors.
THE GUARANTIES
The notes are guaranteed by all of the material Domestic Restricted
Subsidiaries of the Issuer.
Each Guaranty of the notes:
- is a general unsecured obligation of the Guarantor;
- is subordinated in right of payment to all existing and future Senior Debt
of the Guarantor; and
- is PARI PASSU in right of payment with any future senior subordinated
Indebtedness of the Guarantor.
Not all of our Subsidiaries guaranteed the notes. In the event of a
bankruptcy, liquidation or reorganization of any of these non-guarantor
Subsidiaries, these non-guarantor Subsidiaries will pay the holders of their
debts and their trade creditors before they will be able to distribute any of
their assets to us. See "Risk Factors--The Issuer Conducts Certain of its
Operations Through Subsidiaries and Not All of the Issuer's Subsidiaries Are
Subsidiary Guarantors."
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PRINCIPAL, MATURITY AND INTEREST
The dollar indenture provides for the issuance by the Issuer of dollar notes
with a maximum aggregate principal amount of $350.0 million, of which $300.0
million was issued in the initial offering, and the euro indenture provides for
the issuance by the Issuer of euro notes with a maximum aggregate principal
amount of [EURO]150.0 million, of which [EURO]100.0 million was issued in the
initial offering. The Issuer may issue additional dollar notes and euro notes
(collectively, the "additional notes") from time to time. Any offering of
additional notes is subject to the covenant described below under the caption
"--Certain Covenants--Incurrence of Indebtedness and Issuance of Preferred
Stock." The notes and any additional notes subsequently issued under the
indentures would be treated as a single class for all purposes under the
applicable indenture, including, without limitation, waivers, amendments,
redemptions and offers to purchase. The dollar notes were issued in fully
registered form, without coupons, in denominations of $1,000 and integral
multiples thereof. The euro notes were issued in fully registered form, without
coupons, in denominations of [EURO]1,000 and integral multiples thereof. In each
case, the notes will mature on May 1, 2009.
Interest on the notes accrues at the rate of 9% per annum and will be
payable semi-annually in arrears on May 1 and November 1, commencing on November
1, 1999. The Issuer will make each interest payment to the holders of record on
the immediately preceding April 15 and October 15.
Interest on the notes will accrue from the date of original issuance or, if
interest has already been paid, from the date it was most recently paid.
Interest will be computed on the basis of a 360-day year comprised of twelve
30-day months.
METHODS OF RECEIVING PAYMENTS ON THE NOTES
With respect to the dollar notes, payments of principal, premium and
Liquidated Damages, if any, and interest will be made at the corporate trust
office of the Paying Agent in New York City or, subject to any applicable laws
and regulations, at the office of the Paying Agent in Luxembourg or the Paying
Agent in London by United States dollar check drawn on, or, if a holder has
given wire instructions to the Issuer, by wire transfer to a United States
dollar account maintained by the holder with a bank located in New York City.
Except as provided below, with respect to the euro notes, payments of
principal, premium and Liquidated Damages, if any, and interest will be made by
credit or transfer to a Euro account maintained by the holder in the place of
payment specified by the holder. Holders of euro notes who wish to receive
payment in any currency other than Euros must make arrangements at their own
expense.
Notwithstanding the foregoing, holders of the 144A Global Notes through DTC
will be paid in U.S. dollars converted from such payments in Euros by the Paying
Agent unless the registered holder, on behalf of any owner of beneficial
interests, elects to receive payment in Euros. All costs of conversions, if any,
will be borne by holders of beneficial interests in the euro notes held through
DTC, by deduction from such payment. An owner of a beneficial interest in a euro
note held through DTC may receive payment in Euros by notifying the DTC
participant through which its beneficial interest in its euro note is held on or
prior to the record date of (1) such investor's election to receive payment in
Euro and (2) wire transfer instructions to an account entitled to receive the
relevant payment. Any such conversion will be effected in a manner mutually
agreed upon by the Issuer and the Paying Agent.
For so long as the notes are listed on the Luxembourg Stock Exchange and the
rules of such stock exchange so require, the Issuer will maintain a Paying Agent
in Luxembourg. If a payment date is not a Business Day (as defined in the
indentures) at a place of payment, payment may be made at that place on the next
succeeding Business Day and no interest shall accrue for the intervening period.
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PAYING AGENT AND REGISTRAR FOR THE NOTES
The Trustee will initially act as principal Paying Agent and Registrar at
its corporate trust offices in the City of New York, State of New York and in
London. Industrial Bank of Japan (Luxembourg) S.A. will initially act as
co-registrar and as an additional paying agent in Luxembourg. The Issuer may
change the Paying Agent or Registrar without prior notice to the Holders, and
the Issuer or any of its Subsidiaries may act as Paying Agent or Registrar;
provided, however, that for so long as the notes are listed on the Luxembourg
Stock Exchange and the rules of such exchange so require, the Issuer will
publish notice of the change in the Transfer Agent in Luxembourg in a daily
newspaper with general circulation in Luxembourg (which is expected to be the
LUXEMBOURG WORT).
TRANSFER AND EXCHANGE
A holder may transfer or exchange notes in accordance with the applicable
indenture. The Registrar and the Trustee may require a holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Issuer may require a holder to pay any taxes and fees required by law or
permitted by the applicable indenture. The Issuer is not required to transfer or
exchange any Note selected for redemption. Also, the Issuer is not required to
transfer or exchange any note for a period of 15 days before a selection of
notes to be redeemed.
The registered holder of a note will be treated as the owner of it for all
purposes.
SUBSIDIARY GUARANTIES
The Guarantors have jointly and severally guarantee the Issuer's obligations
under the notes. Each Subsidiary Guaranty is subordinated to the prior payment
in full of all Senior Debt of that Guarantor. The obligations of each Guarantor
under its Subsidiary Guaranty are limited as necessary to prevent that
Subsidiary Guaranty from constituting a fraudulent conveyance under applicable
law. See "Risk Factors--If a Court Were to Find that the Issuance of the Notes
or the Subsidiary Guaranties Constituted a Fraudulent Conveyance, such Court
Could Avoid the Issuer's Obligations Under the Notes or the Subsidiary
Guarantors' Obligations under the Subsidiary Guaranties."
A Guarantor may not sell or otherwise dispose of all or substantially all of
its assets to, or consolidate with or merge with or into (whether or not such
Guarantor is the surviving Person), another Person, other than the Issuer or
another Guarantor, unless:
(1) immediately after giving effect to that transaction, no Default or Event of
Default exists; and
(2) either:
(a) the Person acquiring the property in any such sale or disposition or the
Person formed by or surviving any such consolidation or merger assumes
all the obligations of that Guarantor under the indentures, its
Subsidiary Guaranty and the registration rights agreements pursuant to
supplemental indentures and appropriate collateral documents satisfactory
to the Trustee; or
(b) the Net Proceeds of such sale or other disposition are applied in
accordance with the "Asset Sale" provisions of the Indentures.
The Subsidiary Guaranty of a Guarantor will be released:
(1) in connection with any sale or other disposition of all or substantially all
of the assets of that Guarantor (including by way of merger or
consolidation) to a Person that is not (either before or after giving effect
to such transaction) a Restricted Subsidiary of the Issuer, if the Guarantor
applies the Net Proceeds of that sale or other disposition in accordance
with the "Asset Sale" provisions of the indentures;
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(2) in connection with any sale of all of the Capital Stock of a Guarantor to a
Person that is not (either before or after giving effect to such
transaction) a Restricted Subsidiary of the Issuer, if the Issuer applies
the Net Proceeds of that sale in accordance with the "Asset Sale" provisions
of the Indentures; or
(3) if the Issuer properly designates any Restricted Subsidiary that is a
Guarantor as an Unrestricted Subsidiary.
See "--Repurchase at the Option of Holders--Asset Sales."
PARENT GUARANTY
The notes are unconditionally guaranteed by DASI (the "Parent Guaranty").
The Parent Guaranty is subordinated to the prior payment in full of all Senior
Debt of DASI. DASI may not sell or otherwise dispose of all or substantially all
of its assets to, or consolidate or merge with or into (whether or not DASI is
the Surviving Person) another Person unless immediately after giving effect to
that transaction, no Default or Event of Default exists and the Person acquiring
the property in any such sale or disposition or the person formed by or
surviving any such consolidation or merger assumes all obligations of DASI under
the indentures and the registration rights agreements pursuant to supplemental
indentures and appropriate collateral documents satisfactory to the Trustee.
SUBORDINATION
The payment of principal, interest and premium and Liquidated Damages, if
any, on the notes is subordinated to the prior payment in full of all Senior
Debt of the Issuer, including Senior Debt incurred after the date of the
indentures.
The holders of Senior Debt will be entitled to receive payment in full of
all Obligations due in respect of Senior Debt (including interest after the
commencement of any bankruptcy proceeding at the rate specified in the
applicable Senior Debt) before the holders of notes will be entitled to receive
any payment with respect to the notes (except that holders of notes may receive
and retain Permitted Junior Securities and payments made from the trust
described under "--Legal Defeasance and Covenant Defeasance"), in the event of
any distribution to creditors of the Issuer:
(1) in a liquidation or dissolution of the Issuer;
(2) in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to the Issuer or its property;
(3) in an assignment for the benefit of creditors; or
(4) in any marshaling of the Issuer's assets and liabilities.
The Issuer also may not make any payment in respect of the notes (except in
Permitted Junior Securities or from the trust described under "--Legal
Defeasance and Covenant Defeasance") if:
(1) a payment default on Designated Senior Debt occurs and is continuing beyond
any applicable grace period; or
(2) any other default occurs and is continuing on any series of Designated
Senior Debt that permits holders of that series of Designated Senior Debt to
accelerate its maturity and the Trustee receives a notice of such default (a
"Payment Blockage Notice") from the Issuer or the holders of any Designated
Senior Debt.
Payments on the notes may and shall be resumed:
(1) in the case of a payment default, upon the date on which such default is
cured or waived; and
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(2) in case of a nonpayment default, the earlier of the date on which such
nonpayment default is cured or waived or 179 days after the date on which
the applicable Payment Blockage Notice is received, unless the maturity of
any Designated Senior Debt has been accelerated.
No new Payment Blockage Notice may be delivered unless and until:
(1) 360 days have elapsed since the delivery of the immediately prior Payment
Blockage Notice; and
(2) all scheduled payments of principal, interest and premium and Liquidated
Damages, if any, on the notes that have come due have been paid in full in
cash.
No nonpayment default that existed or was continuing on the date of delivery
of any Payment Blockage Notice to the Trustee shall be, or be made, the basis
for a subsequent Payment Blockage Notice unless such default shall have been
cured or waived for a period of not less than 90 days.
If the Trustee or any holder of the notes receives a payment in respect of
the notes (except in Permitted Junior Securities or from the trust described
under "--Legal Defeasance and Covenant Defeasance") when:
(1) the payment is prohibited by these subordination provisions; and
(2) the Trustee or the holder has actual knowledge that the payment is
prohibited;
the Trustee or the holder, as the case may be, shall hold the payment in
trust for the benefit of the holders of Senior Debt. Upon the proper written
request of the holders of Senior Debt, the Trustee or the holder, as the case
may be, shall deliver the amounts in trust to the holders of Senior Debt or
their proper representative.
The Issuer must promptly notify holders of Senior Debt if payment of the
notes is accelerated because of an Event of Default.
As a result of the subordination provisions described above, in the event of
a bankruptcy, liquidation or reorganization of the Issuer, holders of notes may
recover less ratably than creditors of the Issuer who are holders of Senior
Debt. See "Risk Factors--The Notes and Guaranties are Unsecured Senior
Subordinated Obligations."
"DESIGNATED SENIOR DEBT" means:
(1) any Indebtedness outstanding under the Credit Agreement; and
(2) after payment in full of all Obligations under the Credit Agreement, any
other Senior Debt of the Issuer permitted under the Indentures the principal
amount of which is $20.0 million or more and which has been designated by
the Issuer as "Designated Senior Debt."
"PERMITTED JUNIOR SECURITIES" means:
(1) Equity Interests in the Issuer, DASI or any Guarantor; or
(2) debt securities that are subordinated to all Senior Debt and any debt
securities issued in exchange for Senior Debt to substantially the same
extent as, or to a greater extent than, the Notes, the Parent Guaranty and
the Subsidiary Guaranties are subordinated to Senior Debt under the
Indentures.
"SENIOR DEBT" means:
(1) all Indebtedness of the Issuer, any Guarantor, or DASI outstanding under
Credit Facilities and all Hedging Obligations with respect thereto;
(2) any other Indebtedness of the Issuer or any Guarantor permitted to be
incurred under the terms of the Indentures, unless the instrument under
which such Indebtedness is incurred expressly
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provides that it is on a parity with or subordinated in right of payment to
the Notes or any of the Guaranties; and
(3) all Obligations with respect to the items listed in the preceding clauses
(1) and (2).
Notwithstanding anything to the contrary in the preceding, Senior Debt will
not include:
(1) any liability for federal, state, local or other taxes owed or owing by the
Issuer;
(2) any Indebtedness of the Issuer or DASI to any of its Subsidiaries or other
Affiliates;
(3) any trade payables; or
(4) the portion of any Indebtedness that is incurred in violation of the
indentures.
OPTIONAL REDEMPTION
At any time prior to May 1, 2002, the Issuer may redeem up to 35% of the
aggregate principal amount of the dollar notes issued under the dollar notes
indenture (calculated after giving effect to any issuance of additional notes
that are dollar notes) and up to 35% of the aggregate principal amount of the
euro notes issued under the euro notes indenture (calculated after giving effect
to any issuance of additional notes that are euro notes), in each case at a
redemption price of 109% of the principal amount thereof, plus accrued and
unpaid interest and Liquidated Damages, if any, to the redemption date, with the
net cash proceeds of one or more Equity Offerings; PROVIDED that:
(1) at least 65% of the aggregate principal amount of the dollar notes issued
under the dollar note indenture remains outstanding and at least 65% of the
aggregate principal amount of the euro notes issued under the euro notes
indenture remains outstanding, in each case immediately after the occurrence
of each such redemption (excluding notes held by DASI, the Issuer and their
respective Subsidiaries); and
(2) the redemptions must occur within 90 days of the date of the closing of any
such Equity Offering.
Except pursuant to the preceding paragraph, the notes will not be redeemable
at the Issuer's option prior to May 1, 2004. The Issuer is not prohibited,
however, from acquiring the notes by means other than a redemption, whether
pursuant to an issuer tender or otherwise, assuming such acquisition does not
otherwise violate the terms of the indentures.
After May 1, 2004, the Issuer may redeem all or a part of the notes upon not
less than 30 nor more than 60 days' notice, at the redemption prices (expressed
as percentages of principal amount) set forth below plus accrued and unpaid
interest and Liquidated Damages, if any, thereon, to the applicable redemption
date, if redeemed during the twelve-month period beginning on May 1 of the years
indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---------------------------------------------------------------------------------- -----------
<S> <C>
2004.............................................................................. 104.50%
2005.............................................................................. 103.00%
2006.............................................................................. 101.50%
-----------
2007 and thereafter............................................................... 100.00%
-----------
-----------
</TABLE>
For so long as the notes are listed on the Luxembourg Stock Exchange and the
rules of such exchange so require, the Issuer will cause a notice of redemption
of the notes to be published in a daily newspaper with general circulation in
Luxembourg (which is expected to be the LUXEMBOURG WORT).
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MANDATORY REDEMPTION
The Issuer is not required to make mandatory redemption or sinking fund
payments with respect to the notes.
REPURCHASE AT THE OPTION OF HOLDERS
CHANGE OF CONTROL
If a Change of Control occurs, each holder of notes will have the right to
require the Issuer to repurchase all or any part (equal to $1,000 or an integral
multiple thereof or [EURO]1,000 or an integral multiple thereof) of that
holder's notes pursuant to a Change of Control Offer on the terms set forth in
the indentures. In the Change of Control Offer, the Issuer will offer a Change
of Control Payment in cash equal to 101% of the aggregate principal amount of
Notes repurchased plus accrued and unpaid interest and Liquidated Damages, if
any, thereon, to the date of purchase. Within 30 days following any Change of
Control, unless the Issuer has exercised its right to redeem the notes as
described under "--Optional Redemption," the Issuer will mail a notice to each
holder describing the transaction or transactions that constitute the Change of
Control and offering to repurchase Notes on the Change of Control Payment Date
specified in such notice, which date shall be no earlier than 30 days and no
later than 60 days from the date such notice is mailed, pursuant to the
procedures required by the Indentures and described in such notice. The Issuer
will comply with the requirements of Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of the Notes as a
result of a Change of Control. To the extent that the provisions of any
securities laws or regulations conflict with the Change of Control provisions of
the Indentures, the Issuer will comply with the applicable securities laws and
regulations and will not be deemed to have breached its obligations under the
Change of Control provisions of the Indentures by virtue of such conflict.
On the Change of Control Payment Date, the Issuer will, to the extent
lawful:
(1) accept for payment all Notes or portions thereof properly tendered pursuant
to the Change of Control Offer;
(2) deposit with the Paying Agent an amount equal to the Change of Control
Payment in respect of all Notes or portions thereof so tendered; and
(3) deliver or cause to be delivered to the Trustee the notes so accepted
together with an Officers' Certificate stating the aggregate principal
amount of notes or portions thereof being purchased by the Issuer.
The Paying Agent will promptly mail to each holder of notes so tendered the
Change of Control Payment for such notes, and the Trustee will promptly
authenticate and mail (or cause to be transferred by book entry) to each holder
a new note equal in principal amount to any unpurchased portion of the notes
surrendered, if any; PROVIDED that each such new dollar note will be in a
principal amount of $1,000 or an integral multiple thereof and each such new
euro note will be in a principal amount of [EURO]1,000 or an integral multiple
thereof.
Prior to complying with any of the provisions of this "Change of Control"
covenant, but in any event within 90 days following a Change of Control, the
Issuer will either repay all outstanding Senior Debt or obtain the requisite
consents, if any, under all agreements governing outstanding Senior Debt to
permit the repurchase of notes required by this covenant. If the Issuer does not
obtain such consents or repay such borrowings, the Issuer will be prohibited
from purchasing the notes. The Issuer will publicly announce the results of the
Change of Control Offer on or as soon as practicable after the Change of Control
Payment Date.
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The provisions described above that require the Issuer to make a Change of
Control Offer following a Change of Control will be applicable regardless of
whether any other provisions of the Indentures are applicable. Except as
described above with respect to a Change of Control, the Indentures do not
contain provisions that permit the holders of the notes to require that the
Issuer repurchase or redeem the notes in the event of a takeover,
recapitalization or similar transaction.
The Issuer will not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in the indentures applicable to a Change of Control Offer made by the Issuer and
purchases all notes validly tendered and not withdrawn under such Change of
Control Offer.
The definition of Change of Control includes a phrase relating to the direct
or indirect sale, lease, transfer, conveyance or other disposition of "all or
substantially all" of the properties or assets of the Issuer and its
Subsidiaries taken as a whole. Although there is a limited body of case law
interpreting the phrase "substantially all," there is no precise established
definition of the phrase under applicable law. Accordingly, the ability of a
holder of notes to require the Issuer to repurchase such notes as a result of a
sale, lease, transfer, conveyance or other disposition of less than all of the
assets of the Issuer and its Subsidiaries taken as a whole to another Person or
group may be uncertain.
ASSET SALES
The Issuer will not, and will not permit any of its Restricted Subsidiaries
to, consummate an Asset Sale unless:
(1) the Issuer (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the fair
market value of the assets or Equity Interests issued or sold or otherwise
disposed of (as determined in good faith by the Issuer);
(2) such fair market value is determined by the Issuer's Board of Directors and
evidenced by a resolution of the Board of Directors set forth in an
Officers' Certificate delivered to the Trustee; and
(3) at least 75% of the consideration therefor received by the Issuer or such
Restricted Subsidiary is in the form of cash or Cash Equivalents. For
purposes of this provision, each of the following shall be deemed to be
cash:
(a) any liabilities (as shown on the Issuer's or such Restricted
Subsidiary's most recent balance sheet) of the Issuer or any Restricted
Subsidiary (other than contingent liabilities and liabilities that are by
their terms subordinated to the Notes or any Subsidiary Guaranty) that
are assumed by the transferee of any such assets pursuant to a customary
novation agreement that releases the Issuer or such Restricted Subsidiary
from further liability;
(b) any securities, notes or other obligations received by the Issuer or any
such Restricted Subsidiary from such transferee that are converted by the
Issuer or such Restricted Subsidiary into cash within 180 days after the
consummation of such Asset Sale (to the extent of the cash received in
that conversion); and
(c) any Designated Noncash Consideration received by the Issuer or any of
its Restricted Subsidiaries in such Asset Sale; PROVIDED that the
aggregate fair market value (as determined above) of such Designated
Noncash Consideration, taken together with the fair market value at the
time of receipt of all other Designated Noncash Consideration received
pursuant to this clause (c) less the amount of Net Proceeds previously
realized in cash from prior Designated Noncash Consideration is less than
5.0% of Total Assets at the time of the receipt of such Designated
Noncash Consideration (with the fair market value of each item of
Designated
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Noncash Consideration being measured at the time received and without
giving effect to subsequent changes in value).
Within 365 days after the receipt of any Net Proceeds from an Asset Sale,
the Issuer may apply such Net Proceeds at its option:
(1) to repay Senior Debt and, if such Senior Debt repaid is revolving credit
Indebtedness, to correspondingly reduce commitments with respect thereto;
(2) to acquire all or substantially all of the assets of, or a majority of the
Voting Stock of, another Permitted Business;
(3) to make a capital expenditure; and/or
(4) to acquire other long-term assets that are used or useful in a Permitted
Business.
Pending the final application of any such Net Proceeds, the Issuer may
temporarily reduce revolving credit borrowings or otherwise invest such Net
Proceeds in any manner that is not prohibited by the Indentures.
Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the preceding paragraph will constitute "Excess Proceeds." When the
aggregate amount of Excess Proceeds exceeds $20.0 million, the Issuer will make
an Asset Sale Offer to all holders of notes and all holders of other
Indebtedness that is PARI PASSU with the notes containing provisions similar to
those set forth in the Indentures with respect to offers to purchase or redeem
with the proceeds of sales of assets to purchase the maximum principal amount of
notes and such other PARI PASSU Indebtedness that may be purchased out of the
Excess Proceeds. The offer price in any Asset Sale Offer will be equal to 100%
of principal amount plus accrued and unpaid interest and Liquidated Damages, if
any, to the date of purchase, and will be payable in cash. If any Excess
Proceeds remain after consummation of an Asset Sale Offer, the Issuer may use
such Excess Proceeds for any purpose not otherwise prohibited by the Indentures.
If the aggregate principal amount of notes and such other PARI PASSU
Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess
Proceeds, the Trustee shall select the notes and such other PARI PASSU
Indebtedness to be purchased on a pro rata basis based on the principal amount
of notes and such other PARI PASSU Indebtedness tendered. Upon completion of
each Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
The Issuer will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with each
repurchase of notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the Asset Sales
provisions of the Indentures, the Issuer will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under the Asset Sale provisions of the indentures by virtue of such
conflict.
The agreements governing the Issuer's outstanding Senior Debt currently
prohibit the Issuer from purchasing any notes, and also provide that certain
change of control or asset sale events with respect to the Issuer would
constitute a default under these agreements. Any future credit agreements or
other agreements relating to Senior Debt to which the Issuer becomes a party may
contain similar restrictions and provisions. In the event a Change of Control or
Asset Sale occurs at a time when the Issuer is prohibited from purchasing notes,
the Issuer could seek the consent of its senior lenders to the purchase of notes
or could attempt to refinance the borrowings that contain such prohibition. If
the Issuer does not obtain such a consent or repay such borrowings, the Issuer
will remain prohibited from purchasing notes. In such case, the Issuer's failure
to purchase tendered notes would constitute an Event of Default under the
Indentures which would, in turn, constitute a default under such Senior
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Debt. In such circumstances, the subordination provisions in the indentures
would likely restrict payments to the holders of notes.
SELECTION AND NOTICE
If less than all of the applicable notes are to be redeemed at any time, the
Trustee will select notes for redemption as follows:
(1) if the Notes are listed, in compliance with the requirements of the
principal national securities exchange on which the notes are listed; or
(2) if the notes are not so listed, on a pro rata basis, by lot or by such
method as the Trustee shall deem fair and appropriate.
No notes of $1,000 or [EURO]1,000, as the case may be, or less shall be
redeemed in part. Notices of redemption shall be mailed by first class mail at
least 30 but not more than 60 days before the redemption date to each holder of
notes to be redeemed at its registered address. For so long as the notes are
listed on the Luxembourg Stock Exchange and the rules of such exchange so
require, the Issuer will cause a notice of redemption of the notes to be
published in a daily newspaper with general circulation in Luxembourg (which is
expected to be the LUXEMBOURG WORT). Notices of redemption may not be
conditional.
If any note is to be redeemed in part only, the notice of redemption that
relates to that note shall state the portion of the principal amount thereof to
be redeemed. A new note in principal amount equal to the unredeemed portion of
the original note will be issued in the name of the Holder thereof upon
cancellation of the original note. Notes called for redemption become due on the
date fixed for redemption. On and after the redemption date, interest ceases to
accrue on notes or portions of them called for redemption.
CERTAIN COVENANTS
RESTRICTED PAYMENTS
The Issuer will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or distribution on
account of the Issuer's or any of its Restricted Subsidiaries' Equity
Interests (including, without limitation, any payment in connection with any
merger or consolidation involving the Issuer or any of its Restricted
Subsidiaries) or to the direct or indirect holders of the Issuer's or any of
its Restricted Subsidiaries' Equity Interests in their capacity as such
(other than dividends or distributions payable in Equity Interests (other
than Disqualified Stock) of the Issuer or to the Issuer or a Restricted
Subsidiary of the Issuer);
(2) purchase, redeem or otherwise acquire or retire for value (including,
without limitation, in connection with any merger or consolidation involving
the Issuer) any Equity Interests of the Issuer or any direct or indirect
parent of the Issuer;
(3) make any payment on or with respect to, or purchase, redeem, defease or
otherwise acquire or retire for value any Indebtedness that is subordinated
to the notes or the Subsidiary Guaranties, except a payment of interest or
principal at the Stated Maturity thereof; or
(4) make any Restricted Investment (all such payments and other actions set
forth in clauses (1) through (4) above being collectively referred to as
"Restricted Payments"),
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unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default shall have occurred and be continuing or
would occur as a consequence thereof; and
(2) the Issuer would, at the time of such Restricted Payment and after giving
pro forma effect thereto as if such Restricted Payment had been made at the
beginning of the applicable four-quarter period, have been permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in the first paragraph of the covenant
described below under the caption "--Incurrence of Indebtedness and Issuance
of Preferred Stock;" and
(3) such Restricted Payment, together with the aggregate amount of all other
Restricted Payments made by the Issuer and its Restricted Subsidiaries after
the date of the indentures (excluding Restricted Payments permitted by
clauses (2), (3) and (4) of the next succeeding paragraph), is less than the
sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Issuer for the period (taken
as one accounting period) from March 31, 1999 to the end of the Issuer's
most recently ended fiscal quarter for which internal financial
statements are available at the time of such Restricted Payment (or, if
such Consolidated Net Income for such period is a deficit, less 100% of
such deficit), PLUS
(b) 100% of the aggregate net cash proceeds or fair market value of
Productive Assets received by the Issuer since the date of the Indentures
as a contribution to its common equity capital or from the issue or sale
of Equity Interests of the Issuer (other than Disqualified Stock) or from
the issue or sale of convertible or exchangeable Disqualified Stock or
convertible or exchangeable debt securities of the Issuer that have been
converted into or exchanged for such Equity Interests (other than Equity
Interests (or Disqualified Stock or debt securities) sold to a Subsidiary
of the Issuer), PLUS
(c) to the extent that any Restricted Investment that was made after the
dates of the indentures is sold for cash or otherwise liquidated or
repaid for cash, the lesser of (i) the cash return of capital with
respect to such Restricted Investment (less the cost of disposition, if
any) and (ii) the initial amount of such Restricted Investment; PLUS
(d) without duplication of any amounts included in clause (b) above, 100% of
the aggregate Net Cash Proceeds or the fair market value of Productive
Assets received by the Issuer as common equity contributions by a holder
of the Equity Interests of the Issuer (excluding any net cash proceeds
from an equity contribution which has been financed, directly or
indirectly using funds (1) borrowed from the Issuer or any of its
Subsidiaries, unless and until and to the extent such borrowing is repaid
or (2) contributed, extended, guaranteed or advanced by the Issuer or by
any of its Subsidiaries); PLUS
(e) any dividends paid in cash or Productive Assets received by the Issuer
or a Restricted Subsidiary of the Issuer after the date of the Indenture
from any Unrestricted Subsidiary to the extent that such dividends were
not otherwise included in Consolidated Net Income; PLUS
(f) to the extent that any Unrestricted Subsidiary is redesignated as a
Restricted Subsidiary after the date of the Indentures, the fair market
value of the Issuer's Investment in such Subsidiary (which consists of
cash or Productive Assets) as of the date of such redesignation.
So long as no Default has occurred and is continuing or would be caused
thereby, the preceding provisions will not prohibit:
(1) the payment of any dividend within 60 days after the date of declaration
thereof, if at said date of declaration, such payment would have complied
with the provisions of the indentures;
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(2) the redemption, repurchase, retirement, defeasance or other acquisition of
any subordinated Indebtedness of DASI the Issuer or any Guarantor or of any
Equity Interests of DASI, the Issuer or any Restricted Subsidiary in
exchange for, or out of the net cash proceeds of the substantially
concurrent sale (other than to a Subsidiary of the Issuer) of, Equity
Interests of the Issuer (other than Disqualified Stock); PROVIDED that the
amount of any such net cash proceeds that are utilized for any such
redemption, repurchase, retirement, defeasance or other acquisition shall
be excluded from clause (3) (b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase or other acquisition of subordinated
Indebtedness of the Issuer or any Guarantor with the net cash proceeds from
an incurrence of Permitted Refinancing Indebtedness;
(4) the payment of any dividend by a Restricted Subsidiary of the Issuer to the
holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of
any Equity Interests of DASI, the Issuer or any Restricted Subsidiary of
the Issuer held by any employee, officer or director (in each case either
current or former) of the Issuer (or any of its Restricted Subsidiaries')
pursuant to any management equity subscription agreement or stock plan;
PROVIDED that the aggregate price paid for all such repurchased, redeemed,
acquired or retired Equity Interests shall not exceed $5.0 million in any
twelve-month period;
(6) cash dividends or loans from the Issuer to DASI for the purpose of
permitting DASI to pay its ordinary operating expenses (including, without
limitation, directors' fees, indemnification obligations, professional fees
and expenses, etc.) in an aggregate amount not to exceed $5.0 million in
any twelve-month period;
(7) payments to DASI not to exceed $100,000 in any fiscal year, solely to
enable DASI to make payments to holders of its Capital Stock in lieu of
issuance of fractional shares of its Capital Stock;
(8) repurchases of Capital Stock deemed to occur upon the exercise of stock
options if such Capital Stock represents a portion of the exercise price
thereof;
(9) the declaration and payment of dividends to holders of any class or series
of Designated Preferred Stock (other than Disqualified Capital Stock)
issued after the issue date; PROVIDED that, at the time of such issuance,
the Issuer, after giving effect to such issuance on a pro forma basis,
would have had a Fixed Charge Coverage Ratio of at least 2.0 to 1.0;
(10) other Restricted Payments in an aggregate amount not to exceed $10.0
million since the date of the Indentures;
(11) the distribution, as a dividend or otherwise, of shares of Capital Stock
of any Unrestricted Subsidiary of the Issuer;
(12) cash dividends or loans from the Issuer to DASI in amounts equal to
amounts required for DASI to pay franchise taxes and Federal, state and
local taxes to the extent such income taxes are attributable to the income
of the Issuer and its Restricted Subsidiaries; and
(13) dividends from the Issuer to DASI in an amount sufficient to pay dividends
on DASI's 7 1/2% Convertible Trust Preferred Securities Due 2028, that are
outstanding on the issue date of the Notes.
The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued to or by the Issuer or such Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any assets or securities that are required to be valued by this
covenant shall
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be determined by the Board of Directors whose resolution with respect thereto
shall be delivered to the Trustee. The Board of Directors' determination must be
based upon an opinion or appraisal issued by an accounting, appraisal or
investment banking firm of national standing if the fair market value exceeds
$10.0 million. Not later than the date of making any Restricted Payment, the
Issuer shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this "Restricted Payments" covenant were computed,
together with a copy of any fairness opinion or appraisal required by the
indentures.
INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK
The Issuer will not, and will not permit any of its Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, "incur") any Indebtedness (including Acquired Debt), and the
Issuer will not issue any Disqualified Stock and will not permit any of its
Subsidiaries to issue any shares of preferred stock; PROVIDED, HOWEVER, that the
Issuer may incur Indebtedness (including Acquired Debt) or issue Disqualified
Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or
issue preferred stock, if, in each case, the Fixed Charge Coverage Ratio for the
Issuer's most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date on which such
additional Indebtedness is incurred or such Disqualified Stock or preferred
stock is issued would have been at least 2.0 to 1.0, determined on a pro forma
basis (including a pro forma application of the net proceeds therefrom), as if
the additional Indebtedness had been incurred or the preferred stock or
Disqualified Stock had been issued, as the case may be, at the beginning of such
four-quarter period.
The first paragraph of this covenant will not prohibit the incurrence of any
of the following items of Indebtedness (collectively, "Permitted Debt"):
(1) the incurrence by the Issuer and any Restricted Subsidiary of Indebtedness
and letters of credit under Credit Facilities in an aggregate principal
amount at any one time outstanding under this clause (1)(with letters of
credit being deemed to have a principal amount equal to the maximum
potential liability of the Issuer and its Restricted Subsidiaries
thereunder) not to exceed $950.0 million LESS any mandatory prepayments
actually made thereunder (to the extent, in the case of payments of
revolving credit Indebtedness, that the corresponding commitments have been
permanently reduced) or scheduled payments actually made thereunder (other
than the repayment of the Interim Term Loan using the net proceeds of the
initial offering);
(2) the incurrence by the Issuer and its Restricted Subsidiaries of the
Existing Indebtedness;
(3) the incurrence by the Issuer and the Guarantors of Indebtedness represented
by the notes and the related Guaranties to be issued on the date of the
indentures and the exchange notes and the related Guaranties to be issued
pursuant to the registration rights agreements;
(4) the incurrence by the Issuer or any of its Restricted Subsidiaries of
Indebtedness represented by Capital Lease Obligations, mortgage financings
or purchase money obligations, in each case, incurred for the purpose of
financing all or any part of the purchase price or cost of construction or
improvement of property, plant or equipment used in the business of the
Issuer or such Restricted Subsidiary, in an aggregate principal amount,
including all Permitted Refinancing Indebtedness incurred to refund,
refinance or replace any Indebtedness incurred pursuant to this clause (4),
not to exceed 5% of Total Assets at any time outstanding;
(5) the incurrence by the Issuer or any of its Restricted Subsidiaries of
Permitted Refinancing Indebtedness in exchange for, or the net proceeds of
which are used to refund, refinance or replace Indebtedness (other than
intercompany Indebtedness) that was permitted by the
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Indenture to be incurred under the first paragraph of this covenant or
clauses (2), (3), (4), (5), or (10) of this paragraph;
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of
intercompany Indebtedness between or among the Issuer and any of its
Restricted Subsidiaries; PROVIDED, HOWEVER, that:
(a) if the Issuer or any Guarantor is the obligor on such Indebtedness,
such Indebtedness must be expressly subordinated to the prior payment
in full in cash of all Obligations with respect to the Notes, in the
case of the Issuer, or the Guaranty of such Guarantor, in the case of a
Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests that
results in any such Indebtedness being held by a Person other than the
Issuer or a Restricted Subsidiary thereof and (ii) any sale or other
transfer of any such Indebtedness to a Person that is not either the
Issuer or a Restricted Subsidiary thereof; shall be deemed, in each
case, to constitute an incurrence of such Indebtedness by the Issuer or
such Subsidiary, as the case may be, that was not permitted by this
clause (6);
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of
Hedging Obligations that are incurred for the purpose of fixing or hedging
interest rate risk with respect to any floating rate Indebtedness that is
permitted by the terms of the indentures to be outstanding or to hedge
exposure to foreign currency fluctuations or commodity price risk with
respect to any commodity purchases;
(8) (a) the guarantee by the Issuer or any of the Guarantors of Indebtedness of
the Issuer or a Guarantor that was permitted to be incurred by another
provision of this covenant; and
(b) the guarantee by any Restricted Subsidiary of the Issuer that is not a
Guarantor of Indebtedness of another Restricted Subsidiary of the
Issuer that is not a Guarantor that was permitted to be incurred by
another provision of this covenant;
(9) the accrual of interest, the accretion or amortization of original issue
discount, the payment of interest on any Indebtedness in the form of
additional Indebtedness with the same terms, and the payment of dividends
on Disqualified Stock in the form of additional shares of the same class of
Disqualified Stock: PROVIDED, in each such case, that the amount thereof is
included in Fixed Charges of the Issuer as accrued;
(10) the incurrence by the Issuer or any of the Restricted Subsidiaries of
additional Indebtedness or Disqualified Stock in an aggregate principal
amount (or accreted value, as applicable) at any time outstanding,
including all Permitted Refinancing Indebtedness incurred to refund,
refinance or replace any Indebtedness incurred pursuant to this clause
(10), not to exceed $50.0 million;
(11) the incurrence by the Issuer's Unrestricted Subsidiaries of Non-Recourse
Debt, PROVIDED, HOWEVER, that if any such Indebtedness ceases to be
Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be
deemed to constitute an incurrence of Indebtedness by a Restricted
Subsidiary of the Issuer that was not permitted by this clause (11);
(12) the incurrence of Indebtedness (including letters of credit) in respect of
workers' compensation claims, self-insurance obligations, performance,
surety, bid or similar bonds and completion guarantees provided by the
Issuer or one of its Restricted Subsidiaries in the ordinary course of
business and consistent with past practices;
(13) Indebtedness arising from agreements of the Issuer or a Restricted
Subsidiary providing for indemnification, adjustment of purchase price,
earn out or other similar obligations, in each case, incurred or assumed
in connection with the disposition of any business, assets or a Restricted
Subsidiary, other than guarantees of Indebtedness incurred by any Person
acquiring all or any
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portion of such business, assets or Restricted Subsidiary for the purpose
of financing such acquisition; PROVIDED that the maximum assumable
liability in respect of all such Indebtedness shall at no time exceed the
gross proceeds actually received by the Issuer and its Restricted
Subsidiaries in connection with such disposition;
(14) the incurrence by a Securitization Entity of Indebtedness in a Qualified
Securitization Transaction that is Non-Recourse Debt (except for Standard
Securitization Undertakings) with respect to the Issuer and its other
Restricted Subsidiaries;
(15) Indebtedness of the Issuer evidenced by promissory notes subordinated to
the Notes and the Exchange Notes issued to employees of the Issuer and its
Subsidiaries in lieu of cash payment for at any time Equity Interest of
DASI being repurchased from such employees; PROVIDED; that the aggregate
amount of such Indebtedness does not exceed $5.0 million at any one time
outstanding;
(16) guaranties of Indebtedness of any other person incurred by the Issuer or a
Restricted Subsidiary in the ordinary course of business in an aggregate
principal amount not to exceed $5.0 million at any one time outstanding;
and
(17) Indebtedness consisting of take-or-pay obligations contained in supply
agreements entered into by the Issuer or its Subsidiaries in the ordinary
course.
LIMITATION ON FOREIGN INDEBTEDNESS
The Issuer will not permit any Restricted Subsidiary of the Issuer that is
not a Guarantor to, directly or indirectly, incur any Indebtedness (including
Acquired Indebtedness) unless:
(1) after giving effect to the incurrence of such Indebtedness and the receipt
of the application of the proceeds thereof;
(a) if, as a result of the incurrence of such Indebtedness such Restricted
Subsidiary will become subject to any restriction or limitation on the
payment of dividends or the making of other distributions,
(i) the Fixed Charge Coverage Ratio of Restricted Subsidiaries that are
not Guarantors (determined on a pro forma basis for the last four
fiscal quarters for which financial statements are available at the
date of determination) is greater than 2.5 to 1; and
(ii) the Issuer's Fixed Charge Coverage Ratio (determined on a pro
forma basis for the last four fiscal quarters of the Issuer for
which financial statements are available at the date of
determination) is greater than 2.0 to 1; and
(b) in any other case, the Issuer's Fixed Charge Coverage Ratio (determined
on a pro forma basis for the last four fiscal quarters of the Issuer
for which financial statements are available at the date of
determination) is greater than 2.0 to 1; and
(2) no Default or Event of Default shall have occurred and be continuing at the
time or as a consequence of the incurrence of such Indebtedness.
In the event that any Indebtedness incurred pursuant to clause (1)(b) of the
foregoing paragraph is proposed to be amended, modified or otherwise
supplemented such that the payment of dividends or the making of other
distributions becomes subject in any manner to any restriction or limitation,
the Issuer will not permit the Restricted Subsidiary to so amend, modify or
supplement such Indebtedness unless such Indebtedness could be incurred pursuant
to the terms of clause (1)(a) of the foregoing paragraph.
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All calculations required under the prior two paragraphs hereof shall be
made in a manner consistent with the calculations required under the covenant
described under "Incurrence of Indebtedness and Issuance of Preferred Stock."
LIENS
The Issuer will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly, create, incur, assume or suffer to exist any Lien of
any kind on any asset now owned or hereafter acquired, except Permitted Liens.
DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED SUBSIDIARIES
The Issuer will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly, create or permit to exist or become effective any
consensual encumbrance or restriction on the ability of any Restricted
Subsidiary to:
(1) pay dividends or make any other distributions on its Capital Stock to the
Issuer or any of its Restricted Subsidiaries, or with respect to any other
interest or participation in, or measured by, its profits, or pay any
indebtedness owed to the Issuer or any of its Restricted Subsidiaries;
(2) make loans or advances to the Issuer or any of its Restricted Subsidiaries;
or
(3) transfer any of its properties or assets to the Issuer or any of its
Restricted Subsidiaries.
However, the preceding restrictions will not apply to encumbrances or
restrictions existing under or by reason of:
(1) Existing Indebtedness as in effect on the date of the indentures;
(2) the indentures, the notes and the Guaranties;
(3) Indebtedness incurred by a Restricted Subsidiary that is not a Guarantor in
compliance with the provisions set forth under the caption "--Limitation on
Foreign Indebtedness."
(4) applicable law, regulation or order;
(5) any instrument governing Indebtedness or Capital Stock of a Person acquired
by the Issuer or any of its Restricted Subsidiaries as in effect at the
time of such acquisition (except to the extent such Indebtedness was
incurred in connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person, or the property
or assets of the Person, so acquired, PROVIDED that, in the case of
Indebtedness, such Indebtedness was permitted by the terms of the
indentures to be incurred;
(6) customary non-assignment provisions in leases entered into in the ordinary
course of business and consistent with past practices;
(7) purchase money obligations for property acquired in the ordinary course of
business that impose restrictions on the property so acquired of the nature
described in clause (3) of the preceding paragraph;
(8) any agreement for the sale or other disposition of a Restricted Subsidiary
that restricts distributions by that Restricted Subsidiary pending its sale
or other disposition;
(9) Liens securing Indebtedness that limit the right of the debtor to dispose
of the assets subject to such Lien;
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(10) provisions with respect to the disposition or distribution of assets or
property in joint venture agreements, assets sale agreements, stock sale
agreements and other similar agreements entered into in the ordinary
course of business;
(11) restrictions on cash or other deposits or net worth imposed by customers
under contracts entered into in the ordinary course of business;
(12) customary provisions in agreements with respect to Permitted Joint
Ventures;
(13) Indebtedness incurred after the date of the indentures in accordance with
the terms of the Indenture; provided; that the restrictions contained in
the agreements governing such new Indebtedness are, in the good faith
judgment of the Board of Directors of the Issuer, not materially less
favorable, taken as a whole, to the holders of the notes than those
contained in the agreements governing Indebtedness outstanding on the date
of the indentures;
(14) any encumbrance or restriction of a Securitization Entity effected in
connection with a Qualified Securitization Transaction; and
(15) any encumbrances or restrictions imposed by any amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements
or refinancings of the contracts, instruments or obligations referred to
in clauses (1) through (14) above; provided that such amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings are, in the good faith judgment of the Board
of Directors, no more restrictive with respect to such dividend and other
payment restrictions prior to such amendment, modification, restatement,
renewal, increase, supplement, refunding, replacement or refinancing.
MERGER, CONSOLIDATION OR SALE OF ASSETS
The Issuer may not, directly or indirectly: (1) consolidate or merge with or
into another Person (whether or not the Issuer is the surviving corporation); or
(2) sell, assign, transfer, convey or otherwise dispose of all or substantially
all of the properties or assets of the Issuer and its Restricted Subsidiaries
taken as a whole, in one or more related transactions, to another Person;
unless:
(1) either: (a) the Issuer is the surviving corporation; or (b) the Person
formed by or surviving any such consolidation or merger (if other than the
Issuer) or to which such sale, assignment, transfer, conveyance or other
disposition shall have been made is a corporation, partnership, limited
liability company or trust organized or existing under the laws of the
United States, any state thereof or the District of Columbia;
(2) the Person formed by or surviving any such consolidation or merger (if other
than the Issuer) or the Person to which such sale, assignment, transfer,
conveyance or other disposition shall have been made assumes all the
obligations of the Issuer under the notes, the Indentures and the
registration rights agreements pursuant to agreements reasonably
satisfactory to the Trustee;
(3) immediately after such transaction no Default or Event of Default exists;
and
(4) the Issuer or the Person formed by or surviving any such consolidation or
merger (if other than the Issuer), or to which such sale, assignment,
transfer, conveyance or other disposition shall have been made will, on the
date of such transaction after giving pro forma effect thereto and any
related financing transactions as if the same had occurred at the beginning
of the applicable four-quarter period, be permitted to incur at least $1.00
of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test
set forth in the first paragraph of the covenant described above under the
caption "--Incurrence of Indebtedness and Issuance of Preferred Stock."
In addition, the Issuer may not, directly or indirectly, lease all or
substantially all of its properties or assets, in one or more related
transactions, to any other Person. This "Merger, Consolidation or Sale
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of Assets" covenant will not apply to a sale, assignment, transfer, conveyance
or other disposition of assets between or among the Issuer and any of the
Guarantors.
TRANSACTIONS WITH AFFILIATES
The Issuer will not, and will not permit any of its Restricted Subsidiaries
to, make any payment to, or sell, lease, transfer or otherwise dispose of any of
its properties or assets to, or purchase any property or assets from, or enter
into or make or amend any transaction, contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of, any Affiliate (each, an
"Affiliate Transaction"), unless:
(1) such Affiliate Transaction is on terms that are no less favorable to the
Issuer or the relevant Restricted Subsidiary than those that would have been
obtained in a comparable transaction by the Issuer or such Restricted
Subsidiary with an unrelated Person; and
(2) the Issuer delivers to the Trustee:
(a) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $5.0 million,
a resolution of the Board of Directors set forth in an Officers'
Certificate certifying that such Affiliate Transaction complies with this
covenant and that such Affiliate Transaction has been approved by a
majority of the disinterested members of the Board of Directors; and
(b) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $15.0
million, an opinion as to the fairness to the Issuer or the relevant
Restricted Subsidiary of such Affiliate Transaction from a financial
point of view issued by an accounting, appraisal or investment banking
firm of national standing.
The following items shall not be deemed to be Affiliate Transactions and,
therefore, will not be subject to the provisions of the prior paragraph:
(1) any employment agreement entered into by the Issuer or any of its
Restricted Subsidiaries in the ordinary course of business and consistent
with the past practice of the Issuer or such Restricted Subsidiary;
(2) transactions between or among the Issuer and/or its Restricted
Subsidiaries;
(3) payment of reasonable directors fees to Persons who are not otherwise
Affiliates of the Issuer;
(4) sales of Equity Interests (other than Disqualified Stock) to Affiliates of
the Issuer; and
(5) Restricted Payments that are permitted by the provisions of the indentures
described above under the caption "--Restricted Payments;"
(6) providing indemnity to officers, directors, or employees of the Issuer or
any of its Subsidiaries as determined in good faith by the Board of
Directors of the Issuer;
(7) the payment of customary management, consulting and advisory fees and
related expenses to Hidden Creek Industries or its affiliates consistent
with past practices, including, without limitation, in connection with
acquisitions, divestitures or financings by DASI, the Issuer or any of the
Issuer's Restricted Subsidiaries;
(8) the existence of, or the performance by the Issuer or any of its Restricted
Subsidiaries of its obligations under the terms of, any agreement to which
it is a party as of the date of the Indentures, and any similar agreements
which it may enter into thereafter; provided, however, that the existence
of, or the performance by the Issuer or any of its Restricted Subsidiaries
of obligations under, any future amendment to any such existing agreement
or under any similar agreement entered into after the date of the
indentures shall only be permitted by this clause to
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the extent that the terms of any such amendment or similar agreement are
not disadvantageous to the holders in any material respect;
(9) transactions effected as part of a Qualified Securitization Transaction;
(10) transactions with customers, joint venture partners, clients and
suppliers, in each case in the ordinary course of business and otherwise
in compliance with the terms of the Indentures which are fair to the
Issuer or its Restricted Subsidiaries, in the reasonable determination of
the Board of Directors of the Issuer;
(11) the grant of stock options, restricted stock or similar rights to the
Issuer's employees, directors and consultants pursuant to plans approved
by the Board of Directors of the Issuer; and
(12) loans or advances to employees or consultants in the ordinary course of
business and consistent with past practices, which are approved by a
majority of the Board of Directors of the Issuer in good faith.
ADDITIONAL SUBSIDIARY GUARANTIES
If the Issuer or any of its Restricted Subsidiaries acquires or creates
another material Domestic Restricted Subsidiary after the dates of the
indentures and the newly acquired or created material Domestic Restricted
Subsidiary guarantees any obligations under any Credit Facility, then that newly
acquired or created Domestic Restricted Subsidiary must become a Guarantor and
execute supplemental indentures and deliver an Opinion of Counsel to the Trustee
within 10 Business Days of the date on which it guaranteed any obligation under
any of the Credit Facilities. If any Subsidiary that is not a Guarantor at any
time guaranties Indebtedness of the Issuer or a Guarantor, the Issuer will cause
such Subsidiary to simultaneously execute and deliver supplemental indentures
providing for the guaranty of the payment of the notes by such Subsidiary.
DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if that designation would not cause a Default. If a
Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate
fair market value of all outstanding Investments owned by the Issuer and its
Restricted Subsidiaries in the Subsidiary so designated will be deemed to be an
Investment made as of the time of such designation and will either reduce the
amount available for Restricted Payments under the first paragraph of the
covenant described above under the caption "--Restricted Payments" or reduce the
amount available for future Investments under one or more clauses of the
definition of Permitted Investments, as the Issuer shall determine. That
designation will only be permitted if such Investment would be permitted at that
time and if such Restricted Subsidiary otherwise meets the definition of an
Unrestricted Subsidiary. The Board of Directors may redesignate any Unrestricted
Subsidiary to be a Restricted Subsidiary if the redesignation would not cause a
Default.
NO SENIOR SUBORDINATED DEBT
The Issuer shall not incur, create, issue, assume, guarantee or otherwise
become liable for any Indebtedness that is subordinate or junior in right of
payment to any Indebtedness of the Issuer and senior in any respect in right of
payment to the notes. No Guarantor shall incur, create, issue, assume, guarantee
or otherwise become liable for any Indebtedness that is subordinate or junior in
right of payment to any Indebtedness of such Guarantor and senior in any respect
in right of payment to such Guarantor's Guaranty.
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PAYMENTS FOR CONSENT
The Issuer and DASI will not, and will not permit any of their Subsidiaries
to, directly or indirectly, pay or cause to be paid any consideration to or for
the benefit of any holder of notes for or as an inducement to any consent,
waiver or amendment of any of the terms or provisions of the indentures or the
notes issued thereunder unless such consideration is offered to be paid and is
paid to all holders of such notes that consent, waive or agree to amend in the
time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
REPORTS
Whether or not required by the SEC, so long as any notes are outstanding,
the Issuer will furnish to the holders of notes, within five days of filing such
reports with the SEC:
(1) all quarterly and annual financial information that would be required to be
contained in a filing with the SEC on Forms 10-Q and 10-K if the Issuer were
required to file such Forms, including a "Management's Discussion and
Analysis of Results of Operations and Financial Condition" and, with respect
to the annual information only, a report on the annual financial statements
by the Issuer's certified independent accountants; and
(2) all current reports that would be required to be filed with the SEC on Form
8-K if the Issuer were required to file such reports.
In addition, following the consummation of the exchange offer contemplated
by the registration rights agreements, whether or not required by the SEC, the
Issuer will file a copy of all of the information and reports referred to in
clauses (1) and (2) above with the SEC for public availability within the time
periods specified in the SEC's rules and regulations (unless the SEC will not
accept such a filing) and make such information available to securities analysts
and prospective investors upon request. In addition, the Issuer and the
Guarantors have agreed that, for so long as any notes remain outstanding, they
will furnish to the holders and to securities analysts and prospective
investors, upon their request, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act. Reports and other filings made by
DASI that include all of the information referred to in clauses (1) and (2)
above with respect to DASI and its consolidated subsidiaries shall be deemed to
satisfy the obligations of the Issuer and/or the Guarantors set forth above as
long as such reports and filings include the information required by the Staff
of the SEC under its interpretations of SAB 53; PROVIDED that DASI does not have
any business operations other than those conducted through the Issuer.
EVENTS OF DEFAULT AND REMEDIES
Each of the following is an Event of Default:
(1) default for 30 days in the payment when due of interest on, or Liquidated
Damages with respect to, any notes whether or not prohibited by the
subordination provisions of the indentures;
(2) default in payment when due of the principal of, or premium, if any, on the
notes whether or not prohibited by the subordination provisions of the
indentures;
(3) failure by the Issuer or any of its Restricted Subsidiaries to comply with
the provisions described under the caption "--Certain Covenants--Merger,
Consolidation or Sale of Assets;"
(4) failure by the Issuer or any of its Restricted Subsidiaries for 60 days
after notice to comply with any of the other agreements in the indentures;
(5) default under any mortgage, indenture or instrument under which there is
issued and outstanding any Indebtedness for money borrowed by the Issuer or
any of its Restricted Subsidiaries (or the
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payment of which is guaranteed by the Issuer or any of its Restricted
Subsidiaries) whether such Indebtedness or guarantee now exists, or is
created after the dates of the indentures, if that default:
(a) is caused by a failure to pay principal of, or interest or premium, if
any, on such Indebtedness prior to the expiration of the grace period
provided in such Indebtedness on the date of such default (a "Payment
Default"); or
(b) results in the acceleration of such Indebtedness prior to its express
maturity,
and, in each case, the principal amount of any such Indebtedness, together
with the principal amount of any other such Indebtedness the maturity of
which has been so accelerated, aggregates $20.0 million or more;
(6) failure by the Issuer or any of its Restricted Subsidiaries to pay final
judgments aggregating in excess of $20.0 million, which judgments are not
paid, vacated, discharged, stayed or non-appealable for a period of 60 days,
and in the event such judgment is covered by insurance, an enforcement
proceeding has been commenced by any creditor upon such judgment or decree
which is not promptly stayed;
(7) except as permitted by the indentures, any Guaranty shall be held in any
judicial proceeding to be unenforceable or invalid or shall cease for any
reason to be in full force and effect or any Guarantor, or any Person acting
on behalf of any Guarantor, shall deny or disaffirm its obligations under
its Subsidiary Guaranty or DASI, or any Person acting on behalf of DASI,
shall deny or disaffirm its obligations under the Parent Guaranty; and
(8) certain events of bankruptcy or insolvency with respect to DASI, the Issuer
or any of its Significant Subsidiaries.
In the case of an Event of Default arising from certain events of bankruptcy
or insolvency, with respect to the Issuer, any Subsidiary that is a Significant
Subsidiary or any group of Subsidiaries that, taken together, would constitute a
Significant Subsidiary, all outstanding notes will become due and payable
immediately without further action or notice. If any other Event of Default
occurs and is continuing, the Trustee or the holders of at least 25% in
principal amount of the then outstanding dollar notes or at least 25% in
principal amount of the then outstanding euro notes, as the case may be, may
declare all the dollar notes or the euro notes, as the case may be, to be due
and payable immediately.
Holders of the notes may not enforce the indentures or the notes except as
provided in the indentures. Subject to certain limitations, holders of a
majority in principal amount of the then outstanding dollar notes or euro notes,
as the case may be, may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from holders of the notes notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest or Liquidated Damages) if it
determines that withholding notice is in their interest.
The holders of a majority in aggregate principal amount of the applicable
notes then outstanding by notice to the Trustee may on behalf of the holders of
all of the applicable Notes waive any existing Default or Event of Default and
its consequences under the applicable Indenture except a continuing Default or
Event of Default in the payment of interest or Liquidated Damages on, or the
principal of, the applicable notes.
The Issuer is required to deliver to the Trustee annually a statement
regarding compliance with the Indentures. Upon becoming aware of any Default or
Event of Default, the Issuer is required to deliver to the Trustee a statement
specifying such Default or Event of Default.
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NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
No director, officer, employee, incorporator or stockholder of DASI, the
Issuer or any Guarantor, as such, shall have any liability for any obligations
of the Issuer or the Guarantors under the notes, the Indentures, the Subsidiary
Guaranties, the Parent Guaranty or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each holder of notes by accepting
a note waives and releases all such liability. The waiver and release are part
of the consideration for issuance of the notes. The waiver may not be effective
to waive liabilities under the federal securities laws.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Under each indenture, the Issuer may, at its option and at any time, elect
to have all of its obligations discharged with respect to any outstanding notes
under such Indenture and all obligations of the Guarantors discharged with
respect to their Guaranties ("Legal Defeasance") except for:
(1) the rights of holders of outstanding notes to receive payments in respect of
the principal of, or interest or premium and Liquidated Damages, if any, on
such notes when such payments are due from the trust referred to below;
(2) the Issuer's obligations with respect to the notes concerning issuing
temporary Notes, registration of notes, mutilated, destroyed, lost or stolen
notes and the maintenance of an office or agency for payment and money for
security payments held in trust;
(3) the rights, powers, trusts, duties and immunities of the Trustee, and the
Issuer's and the Guarantor's obligations in connection therewith; and
(4) the Legal Defeasance provisions of applicable indenture.
In addition, the Issuer may, at its option and at any time, elect to have
the obligations of the Issuer and the Guarantors released with respect to
certain covenants that are described in the indentures ("Covenant Defeasance")
and thereafter any omission to comply with those covenants shall not constitute
a Default or Event of Default with respect to the notes. In the event Covenant
Defeasance occurs, certain events (not including non-payment, bankruptcy,
receivership, rehabilitation and insolvency events) described under "Events of
Default" will no longer constitute an Event of Default with respect to the
notes.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(1) the Issuer must irrevocably deposit with the Trustee, in trust, for the
benefit of the applicable holders of the notes, cash in U.S. Dollars,
non-callable Government Securities, or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally recognized
firm of independent public accountants, to pay the principal of, or interest
and premium and Liquidated Damages, if any, on such outstanding notes on the
stated maturity or on the applicable redemption date, as the case may be,
and the Issuer must specify whether the notes are being defeased to maturity
or to a particular redemption date;
(2) in the case of Legal Defeasance, the Issuer shall have delivered to the
Trustee an Opinion of Counsel reasonably acceptable to the Trustee
confirming that (a) the Issuer has received from, or there has been
published by, the Internal Revenue Service a ruling or (b) since the date of
the applicable Indenture, there has been a change in the applicable federal
income tax law, in either case to the effect that, and based thereon such
Opinion of Counsel shall confirm that, the holders of the outstanding notes
will not recognize income, gain or loss for federal income tax purposes as a
result of such Legal Defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as would have
been the case if such Legal Defeasance had not occurred;
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(3) in the case of Covenant Defeasance, the Issuer shall have delivered to the
Trustee an Opinion of Counsel reasonably acceptable to the Trustee
confirming that the holders of such outstanding notes will not recognize
income, gain or loss for federal income tax purposes as a result of such
Covenant Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the
case if such Covenant Defeasance had not occurred;
(4) no Default or Event of Default shall have occurred and be continuing either:
(a) on the date of such deposit (other than a Default or Event of Default
resulting from the borrowing of funds to be applied to such deposit); or (b)
or insofar as Events of Default from bankruptcy or insolvency events are
concerned, at any time in the period ending on the 91st day after the date
of deposit;
(5) such Legal Defeasance or Covenant Defeasance will not result in a breach or
violation of, or constitute a default under any material agreement or
instrument (other than the applicable Indenture) to which the Issuer or any
of its Subsidiaries is a party or by which the Issuer or any of its
Subsidiaries is bound;
(6) the Issuer must have delivered to the Trustee an Opinion of Counsel to the
effect that, assuming no intervening bankruptcy of the Issuer or any
Guarantor between the date of deposit and the 91st day following the deposit
and assuming that no holder is an "insider" of the Issuer under applicable
bankruptcy law, after the 91st day following the deposit, the trust funds
will not be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally;
(7) the Issuer must deliver to the Trustee an Officers' Certificate stating that
the deposit was not made by the Issuer with the intent of preferring the
holders of such notes over the other creditors of the Issuer with the intent
of defeating, hindering, delaying or defrauding creditors of the Issuer or
others; and
(8) the Issuer must deliver to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent relating to
the Legal Defeasance or the Covenant Defeasance have been complied with.
AMENDMENT, SUPPLEMENT AND WAIVER
Except as provided in the next three succeeding paragraphs, neither the
indentures nor the notes issued thereunder may be amended or supplemented
without the consent of the holders of at least a majority in principal amount of
the applicable notes then outstanding (including, without limitation, consents
obtained in connection with a purchase of, or tender offer or exchange offer
for, notes), and any existing default or compliance with any provision of the
applicable Indenture or the applicable notes may be waived with the consent of
the holders of a majority in principal amount of the then outstanding applicable
notes (including, without limitation, consents obtained in connection with a
purchase of, or tender offer or exchange offer for, Notes).
Without the consent of each applicable holder affected, an amendment or
waiver may not (with respect to any notes held by a non-consenting holder):
(1) reduce the principal amount of notes whose holders must consent to an
amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of any note or alter
the provisions with respect to the redemption of the notes (other than
provisions relating to the covenants described above under the caption
"--Repurchase at the Option of Holders");
(3) reduce the rate of or change the time for payment of interest on any note;
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(4) waive a Default or Event of Default in the payment of principal of, or
interest or premium, or Liquidated Damages, if any, on the applicable notes
(except a rescission of acceleration of the notes by the holders of at least
a majority in aggregate principal amount of the applicable notes and a
waiver of the payment default that resulted from such acceleration);
(5) make any note payable in money other than that stated in the notes;
(6) make any change in the provisions of the applicable Indenture relating to
waivers of past Defaults or the rights of holders of notes to receive
payments of principal of, or interest or premium or Liquidated Damages, if
any, on the notes;
(7) waive a redemption payment with respect to any note (other than a payment
required by one of the covenants described above under the caption
"--Repurchase at the Option of Holders");
(8) release any Guarantor from any of its obligations under its Guaranty or the
applicable indenture, except in accordance with the terms of such indenture;
or
(9) make any change in the preceding amendment and waiver provisions.
In addition, any amendment to, or waiver of, the provisions of either
indenture relating to subordination that adversely affects the rights of the
holders of the applicable notes will require the consent of the holders of at
least 75% in aggregate principal amount of applicable notes then outstanding.
Notwithstanding the preceding, without the consent of any holder of
applicable notes, the Issuer, the Guarantors and the Trustee may amend or
supplement either indenture or the notes:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated notes in addition to or in place of
certificated notes;
(3) to provide for the assumption of the Issuer's obligations to holders of
notes in the case of a merger or consolidation or sale of all or
substantially all of the Issuer's assets;
(4) to make any change that would provide any additional rights or benefits to
the holders of notes or that does not adversely affect the legal rights
under the indenture of any such holder; or
(5) to comply with requirements of the SEC in order to effect or maintain the
qualification of the indenture under the Trust Indenture Act.
SATISFACTION AND DISCHARGE
Each indenture will be discharged and will cease to be of further effect as
to all notes issued thereunder, when:
(1) either:
(a) all applicable notes that have been authenticated (except lost, stolen
or destroyed notes that have been replaced or paid and notes for whose
payment money has theretofore been deposited in trust and thereafter
repaid to the Issuer) have been delivered to the Trustee for
cancellation; or
(b) all applicable notes that have not been delivered to the Trustee for
cancellation have become due and payable by reason of the making of a
notice of redemption or otherwise or will become due and payable within
one year and the Issuer or any Guarantor has irrevocably deposited or
caused to be deposited with the Trustee as trust funds in trust solely
for the benefit of such holders, cash in U.S. dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will
be sufficient without consideration of any reinvestment of interest, to
pay and discharge the entire indebtedness on such notes not
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delivered to the Trustee for cancellation for principal, premium and
Liquidated Damages, if any, and accrued interest to the date of maturity
or redemption;
(2) no applicable Default or Event of Default shall have occurred and be
continuing on the date of such deposit or shall occur as a result of such
deposit and such deposit will not result in a breach or violation of, or
constitute a default under, any other instrument to which the Issuer or any
Guarantor is a party or by which the Issuer or any Guarantor is bound;
(3) the Issuer or any Guarantor has paid or caused to be paid all sums payable
by it under the applicable indenture; and
(4) the Issuer has delivered irrevocable instructions to the Trustee under the
applicable Indenture to apply the deposited money toward the payment of the
applicable notes at maturity or the redemption date, as the case may be.
In addition, the Issuer must deliver an Officers' Certificate and an Opinion
of Counsel to the Trustee stating that all applicable conditions precedent to
satisfaction and discharge have been satisfied.
CONCERNING THE TRUSTEE
If the Trustee becomes a creditor of the Issuer or any Guarantor, the
indentures limit its right to obtain payment of claims in certain cases, or to
realize on certain property received in respect of any such claim as security or
otherwise. The Trustee will be permitted to engage in other transactions;
however, if it acquires any conflicting interest it must eliminate such conflict
within 90 days, apply to the SEC for permission to continue or resign.
The holders of a majority in principal amount of the then outstanding dollar
notes or euro notes, as the case may be, 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 Indentures provide
that in case an Event of Default shall occur and be continuing, 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 Indentures 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.
BOOK-ENTRY, DELIVERY AND FORM
The outstanding dollar notes are represented by one or more notes in
registered, global form ("dollar global notes') deposited with the Trustee as
custodian for DTC and registered in the name of Cede & Co., as nominee of DTC,
in each case for credit to the accounts of DTC Participants and indirect
participants (each as defined below) including, without limitation, Morgan
Guaranty Trust Company of New York, Brussels office, as operator (the "Euroclear
Operator") of the Euroclear System ("Euroclear") and Cedelbank ("Cedelbank").
The euro notes sold to "qualified institutional buyers" pursuant to Rule 144A
(the "Rule 144A euro notes") are represented by one or more notes in registered
global form deposited with the Trustee as custodian in DTC and registered in the
name of Cede & Co., as nominee of DTC, in each case for credit to the accounts
of DTC Participants and indirect participants. The euro notes sold to purchasers
under Regulation S are represented by a note in registered, global form (the
"Reg. S euro global note") deposited with the Industrial Bank of Japan
(Luxembourg) S.A. in Luxembourg as depositary (such capacity, the "Depositary")
for Euroclear. The Reg. S euro notes are not eligible for clearance through DTC,
except indirectly through DTC's participation in Euroclear. The exchange notes
will also be represented by one or more global notes.
Except in the limited circumstances set forth below, notes in certificated
form will not be issued.
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DEPOSITARY PROCEDURES
DTC. DTC has advised the Issuer as follows: DTC is a limited purpose trust
company 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
Uniform Commercial Code and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities for persons who have accounts with it ("DTC Participants") and to
facilitate the clearance and settlement of securities transactions between DTC
Participants through electronic book-entry changes in accounts of its
participants, thereby eliminating the need for physical movement of
certificates. DTC Participants include securities brokers and dealers, banks,
trust companies and clearing corporations and may include certain other
organizations. Indirect access to the DTC system is available to others such as
banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a DTC Participant, either directly or indirectly
("indirect participants").
EUROCLEAR AND CEDELBANK. The Issuer understands as follows with respect to
Euroclear and Cedelbank: Euroclear and Cedelbank each hold securities for their
account holders and facilitate the clearance and settlement of securities
transactions by electronic book-entry transfer between their respective account
holders, thereby eliminating the need for physical movements of certificates and
any risk from lack of simultaneous transfers of securities. Euroclear and
Cedelbank each provide various services including safekeeping, administration,
clearance and settlement of internationally traded securities and securities
lending and borrowing. Each of Euroclear and Cedelbank can settle securities
transactions in any of more than 30 currencies, including Euros. Euroclear and
Cedelbank each also deal with domestic securities markets in several countries
through established depository and custodial relationships. The respective
systems of Euroclear and Cedelbank have established an electronic bridge between
their two systems across which their respective account holders may settle
trades with each other. Account holders in both Euroclear and Cedelbank are
world-wide financial institutions including underwriters, securities brokers and
dealers, banks, trust companies and clearing corporations. Indirect access to
both Euroclear and Cedelbank is available to other institutions that clear
through or maintain a custodial relationship with an account holder of either
system. An account holder's overall contractual relations with either Euroclear
or Cedelbank are governed by the respective rules and operating procedures of
Euroclear or Cedelbank and any applicable laws. Both Euroclear and Cedelbank act
under such rules and operating procedures only on behalf of their respective
account holders and have no record of or relationship with any persons who are
not direct account holders.
Except as described below, owners of interests in the dollar global notes
and the euro global notes will not have notes registered in their names, will
not receive physical delivery of notes in certificated form and will not be
considered the registered owners or holders of notes for any purpose. So long as
DTC (or its nominee) or the Depositary, as the case may be, is the registered
owner or holder of a global note, such party will be considered the sole owner
or holder of the notes represented by such global note for all purposes under
the indentures and the notes. Accordingly, each person owning a beneficial
interest in a global note must rely on the procedures of DTC, Euroclear and
Cedelbank, as the case may be, and their participants or account holders to
exercise any rights and remedies of a holder of notes under the indentures.
Payments of principal and interest on the global notes will be made to DTC or
its nominee, or to the Depositary on behalf of Euroclear and Cedelbank, as the
case may be, as the registered owners thereof.
The laws of some countries and some states in the United States require that
certain persons take physical delivery in definitive form of securities that
they own. Consequently, the ability to transfer beneficial interests in a global
note to such persons may be limited to that extent. Because DTC, Euroclear and
Cedelbank can act only on behalf of their respective participants or account
holders, as the case may be, the ability of a person having beneficial interests
in a global note to pledge such interests to persons or entities that do not
participate in the relevant clearing system, or otherwise take
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actions in respect of such interests, may be affected by the lack of a physical
certificate evidencing such interests.
PAYMENTS ON THE GLOBAL NOTES
Payments in respect of the principal of, premium, if any, and interest on a
global note will be made through a payment agent appointed pursuant to the
applicable indenture and will be payable to DTC (or its nominee) or the
Depositary on behalf of Euroclear, as the case may be, each in its capacity as
the registered holder of such notes under such indentures. Under the terms of
the indentures, the Issuer and the Trustee will treat the persons in whose names
notes, including the global notes, are registered as the owners thereof for the
purpose of receiving such payments and for any and all other purposes
whatsoever. Consequently, none of the Issuer, the initial purchasers, the
Trustee, or any agent of the Issuer, the initial purchasers or the Trustee has
or will have any responsibility or liability for (i) any aspect or accuracy of
the records of the relevant clearing system, the participants therein or the
account holders thereof, as the case may be, relating to payments made on
account of beneficial ownership interests in the global notes, or for
maintaining, supervising or reviewing any records of such clearing system,
participant or account holder relating to beneficial ownership interests in the
global notes, or (ii) any other matter relating to the actions and practices of
the relevant clearing system or the participants therein or the account holders
thereof.
DTC or Euroclear, as the case may be, upon receipt of any such payment, will
immediately credit the accounts of their relevant participants or account
holders, as the case may be, with payments in amounts proportionate to their
respective holdings in principal amount of beneficial interests in the relevant
global note, as shown on the records of DTC or Euroclear, as the case may be.
The Issuer expects that payments by such participants or account holders, as the
case may be, to the beneficial owners of global notes will be governed by
standing instructions and customary practices and will be the responsibility of
such participants or account holders. Neither the Issuer nor the Trustee will
have responsibility or liability for the payment of amounts owing in respect of
beneficial interests in the global notes held by DTC or by the Depositary for
Euroclear.
TRANSFERS OF GLOBAL SECURITIES AND INTERESTS THEREIN
Unless definitive securities are issued, (i) the dollar global notes and the
Rule 144A euro notes may be transferred, in whole and not in part, only to
another nominee of DTC or to a successor of DTC or its nominee, and (ii) the
Reg. S euro global notes may be transferred, in whole and not in part, only by
Euroclear to the Depositary or by the Depositary to Euroclear, or to another
nominee or successor thereof or a nominee of such successor.
Transfers of beneficial interests in the dollar global notes and the Rule
144A euro notes will be subject to the applicable rules and procedures of DTC
and its direct and indirect participants (including, if applicable, those of
Euroclear and Cedelbank), which are subject to change from time to time.
Transfers of beneficial interests in the Reg. S euro global note will be subject
to the applicable rules and procedures of Euroclear and its account holders and
intermediaries. Any secondary market trading activity in beneficial interests in
the global notes is expected to occur through the participants or account
holders and intermediaries, as the case may be, of DTC, Euroclear and Cedelbank,
and the securities custody accounts of investors will be credited with their
holdings against payment in same-day funds on the settlement date.
No service charge will be made for any registration of transfer or exchange
of notes, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Although DTC, Euroclear and Cedelbank have agreed to certain procedures to
facilitate transfers of interests in the global notes among participants in DTC
and account holders in Euroclear and
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Cedelbank, they are under no obligation to perform or to continue to perform
such procedures, and such procedures may be discontinued at any time. None of
the Issuer, the initial purchasers, the Trustee, nor any agent of the Issuer,
the initial purchasers or the Trustee will have any responsibility for the
nonperformance or misperformance (as a result of insolvency, mistake, misconduct
or otherwise) by DTC, Euroclear or Cedelbank or their respective participants,
indirect participants, account holders or intermediaries of their respective
obligations under the rules and procedures governing their operations.
The Issuer understands that under existing industry practices, if either the
Issuer or the Trustee requests any action of holders of notes, or if an owner of
a beneficial interest in a global note desires to give instructions or take an
action that a holder is entitled to give or take under the indentures, DTC,
Euroclear or Cedelbank, as the case may be, would authorize their respective
participants or account holders, as the case may be, owning the relevant
beneficial interest to give instructions to take such action, and such
participants or account holders would authorize indirect participants or
intermediaries to give instructions or take such action, or would otherwise act
upon the instructions of such indirect participants or intermediaries.
The Issuer understands that under existing practices of DTC or Euroclear if
less than all of the respective class of notes are to be redeemed at any time,
DTC or Euroclear, as the case may be, will credit their participants' or account
holders' accounts on a proportionate basis (with adjustments to prevent
fractions) or by lot or on such other basis as DTC or Euroclear, as the case may
be, deems fair and appropriate, provided that no beneficial interests of less
than $1,000 or [EURO]1,000, as the case may be, may be redeemed in part.
CERTIFICATED NOTES
Beneficial interests in a global note are exchangeable for definitive notes
in registered certificated form only if: (i) in the case of the dollar global
notes, DTC (x) notifies the Issuer that it is unwilling or unable to continue as
depositary for such on the Rule 144A euro notes global notes or (y) has ceased
to be a "clearing agency" registered under the Exchange Act and, in each case,
the Issuer thereupon fails to appoint a successor depositary within 90 days;
(ii) in the case of the Reg. S euro global note, Euroclear is unwilling or
unable to continue as depositary for such global note and the Issuer thereupon
fails to appoint a successor depositary within 90 days; or (iii) there shall
have occurred and be continuing a Default or an Event of Default with respect to
the applicable notes. In all cases, certificated notes delivered in exchange for
any global note or beneficial interest therein will be registered in the names,
and issued in any approved denominations, requested by or on behalf of DTC or
Euroclear, as the case may be, in accordance with their customary procedures.
The notes may not be issued in bearer form.
In the case of the issuance of certificated notes in the limited
circumstances set forth above, the holder of any such certificated note may
transfer such note by surrendering it at the offices or agencies of the Issuer
maintained for such purpose within the City and State of New York, and at the
office of the transfer agent in Luxembourg. Until otherwise designated by the
Issuer, the Issuer's office or agency in the City and State of New York and
London, England, respectively, will be the offices of the Trustee maintained for
such purpose. In the event of a partial transfer of a holding of notes
represented by one certificate, or partial redemption of such a holding
represented by one certificate, a new certificate shall be issued to the
transferee in respect of the part transferred or redeemed and a further new
certificate in respect of the balance of the holding not transferred or redeemed
shall be issued to the transferor, provided that no certificate in denominations
less than $1,000 or [EURO]1,000 as the case may be, shall be issued. Each new
certificate to be issued shall be available for delivery within ten business
days at the office of the Trustee or the transfer agent in Luxembourg. The cost
of preparing, printing, packaging and delivering the certificated notes shall be
borne by the Issuer.
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The Issuer shall not be required to register the transfer or exchange of
certificated notes for a period of 15 days preceding (a) the due date for any
payment of principal of or interest on the notes or (b) a selection of notes to
be redeemed. Also, the Issuer is not required to register the transfer or
exchange of any notes selected for redemption. In the event of the transfer of
any certificated note, the Trustee may require a holder, among other things, to
furnish appropriate endorsements and transfer documents, and the Issuer may
require a holder to pay any taxes and fees required by law and permitted by the
indentures and the notes.
If certificated notes are issued and a holder of a certificated note claims
that the note has been lost, destroyed or wrongfully taken or if such note is
mutilated and is surrendered to the Trustee, the Issuer shall issue and the
Trustee shall authenticate a replacement note if the Trustee's and the Issuer's
requirements are met. If required by the Trustee or the Issuer, an indemnity
bond sufficient in the judgment of both to protect the Issuer, the Trustee or
any paying agent or authenticating agent appointed pursuant to the indentures
from any loss which any of them may suffer if a note is replaced must be posted.
The Issuer may charge for its expenses in replacing a note.
In case any such mutilated, destroyed, lost or stolen note has become or is
about to become due and payable, or is about to be redeemed or purchased by the
Issuer pursuant to the provisions of the indentures, the Issuer in its
discretion may, instead of issuing a new note, pay, redeem or purchase such
note, as the case may be.
REGISTRATION RIGHTS; LIQUIDATED DAMAGES
The following description is a summary of the material provisions of the
registration rights agreements. It does not restate those agreements in their
entirety. We urge you to read the registration rights agreements in their
entirety because they, and not this description, define your registration rights
as holders of these notes. See "Where You Can Find More Information."
The Issuer, the Guarantors and the Initial Purchasers entered into the
registration rights agreement pertaining to the dollar notes and another
registration rights agreement pertaining to the euro notes. Pursuant to each
registration rights agreement, the Issuer and the Guarantors agreed to file with
the SEC a registration statement on the appropriate form under the Securities
Act with respect to the exchange notes (the "Exchange Offer Registration
Statement"). Upon the effectiveness of the Exchange Offer Registration
Statement, the Issuer and the Guarantors will offer to the holders of transfer
restricted securities pursuant to the exchange offer who are able to make
certain representations the opportunity to exchange their transfer restricted
securities for exchange notes which will have terms substantially identical in
all material respects to the dollar notes or the euro notes, as the case may be.
If:
(1) the Issuer and the Guarantors are not
(a) required to file the Exchange Offer Registration Statement; or
(b) permitted to consummate the exchange offer because the exchange offer is
not permitted by applicable law or SEC policy; or
(2) any holder of transfer restricted securities notifies the Issuer in writing
prior to the 20th business day following consummation of the exchange offer
that:
(a) it is prohibited by law or SEC policy from participating in the exchange
offer; or
(b) that it may not resell the exchange notes acquired by it in the exchange
offer to the public without delivering a prospectus and the prospectus
contained in the Exchange Offer Registration Statement is not appropriate
or available for such resales; or
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(c) that it is a broker-dealer and owns notes acquired directly from the
Issuer or an affiliate of the Issuer,
the Issuer and the Guarantors will file with the SEC a shelf registration
statement to cover resales of the notes by the holders thereof who satisfy
certain conditions relating to the provision of information in connection with
the shelf registration statement.
The Issuer and the Guarantors will use their reasonable best efforts to
cause the applicable registration statement to be declared effective as promptly
as possible by the SEC.
For purposes of the preceding, "transfer restricted securities" means each
note until:
(1) the date on which such note has been exchanged by a Person other than a
broker-dealer for an exchange note in the exchange offer;
(2) following the exchange by a broker-dealer in the exchange offer of a note
for an exchange note, the date on which such exchange note is sold to a
purchaser who receives from such broker-dealer on or prior to the date of
such sale a copy of the prospectus contained in the Exchange Offer
Registration Statement;
(3) the date on which such note has been effectively registered under the
Securities Act and disposed of in accordance with the shelf registration
statement; or
(4) the date on which such note is eligible for distribution to the public
pursuant to Rule 144 under the Securities Act.
The registration rights agreement also provide that:
(1) the Issuer and the Guarantors will use their reasonable best efforts to file
an Exchange Offer Registration Statement with the SEC on or prior to 60 days
after the closing of the initial offering;
(2) the Issuer and the Guarantors will use their reasonable best efforts to have
the Exchange Offer Registration Statement declared effective by the SEC on
or prior to 150 days after the issue date of the notes;
(3) unless the exchange offer would not be permitted by applicable law or SEC
policy, the Issuer and the Guarantors will
(a) commence the exchange offer; and
(b) use their reasonable best efforts to issue on or prior to 30 business
days, or longer, if required by the federal securities laws, after the
date on which the Exchange Offer Registration Statement was declared
effective by the SEC, exchange notes in exchange for all notes tendered
prior thereto in the exchange offer; and
(4) if obligated to file the shelf registration statement, the Issuer and the
Guarantors shall use their reasonable best efforts to file the shelf
registration statement with the SEC on or prior to 30 days after such filing
obligation arises and to cause the shelf registration statement to be
declared effective by the SEC on or prior to 90 days after such filing is
made (but in no event earlier that the Issuer's obligation with respect to
the Exchange Offer Registration Statement).
If:
(1) the Issuer and the Guarantors fail to file any of the registration
statements required by the registration rights agreement on or before the
date specified for such filing; or
(2) any of such registration statements is not declared effective by the SEC on
or prior to the date specified for such effectiveness (the "Effectiveness
Target Date"); or
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(3) the Issuer and the Guarantors fail to consummate the exchange offer within
30 business days of the Effectiveness Target Date with respect to the
Exchange Offer Registration Statement; or
(4) the shelf registration statement or the Exchange Offer Registration
Statement is declared effective but thereafter ceases to be effective or
usable in connection with resales of transfer restricted securities during
the periods specified in the registration rights agreement (each such event
referred to in clauses (1) through (4) above, a "Registration Default"),
then the Issuer and the Guarantors will pay Liquidated Damages to each
holder of notes, with respect to the first 90-day period immediately following
the occurrence of the first Registration Default in an amount equal to .50% per
annum over the stated rate for the notes.
The amount of the Liquidated Damages will increase by an additional .50%
over the stated rate for the notes per annum at the beginning of each subsequent
90-day period until all Registration Defaults have been cured, up to a maximum
amount of Liquidated Damages for all Registration Defaults of 1.0% per annum
over the stated rate for the notes.
All accrued Liquidated Damages will be paid by the Issuer and the Guarantors
on each Damages Payment Date to the global note holder by wire transfer of
immediately available funds or by federal funds check and to holders of
certificated notes by wire transfer to the accounts specified by them or by
mailing checks to their registered addresses if no such accounts have been
specified.
Following the cure of all Registration Defaults, the accrual of Liquidated
Damages will cease.
Holders of notes will be required to make certain representations to the
Issuer (as described in the registration rights agreements) in order to
participate in the exchange offer and will be required to deliver certain
information to be used in connection with the shelf registration statement and
to provide comments on the shelf registration statement within the time periods
set forth in the registration rights agreements in order to have their notes
included in the shelf registration statement and benefit from the provisions
regarding Liquidated Damages set forth above. By acquiring transfer restricted
securities, a holder will be deemed to have agreed to indemnify the Issuer and
the Guarantors against certain losses arising out of information furnished by
such holder in writing for inclusion in any shelf registration statement.
Holders of notes will also be required to suspend their use of the prospectus
included in the shelf registration statement under certain circumstances upon
receipt of written notice to that effect from the Issuer.
While the Issuer intends to apply to list the notes on the Luxembourg Stock
Exchange, there can be no assurance that the listing will be obtained or that it
will be obtained on terms that are acceptable to the Issuer in its sole
discretion. The Issuer intends to comply with the rules and regulations of the
Luxembourg Stock Exchange in connection therewith. For so long as the notes are
listed on the Luxembourg Stock Exchange and the rules of such exchange so
require, the Luxembourg Stock Exchange will be notified in the case of any
increase in the rate of interest on the notes, and such notice will be published
in a daily newspaper of general circulation in Luxembourg (which is expected to
the LUXEMBURGER WORT).
CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the indentures. Reference
is made to the indentures for a full disclosure of all such terms, as well as
any other capitalized terms used herein for which no definition is provided.
"ACQUIRED DEBT" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, whether
or not such Indebtedness is incurred in
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connection with, or in contemplation of, such other Person merging with or
into, or becoming a Subsidiary of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by such
specified Person.
"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 purposes of this definition, "control,"
as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; PROVIDED that beneficial ownership of 10% or more of the
Voting Stock of a Person shall be deemed to be control. For purposes of this
definition, the terms "controlling," "controlled by" and "under common control
with" shall have correlative meanings.
"ASSET SALE" means:
(1) the sale, lease, conveyance or other disposition of any assets or rights,
other than sales or leases in the ordinary course of business consistent
with past practices; PROVIDED that the sale, conveyance or other disposition
of all or substantially all of the assets of the Issuer and its Subsidiaries
taken as a whole will be governed by the provisions of the Indenture
described above under the caption "--Repurchase at the Option of
Holders--Change of Control" and/or the provisions described above under the
caption "--Certain Covenants--Merger, Consolidation or Sale of Assets" and
not by the provisions of the Asset Sale covenant; and
(2) the issuance of Equity Interests by any of the Issuer's Restricted
Subsidiaries or the sale of Equity Interests in any of its Subsidiaries.
Notwithstanding the preceding, the following items shall not be deemed to be
Asset Sales:
(1) any single transaction or series of related transactions that involves
assets having a fair market value of less than $5.0 million;
(2) a transfer of assets between or among the Issuer and its Restricted
Subsidiaries;
(3) an issuance of Equity Interests by a Restricted Subsidiary to the Issuer or
to another Restricted Subsidiary;
(4) the sale, lease or license of property, plant, equipment, inventory,
accounts receivable or other assets in the ordinary course of business;
(5) the sale or other disposition of cash or Cash Equivalents;
(6) a Restricted Payment or Permitted Investment that is permitted by the
covenant described above under the caption "--Certain Covenants--Restricted
Payments;"
(7) the licensing of intellectual property; and
(8) sales of receivables and related assets (including contract rights) of the
type specified in the definition of "Qualified Securitization Transaction"
to a Securitization Entity for the fair market value thereof, including
consideration in the amount specified in the proviso to the definition of
Qualified Securitization Transaction.
"BENEFICIAL OWNER" has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" shall be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the
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occurrence of a subsequent condition. The terms "Beneficially Owns" and
"Beneficially Owned" shall have a corresponding meaning.
"BOARD OF DIRECTORS" means:
(1) with respect to a corporation, the board of directors of the corporation;
(2) with respect to a partnership, the Board of Directors of the general partner
of the partnership; and
(3) with respect to any other Person, the board or committee of such Person
serving a similar function.
"CAPITAL LEASE OBLIGATION" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at that time be required to be capitalized on a balance sheet in accordance with
GAAP.
"CAPITAL STOCK" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated)
of corporate stock;
(3) in the case of a partnership or limited liability company, partnership or
membership interests (whether general or limited); and
(4) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of,
the issuing Person.
"CASH EQUIVALENTS" means:
(1) United States dollars;
(2) securities issued or directly and fully guaranteed or insured by the United
States government or any agency or instrumentality thereof (PROVIDED that
the full faith and credit of the United States is pledged in support
thereof) having maturities of not more than twelve months from the date of
acquisition;
(3) certificates of deposit and eurodollar time deposits with maturities of
twelve months or less from the date of acquisition, bankers' acceptances
with maturities not exceeding six months and overnight bank deposits, in
each case, with any lender party to the Credit Agreement or with any
domestic commercial bank having capital and surplus in excess of $500.0
million and a Thompson Bank Watch Rating of "B" or better;
(4) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (2) and (3) above
entered into with any financial institution meeting the qualifications
specified in clause (3) above;
(5) commercial paper having the highest rating obtainable from Moody's Investors
Service, Inc. or Standard & Poor's Rating Service and in each case maturing
within twelve months after the date of acquisition;
(6) money market funds at least 95% of the assets of which constitute Cash
Equivalents of the kinds described in clauses (1) through (5) of this
definition; and
(7) Indebtedness with a rating of "A" or higher from Standard & Poor's Rating
Service or "A-2" or higher from Moody's Investors Service, Inc.
"CHANGE OF CONTROL" means the occurrence of any of the following:
(1) the direct or indirect sale, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of
related transactions, of all or substantially all of the
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properties or assets of the Issuer and its Restricted Subsidiaries taken as
a whole to any "person" (as that term is used in Section 13(d)(3) of the
Exchange Act) other than a Principal or a Related Party of a Principal;
(2) the adoption of a plan relating to the liquidation or dissolution of the
Issuer;
(3) the consummation of any transaction (including, without limitation, any
merger or consolidation) the result of which is that any "person" (as
defined above), other than the Principals and their Related Parties, becomes
the Beneficial Owner, directly or indirectly, of more than 50% of the Voting
Stock of the Issuer, measured by voting power rather than number of shares;
(4) the first day on which a majority of the members of the Board of Directors
of the Issuer are not Continuing Directors;
(5) the first day on which DASI ceases to own 100% of the outstanding Equity
Interests of the Issuer; or
(6) the Issuer consolidates with, or merges with or into, any Person, or any
Person consolidates with, or merges with or into, the Issuer, in any such
event pursuant to a transaction in which any of the outstanding Voting Stock
of the Issuer or such other Person is converted into or exchanged for cash,
securities or other property, other than any such transaction where the
Voting Stock of the Issuer outstanding immediately prior to such transaction
is converted into or exchanged for Voting Stock (other than Disqualified
Stock) of the surviving or transferee Person constituting a majority of the
outstanding shares of such Voting Stock of such surviving or transferee
Person (immediately after giving effect to such issuance).
"CONSOLIDATED CASH FLOW" means, with respect to any specified Person for any
period, the Consolidated Net Income of such Person for such period PLUS:
(1) an amount equal to any extraordinary loss plus any net loss realized by such
Person or any of its Subsidiaries in connection with an Asset Sale, to the
extent such losses were deducted in computing such Consolidated Net Income;
PLUS
(2) provision for taxes based on income or profits of such Person and its
Subsidiaries for such period, to the extent that such provision for taxes
was deducted in computing such Consolidated Net Income; PLUS
(3) consolidated interest expense of such Person and its Subsidiaries for such
period, whether paid or accrued and whether or not capitalized (including,
without limitation, amortization of debt issuance costs and original issue
discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with
Capital Lease Obligations, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance financings,
and net of the effect of all payments made or received pursuant to Hedging
Obligations), to the extent that any such expense was deducted in computing
such Consolidated Net Income; PLUS
(4) depreciation, amortization (including amortization of goodwill and other
intangibles but excluding amortization of prepaid cash expenses that were
paid in a prior period) and other non-cash expenses (excluding any such
non-cash expense to the extent that it represents an accrual of or reserve
for cash expenses in any future period or amortization of a prepaid cash
expense that was paid in a prior period) of such Person and its Subsidiaries
for such period to the extent that such depreciation, amortization and other
non-cash expenses were deducted in computing such Consolidated Net Income;
MINUS
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(5) non-cash items increasing such Consolidated Net Income for such period,
other than the accrual of revenue in the ordinary course of business, in
each case, on a consolidated basis and determined in accordance with GAAP.
Notwithstanding the preceding, the provision for taxes based on the income
or profits of, and the depreciation and amortization and other non-cash expenses
of, a Subsidiary of the Issuer shall be added to Consolidated Net Income to
compute Consolidated Cash Flow of the Issuer only to the extent that a
corresponding amount would be permitted at the date of determination to be
dividended to the Issuer by such Subsidiary without prior governmental approval
(that has not been obtained), and without direct or indirect restriction
pursuant to the terms of its charter and all agreements, instruments, judgments,
decrees, orders, statutes, rules and governmental regulations applicable to that
Subsidiary or its stockholders.
"CONSOLIDATED NET INCOME" means, with respect to any specified Person for
any period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; PROVIDED that:
(1) the Net Income (but not loss) of any Person that is not a Restricted
Subsidiary or that is accounted for by the equity method of accounting shall
be included only to the extent of the amount of dividends or distributions
paid in cash to the specified Person or a Wholly Owned Restricted Subsidiary
thereof;
(2) the Net Income of any Restricted Subsidiary shall be excluded to the extent
that the declaration or payment of dividends or similar distributions by
that Restricted Subsidiary of that Net Income is not at the date of
determination permitted without any prior governmental approval (that has
not been obtained) or, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute,
rule or governmental regulation applicable to that Restricted Subsidiary or
its stockholders;
(3) the Net Income of any Person acquired in a pooling of interests transaction
for any period prior to the date of such acquisition shall be excluded;
(4) the cumulative effect of a change in accounting principles shall be
excluded; and
(5) the Net Income (but not loss) of any Unrestricted Subsidiary shall be
excluded, whether or not distributed to the Specified Person or one of its
Subsidiaries.
"CONTINUING DIRECTORS" means, as of any date of determination, any member of
the Board of Directors of the Issuer who:
(1) was a member of such Board of Directors on the dates of the Indentures; or
(2) was nominated for election or elected to such Board of Directors with the
approval of a majority of the Continuing Directors who were members of such
Board at the time of such nomination or election.
"CREDIT AGREEMENT" means that certain Amended and Restated Credit Agreement,
dated as of March 19, 1999, by and among the Issuer, DASI and various direct and
indirect wholly owned Subsidiaries of DASI and Bank of America National Trust
and Savings Association as a lender and as agent, and certain other lenders,
providing for up to $1,150 million of aggregate borrowings, including any
related notes, guarantees, collateral documents, instruments and agreements
executed in connection therewith, and in each case as amended, modified,
renewed, refunded, replaced or refinanced from time to time.
"CREDIT FACILITIES" means, one or more debt facilities (including, without
limitation, the Credit Agreement) or commercial paper facilities, in each case
with banks or other institutional lenders providing for revolving credit loans,
term loans, receivables financing (including through the sale of
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receivables to such lenders or to special purpose entities formed to borrow from
such lenders against such receivables) or letters of credit, in each case, as
amended, restated, modified, renewed, refunded, replaced or refinanced in whole
or in part from time to time.
"DEFAULT" means any event that is, or with the passage of time or the giving
of notice or both would be, an Event of Default.
"DESIGNATED NONCASH CONSIDERATION" means any non-cash consideration (other
than non-cash consideration that would constitute a Restricted Investment)
received by the Issuer or one of its Restricted Subsidiaries in connection with
an Asset Disposition that is so designated as Designated Noncash Consideration
pursuant to an Officers' Certificate executed by the principal executive officer
and the principal financial officer of the Issuer or such Restricted Subsidiary.
Such Officers' Certificate shall state the basis of such valuation, which shall
be a report of a nationally recognized investment banking firm with respect to
the receipt in one or a series of related transactions of Designated Noncash
Consideration with a fair market value in excess of $5.0 million.
"DESIGNATED PREFERRED STOCK" means preferred stock that is so designated as
Designated Preferred Stock, pursuant to an Officers' Certificate executed by the
principal executive officer and the principal financial officer of the Issuer,
on the issuance date thereof, the cash proceeds of which are excluded from the
calculation set forth in clause 3(b) of the first paragraph of the covenant
described under the caption "--Restricted Payments."
"DISQUALIFIED STOCK" means 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, in each case at the option of the holder thereof), 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, on or prior to the date that is 91 days after the
date on which the Notes mature. Notwithstanding the preceding sentence, any
Capital Stock that would constitute Disqualified Stock solely because the
holders thereof have the right to require the Issuer to repurchase such Capital
Stock upon the occurrence of a change of control or an asset sale shall not
constitute Disqualified Stock if the terms of such Capital Stock provide that
the Issuer may not repurchase or redeem any such Capital Stock pursuant to such
provisions unless such repurchase or redemption complies with the covenant
described above under the caption "--Certain Covenants--Restricted Payments."
"DOMESTIC RESTRICTED SUBSIDIARY" means any Restricted Subsidiary that was
formed under the laws of the United States or any state thereof or the District
of Columbia.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"EQUITY OFFERING" means an offering by the Issuer or DASI of shares of its
Common Stock (however designated and whether voting or non-voting) and any and
all rights, warrants or options to acquire such Common Stock; PROVIDED that, in
the event of any Equity Offering by DASI, DASI contributes to the common equity
capital of the Company (other than as Disqualified Stock) the net cash proceeds
of such Equity Offering.
"EXISTING INDEBTEDNESS" means the aggregate principal amount of Indebtedness
of the Issuer and its Subsidiaries (other than Indebtedness under the Credit
Agreement) in existence on the date of the Indenture, until such amounts are
repaid.
"FIXED CHARGES" means, with respect to any specified Person for any period,
the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued, including, without
limitation, original issue discount, non-cash interest payments, the
interest component of any deferred payment obligations, the interest
component of
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all payments associated with Capital Lease Obligations, commissions,
discounts and other fees and charges incurred in respect of letter of credit
or bankers' acceptance financings, and net of the effect of all payments
made or received pursuant to Hedging Obligations; PLUS
(2) the consolidated interest of such Person and its Restricted Subsidiaries
that was capitalized during such period; PLUS
(3) any interest expense on Indebtedness of another Person that is guaranteed by
such Person or any one of its Restricted Subsidiaries or secured by a Lien
on assets of such Person or any one of its Restricted Subsidiaries, whether
or not such guaranty or Lien is called upon; PLUS
(4) the product of (a) all dividends, whether paid or accrued and whether or not
in cash, on any series of preferred stock of such Person or any of its
Restricted Subsidiaries, other than dividends on Equity Interests payable
solely in Equity Interests of the Issuer (other than Disqualified Stock) or
to the Issuer or a Restricted Subsidiary of the Issuer, times (b) a
fraction, the numerator of which is one and the denominator of which is one
minus the then current combined federal, state and local statutory tax rate
of such Person, expressed as a decimal, in each case, on a consolidated
basis and in accordance with GAAP.
"FIXED CHARGE COVERAGE RATIO" means with respect to any specified Person and
its Restricted Subsidiaries for any period, the ratio of the Consolidated Cash
Flow of such Person for such period to the Fixed Charges of such Person for such
period. In the event that the specified Person or any of its Restricted
Subsidiaries incurs, assumes, guarantees, repays, repurchases or redeems any
Indebtedness (other than ordinary working capital borrowings) or issues,
repurchases or redeems preferred stock subsequent to the commencement of the
period for which the Fixed Charge Coverage Ratio is being calculated and on or
prior to the date on which the event for which the calculation of the Fixed
Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge
Coverage Ratio shall be calculated giving pro forma effect to such incurrence,
assumption, guarantee, repayment, repurchase or redemption of Indebtedness, or
such issuance, repurchase or redemption of preferred stock, and the use of the
proceeds therefrom as if the same had occurred at the beginning of the
applicable four-quarter reference period.
In addition, for purposes of calculating the Fixed Charge Coverage Ratio:
(1) acquisitions that have been made by the specified Person or any of its
Restricted Subsidiaries, including through mergers or consolidations and
including any related financing transactions, during the four-quarter
reference period or subsequent to such reference period and on or prior to
the Calculation Date shall be given pro forma effect as if they had occurred
on the first day of the four-quarter reference period and Consolidated Cash
Flow for such reference period shall be calculated on a pro forma basis in
accordance with Regulation S-X under the Securities Act (giving effect to
any Pro Forma Cost Savings), but without giving effect to clause (3) of the
proviso set forth in the definition of Consolidated Net Income;
(2) the Consolidated Cash Flow attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses disposed of
prior to the Calculation Date, shall be excluded; and
(3) the Fixed Charges attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses disposed of prior to the
Calculation Date, shall be excluded, but only to the extent that the
obligations giving rise to such Fixed Charges will not be obligations of the
specified Person or any of its Restricted Subsidiaries following the
Calculation Date.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in
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such other statements by such other entity as have been approved by a
significant segment of the accounting profession, which are in effect as of the
dates of the Indentures.
"GUARANTY" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"GUARANTORS" means each of:
(1) DASI; Dura Automotive Systems, Inc. Column Shifter Operations; Universal
Tool & Stamping Company Inc.; Dura Automotive Systems Cable Operations,
Inc.; Adwest Electronics, Inc.; Adwest Western Automotive, Inc.; X.E. Co.;
Dura Automotive Systems of Tennessee, L.P.; Dura Automotive Systems of
Indiana, Inc.; Dura Industries of Michigan, Inc.; Anderson Industries, Inc.;
Hydro Flame Corporation; Atwood Industries, Inc.; Atwood Automotive Inc.;
Mark I Molded Plastics, Inc.; and Mark I Molded Plastics of Tennessee, Inc.;
and
(2) any other subsidiary that executes a Guaranty in accordance with the
provisions of the Indenture;
and their respective successors and assigns.
"HEDGING OBLIGATIONS" means, with respect to any specified Person, the
obligations of such Person under:
(1) interest rate swap agreements, interest rate cap agreements and interest
rate collar agreements; and
(2) other agreements or arrangements designed to protect such Person against
fluctuations in interest rates and currency values.
"INDEBTEDNESS" means, with respect to any specified Person, any indebtedness
of such Person, whether or not contingent, in respect of:
(1) borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof);
(3) banker's acceptances;
(4) representing Capital Lease Obligations;
(5) the balance deferred and unpaid of the purchase price of any property,
except any such balance that constitutes an accrued expense or trade
payable; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of
credit and Hedging Obligations) would appear as a liability upon a balance sheet
of the specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the guarantee
by the specified Person of any indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date shall be:
(1) the accreted value thereof, in the case of any Indebtedness issued with
original issue discount; and
(2) the principal amount thereof, together with any interest thereon that is
more than 30 days past due, in the case of any other Indebtedness.
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"INVESTMENTS" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including guaranties or other obligations), advances or capital
contributions (excluding commissions, travel and similar advances to officers
and employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the Issuer
or any Restricted Subsidiary of the Issuer sells or otherwise disposes of any
Equity Interests of any direct or indirect Restricted Subsidiary of the Issuer
such that, after giving effect to any such sale or disposition, such Person is
no longer a Restricted Subsidiary of the Issuer, the Issuer shall be deemed to
have made an Investment on the date of any such sale or disposition equal to the
fair market value of the Equity Interests of such Restricted Subsidiary not sold
or disposed of in an amount determined as provided in the final paragraph of the
covenant described above under the caption "--Certain Covenants-- Restricted
Payments." The acquisition by the Issuer or any Restricted Subsidiary of the
Issuer of a Person that holds an Investment in a third Person shall be deemed to
be an Investment by the Issuer or such Restricted Subsidiary in such third
Person in an amount equal to the fair market value of the Investment held by the
acquired Person in such third Person in an amount determined as provided in the
final paragraph of the covenant described above under the caption "--Certain
Covenants-- Restricted Payments."
"LIEN" means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset, whether
or not filed, recorded or otherwise perfected under applicable law, including
any conditional sale or other title retention agreement, any lease in the nature
thereof, any option or other agreement to sell or give a security interest in
and any filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction.
"LIQUIDATED DAMAGES" means all liquidated damages owing pursuant to the
registration rights agreements entered into on April 22, 1999 between the Issuer
and the Initial Purchasers.
"NET INCOME" means, with respect to any specified Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however:
(1) any gain or loss, together with any related provision for taxes on such gain
or loss, realized in connection with: (a) any Asset Sale; or (b) the
disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any
of its Restricted Subsidiaries; and
(2) any extraordinary gain or loss, together with any related provision for
taxes on such extraordinary gain or loss.
"NET PROCEEDS" means the aggregate cash proceeds received by the Issuer or
any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale, including, without limitation, legal, accounting
and investment banking fees, and sales commissions, and any relocation expenses
incurred as a result thereof, taxes paid or payable as a result thereof, in each
case, after taking into account any available tax credits or deductions and any
tax sharing arrangements, and amounts required to be applied to the repayment of
Indebtedness, other than under the Credit Agreement, secured by a Lien on the
asset or assets that were the subject of such Asset Sale and any reserve for
adjustment in respect of the sale price of such asset or assets established in
accordance with GAAP.
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"NON-RECOURSE DEBT" means Indebtedness:
(1) as to which neither the Issuer nor any of its Restricted Subsidiaries (a)
provides credit support of any kind (including any undertaking, agreement or
instrument that would constitute Indebtedness), (b) is directly or
indirectly liable as a guarantor or otherwise, or (c) constitutes the
lender;
(2) no default with respect to which (including any rights that the holders
thereof may have to take enforcement action against an Unrestricted
Subsidiary) would permit upon notice, lapse of time or both any holder of
any other Indebtedness of the Issuer or any of its Restricted Subsidiaries
to declare a default on such other Indebtedness or cause the payment thereof
to be accelerated or payable prior to its stated maturity; and
(3) as to which the lenders have been notified in writing that they will not
have any recourse to the stock or assets of the Issuer or any of its
Restricted Subsidiaries.
"OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"PERMITTED BUSINESS" means the business conducted by the Issuer and its
Restricted Subsidiaries on the date hereof and businesses reasonably related
thereto.
"PERMITTED INVESTMENTS" means:
(1) any Investment in the Issuer or in a Restricted Subsidiary;
(2) any Investment in Cash Equivalents;
(3) any Investment by the Issuer or any Restricted Subsidiary of the Issuer in
a Person, if as a result of such Investment:
(a) such Person becomes a Restricted Subsidiary of the Issuer; or
(b) such Person is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all of its assets to, or is liquidated
into, the Issuer or a Restricted Subsidiary of the Issuer;
(4) any Investment made as a result of the receipt of non-cash consideration
from an Asset Sale that was made pursuant to and in compliance with the
covenant described above under the caption "--Repurchase at the Option of
Holders--Asset Sales";
(5) any acquisition of assets solely in exchange for the issuance of Equity
Interests (other than Disqualified Stock) of the Issuer or DASI;
(6) Hedging Obligations;
(7) other Investments in any Person having an aggregate fair market value
(measured on the date each such Investment was made and without giving
effect to subsequent changes in value), when taken together with all other
Investments made pursuant to this clause (7) that are at the time
outstanding not to exceed the greater of (x) $50.0 million and (y) 5.0% of
Total Assets;
(8) Investments existing on the date of the Indenture and any amendment,
modification, restatement, supplement, extension, renewal, refunding,
replacement, refinancing, in whole or in part, thereof;
(9) any Investment by the Issuer or a Subsidiary of the Issuer in a
Securitization Entity or any Investment by a Securitization Entity in any
other Person in connection with a Qualified Securitization Transaction;
PROVIDED that any Investment in a Securitization Entity is in the form of a
Purchase Money Note or any equity interest;
(10) Investments in Permitted Joint Ventures of up to $25.0 million outstanding
at any one time;
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(11) Investments in Unrestricted Subsidiaries an amount at any one time
outstanding not to exceed $10.0 million; and
(12) Investments in securities of trade creditors or customers received
pursuant to a plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of such trade creditors or customers.
"PERMITTED JOINT VENTURE" means an entity characterized as a joint venture
(however structured) engaged in a Permitted Business and in which the Issuer or
a Restricted Subsidiary (a) owns at least 20% of the ownership interest or (b)
has the right to receive at least 20% of the profits or distributions; provided
that such joint venture is not a Subsidiary.
"PERMITTED LIENS" means:
(1) Liens of the Issuer and any Guarantor securing Indebtedness and other
Obligations under Credit Facilities that were securing Senior Debt that was
permitted by the terms of the Indenture to be incurred;
(2) Liens in favor of the Issuer or the Guarantors;
(3) Liens on property of a Person existing at the time such Person is merged
with or into or consolidated with the Issuer or any Subsidiary of the
Issuer; PROVIDED that such Liens were in existence prior to the
contemplation of such merger or consolidation and do not extend to any
assets other than those of the Person merged into or consolidated with the
Issuer or the Subsidiary;
(4) Liens on property existing at the time of acquisition thereof by the Issuer
or any Subsidiary of the Issuer, PROVIDED that such Liens were in existence
prior to the contemplation of such acquisition;
(5) Liens to secure the performance of statutory obligations, surety or appeal
bonds, performance bonds or other obligations of a like nature incurred in
the ordinary course of business;
(6) Liens to secure Indebtedness (including Capital Lease Obligations)
permitted by clause (4) of the second paragraph of the covenant entitled
"--Certain Covenants--Incurrence of Indebtedness and Issuance of Preferred
Stock" covering only the assets acquired with such Indebtedness;
(7) Liens existing on the date of the Indentures;
(8) Liens for taxes, assessments or governmental charges or claims that are not
yet delinquent or that are being contested in good faith by appropriate
proceedings promptly instituted and diligently concluded, PROVIDED that any
reserve or other appropriate provision as shall be required in conformity
with GAAP shall have been made therefor;
(9) Liens incurred in the ordinary course of business of the Issuer or any
Subsidiary of the Issuer with respect to obligations that do not exceed
$5.0 million at any one time outstanding;
(10) Liens on assets of Unrestricted Subsidiaries that secure Non-Recourse Debt
of Unrestricted Subsidiaries;
(11) Liens on assets of a Restricted Subsidiary that is not a Guarantor that
secures Indebtedness (including Acquired Indebtedness) incurred in
compliance with the covenant described under "--Limitation on Foreign
Indebtedness."
(12) judgment Liens not giving rise to an Event of Default;
(13) Liens encumbering deposits made to secure obligations arising from
statutory, regulatory, contractual, or warranty requirements of the Issuer
or any of its Restricted Subsidiaries, including rights of offset and
set-off;
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(14) Liens in favor of customs and revenue authorities arising as a matter of
law to secure payment of customer duties in connection with the
importation of goods;
(15) Liens on assets transferred to a Securitization Entity or on assets of a
Securitization Entity, in either case incurred in connection with a
Qualified Securitization Transaction;
(16) leases or subleases granted to others that do not materially interfere
with the ordinary course of business of the Issuer and its Restricted
Subsidiaries;
(17) Liens incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other
types of social security, including any Lien securing letters of credit
issued in the ordinary course of business consistent with past practice in
connection therewith, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money).
(18) Liens imposed by law, such as carriers', warehouseman's and mechanics'
Liens in each case for sums not yet due or being contested in good faith;
(19) Liens securing Indebtedness or other obligations of a Restricted
Subsidiary owing to the Issuer or any Guarantor to the extent such
Indebtedness is permitted to be incurred in accordance with the covenant
described under "--Incurrence of Indebtedness and Issuance of Preferred
Stock";
(20) Liens securing Hedging Obligations as long as the related Indebtedness is,
and is permitted to be, under the Indentures to be secured by a Lien on
the same property securing the Hedging Obligations;
(21) Liens on specific items of inventory or other goods and proceeds of any
Person securing such Person's obligations with respect to bankers'
acceptances issued or created for the account of such Person to facilitate
the purchase, shipment or storage of such inventory or other goods; and
(22) Liens arising from Uniform Commercial Code financing statement filings
regarding operating leases entered into by the Issuer and its Restricted
Subsidiaries in the ordinary course of business.
"PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness of the Issuer or
any of its Restricted Subsidiaries issued in exchange for, or the net proceeds
of which are used to extend, refinance, renew, replace, defease or refund other
Indebtedness of the Issuer or any of its Restricted Subsidiaries (other than
intercompany Indebtedness); PROVIDED that:
(1) the principal amount (or accreted value, if applicable) of such Permitted
Refinancing Indebtedness does not exceed the principal amount (or accreted
value, if applicable) of the Indebtedness so extended, refinanced, renewed,
replaced, defeased or refunded (plus all accrued interest thereon and the
amount of all expenses and premiums incurred in connection therewith);
(2) such Permitted Refinancing Indebtedness has a final maturity date later than
the final maturity date of, and has a Weighted Average Life to Maturity
equal to or greater than the Weighted Average Life to Maturity of, the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded;
(3) if the Indebtedness being extended, refinanced, renewed, replaced, defeased
or refunded is subordinated in right of payment to the Notes, such Permitted
Refinancing Indebtedness has a final maturity date later than the final
maturity date of, and is subordinated in right of payment to, the Notes on
terms at least as favorable to the Holders of Notes as those contained in
the documentation governing the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded; and
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(4) such Indebtedness is incurred either by the Issuer or by the Restricted
Subsidiary who is the obligor on the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"PRINCIPALS" means Onex DHC LLC, Alkin Co. and J2R Corporation.
"PRO FORMA COST SAVINGS" means, with respect to any period, the reduction in
costs that occurred during the four-quarter period or after the end of the
four-quarter period and on or prior to the Transaction Date that were directly
attributable to an asset acquisition and calculated on a basis that is
consistent with Article 11 of Regulation S-X under the Securities Act as in
effect on the date of the Indenture.
"PRODUCTIVE ASSETS" means assets that are used or useful in, or Capital
Stock of any person engaged in, a Permitted Business.
"QUALIFIED SECURITIZATION TRANSACTION" means any transaction or series of
transactions pursuant to which the Issuer or any of its Restricted Subsidiaries
may sell, convey or otherwise transfer to (a) a Securitization Entity (in the
case of a transfer by the Issuer or any of its Restricted Subsidiaries) and (b)
any other Person (in case of a transfer by a Securitization Entity), or may
grant a security interest in, any accounts receivable or equipment (whether now
existing or arising or acquired in the future) of the Issuer or any of its
Restricted Subsidiaries, and any assets related thereto including, without
limitation, all collateral securing such accounts receivable and equipment and
other assets (including contract rights and all guarantees or other obligations
in respect to such accounts receivable and equipment, proceeds of such accounts
receivable and equipment and other assets (including contract rights) which are
customarily transferred or in respect of which security interests are
customarily granted in connection with asset securitization transactions
involving accounts receivable and equipment, all of the foregoing for the
purpose of providing working capital financing on terms that are more favorable
to the Issuer and its Restricted Subsidiary than would otherwise be available at
that time.
"RELATED PARTY" means:
(1) any controlling stockholder, 80% (or more) owned Subsidiary, or immediate
family member (in the case of an individual) of any Principal; or
(2) any trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners, owners or Persons beneficially holding an 80% or
more controlling interest of which consist of any one or more Principals
and/or such other Persons referred to in the immediately preceding clause
(1).
"RESTRICTED INVESTMENT" means an Investment other than a Permitted
Investment.
"RESTRICTED SUBSIDIARY" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"SECURITIZATION ENTITY" means a Wholly Owned Subsidiary of the Issuer (or
another Person in which the Issuer or any Subsidiary of the Issuer makes an
Investment and to which the Issuer or any Subsidiary of the Issuer transfers
accounts receivable or equipment and related assets) that engages in no
activities other than in connection with the financing of accounts receivable or
equipment and that is designated by the Board of Directors of the Issuer (as
provided below) as a Securitization Entity (a) no portion of the Indebtedness or
any other obligations (contingent or otherwise) of which (i) is guaranteed by
the Issuer or any other Restricted Subsidiary (excluding guarantees of
Obligations (other than the principal of, and interest on, Indebtedness))
pursuant to Standard Securitization Undertakings, (ii) is recourse to or
obligates the Issuer or any Restricted Subsidiary in any way other than pursuant
to Standard Securitization Undertakings, (b) with which neither the Issuer nor
any Restricted Subsidiary
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has any material contract, agreement, arrangement or understanding other than on
terms no less favorable to the Issuer or such Restricted Subsidiary than those
that might be obtained at the time from Persons that are not Affiliates of the
Issuer, other than fees payable in the ordinary course of business in connection
with servicing receivables of such entity, and (c) to which neither the Issuer
nor any Restricted Subsidiary has any obligation to maintain or preserve such
entity's financial condition or cause such entity to achieve certain levels of
operating results. Any such designation by the Board of Directors shall be
evidenced to each of the Trustees by filing with the Trustees a certified copy
of the resolution of the Board of Directors giving effect to such designation
and an Officers' Certificate certifying that such designation complied with the
foregoing conditions.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date
hereof.
"STANDARD SECURITIZATION UNDERTAKINGS" means representations, warranties,
covenants and indemnities entered into by the Issuer or any Subsidiary of the
Issuer that are reasonably customary in an accounts receivable or equipment
transactions.
"STATED MATURITY" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"SUBSIDIARY" means, with respect to any specified Person:
(1) any corporation, association or other business entity of which more than 50%
of the total voting power of shares of Capital Stock 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 such Person or one or more of the other
Subsidiaries of that Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the managing general partner
of which is such Person or a Subsidiary of such Person or (b) the only
general partners of which are such Person or one or more Subsidiaries of
such Person (or any combination thereof).
"TOTAL ASSETS" means the total assets of the Issuer and its Restricted
Subsidiaries on a consolidated basis determined in accordance with GAAP, as
shown on the most recently available consolidated balance sheet of the Issuer
and its Restricted Subsidiaries.
"TREASURY RATE" means, as of any Redemption Date, the yield to maturity as
of such Redemption Date of United States Treasury securities with a constant
maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H.15 (519) that has become publicly available at least two
Business Days prior to the Redemption Date (or, if such Statistical Release is
no longer published, any publicly available source of similar market data)) most
nearly equal to the period from the Redemption Date to May 1, 2004; PROVIDED,
HOWEVER, that if the period from the Redemption Date to May 1, 2004 is less than
one year, the weekly average yield on actually traded United States Treasury
securities adjusted to a constant maturity of one year shall be used.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary of the Issuer (other than
Dura UK Limited or any successor thereto) that is designated by the Board of
Directors as an Unrestricted Subsidiary pursuant to a Board Resolution, but only
to the extent that such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt:
(2) is not party to any agreement, contract, arrangement or understanding with
the Issuer or any Restricted Subsidiary of the Issuer unless the terms of
any such agreement, contract, arrangement
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or understanding are no less favorable to the Issuer or such Restricted
Subsidiary than those that might be obtained at the time from Persons who
are not Affiliates of the Issuer;
(3) is a Person with respect to which neither the Issuer nor any of its
Restricted Subsidiaries has any direct or indirect obligation (a) to
subscribe for additional Equity Interests or (b) to maintain or preserve
such Person's financial condition or to cause such Person to achieve any
specified levels of operating results; and
(4) has not guaranteed or otherwise directly or indirectly provided credit
support for any Indebtedness of the Issuer or any of its Restricted
Subsidiaries.
Any designation of a Subsidiary of the Issuer as an Unrestricted Subsidiary
shall be evidenced to the Trustee by filing with the Trustee a certified copy of
the Board Resolution giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the preceding
conditions and was permitted by the covenant described above under the caption
"--Certain Covenants--Restricted Payments." If, at any time, any Unrestricted
Subsidiary would fail to meet the preceding requirements as an Unrestricted
Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for
purposes of the Indentures and any Indebtedness of such Subsidiary shall be
deemed to be incurred by a Restricted Subsidiary of the Issuer as of such date
and, if such Indebtedness is not permitted to be incurred as of such date under
the covenant described under the caption "--Certain Covenants-Incurrence of
Indebtedness and Issuance of Preferred Stock," the Issuer shall be in default of
such covenant. The Board of Directors of the Issuer may at any time designate
any Unrestricted Subsidiary to be a Restricted Subsidiary; PROVIDED that such
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Issuer of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted if (1) such Indebtedness
is permitted under the covenant described under the caption "--Certain
Covenants-Incurrence of Indebtedness and Issuance of Preferred Stock,"
calculated on a pro forma basis as if such designation had occurred at the
beginning of the four-quarter reference period; and (2) no Default or Event of
Default would be in existence following such designation.
"VOTING STOCK" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the amount of each then
remaining installment, sinking fund, serial maturity or other required
payments of principal, including payment at final maturity, in respect
thereof, by (b) the number of years (calculated to the nearest one-twelfth)
that will elapse between such date and the making of such payment; by
(2) the then outstanding principal amount of such Indebtedness.
"WHOLLY OWNED RESTRICTED SUBSIDIARY" of any specified Person means a
Restricted Subsidiary of such Person all of the outstanding Capital Stock or
other ownership interests of which (other than directors' qualifying shares)
shall at the time be owned by such Person or by one or more Wholly Owned
Restricted Subsidiaries of such Person.
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CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS
The following is a discussion of certain material U.S. Federal income tax
consequences of the acquisition, ownership and disposition of the notes. Unless
otherwise stated, this discussion is limited to the tax consequences to those
persons who are original owners of the notes (those persons who purchased them
from the initial purchasers) and who hold such notes as capital assets. The
discussion does not purport to address specific tax consequences that may be
relevant to particular persons (including, for example, financial institutions,
broker-dealers, insurance companies, tax-exempt organizations, and persons in
special situations, such as those who hold notes as part of a straddle, hedge,
conversion transaction, or other integrated investment). In addition, this
discussion does not address U.S. Federal alternative minimum tax consequences or
any aspect of state, local or foreign taxation. This discussion is based upon
the Internal Revenue Code of 1986, as amended (the "Code"), the Treasury
Department regulations promulgated thereunder (the "Treasury Regulations"), and
administrative and judicial interpretations thereof, all of which are subject to
change, possibly with retroactive effect. The Issuer will treat the notes as
indebtedness for Federal income tax purposes, and the following discussion
assumes that such treatment is correct.
For purposes of this discussion, a "U.S. Holder" is a holder of a note who
is a United States citizen or resident, a corporation, partnership or other
entity created or organized in or under the laws of the United States or of any
political subdivison thereof, an estate or certain electing trusts in existence
as of August 28, 1996, the income of which is subject to U.S. Federal income
taxation regardless of its source, or a trust if a United States court is able
to exercise primary supervision over its administration and one or more United
States persons have the authority to control all of its substantial decisions. A
"Non-U.S. Holder" is a holder of a note who is not a U.S. Holder.
HOLDERS OF THE NOTES ARE URGED TO CONSULT THEIR TAX ADVISORS CONCERNING THE
UNITED STATES FEDERAL INCOME AND ESTATE TAX CONSEQUENCES TO THEM OF OWNING AND
DISPOSING OF THE NOTES, AS WELL AS THE APPLICATION OF STATE, LOCAL AND FOREIGN
INCOME AND OTHER TAX LAWS.
TAX CONSEQUENCES TO U.S. HOLDERS
TAXATION OF INTEREST
Interest on the notes generally will be taxable to a U.S. Holder as ordinary
interest income at the time such payments are accrued or are received in
accordance with the U.S. Holder's regular method of accounting for federal
income tax purposes.
Under certain circumstances described above the Issuer will be required to
pay liquidated damages on the notes if it fails to comply with its obligations
under the registration rights agreements. See "Description of
Notes--Registration Rights; Liquidated Damages." Although not free from doubt,
such liquidated damages should be taxable to a U.S. Holder as ordinary income at
the time it is accrued or received in accordance with such holder's regular
method of accounting for federal income tax purposes. It is possible, however,
that the Internal Revenue Service may take a different position, in which case,
the timing and amount of income on the notes may be different.
A U.S. Holder who uses the cash method of accounting for federal income tax
purposes and who receives interest on a euro note in Euros will be required to
include in income the U.S. dollar value of such Euros, determined using the spot
rate in effect on the date such payment is received, regardless of whether the
payment is in fact converted to U.S. dollars at that time. No exchange gain or
loss will be recognized by such holder if the Euros are converted into U.S.
dollars on the date received. The U.S. federal income tax consequences of the
conversion of Euros into U.S. dollars are described below. See "--Exchange of
Foreign Currencies."
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A U.S. Holder who uses the accrual method of accounting for federal income
tax purposes, or who is otherwise required to accrue interest prior to receipt,
will be required to include in income the U.S. dollar value of the amount of
interest income accrued with respect to a euro note in a taxable year. The U.S.
dollar value of such accrued income will be determined by translating such
income at the average rate of exchange for the relevant interest accrual period,
or with respect to an accrual period that spans two taxable years, at the
average rate for the portion of such accrual period within the taxable year. The
average rate of exchange for an interest accrual period (or portion thereof) is
the simple average of the spot rates for each business day of such period (or
such other average that is reasonably derived and consistently applied). An
accrual basis U.S. Holder may elect, however, to translate such accrued interest
income using the spot rate in effect on the last day of the accrual period or,
with respect to an accrual period that spans two taxable years, using the spot
rate in effect on the last day of the taxable year. If the last day of an
accrual period is within five business days of the receipt of the accrued
interest, a U.S. Holder may translate such interest using the spot rate in
effect on the date of receipt. The above described election must be made in a
statement filed with the U.S. Holder's U.S. tax return and will apply to all
other debt obligations held by the U.S. Holder and may not be changed without
the consent of the Internal Revenue Service. Whether or not such election is
made, a U.S. Holder may recognize exchange gain or loss (which will be treated
as ordinary income or loss) with respect to accrued interest income on the date
such interest income is received. The amount of ordinary income or loss
recognized will equal the difference, if any, between the U.S. dollar value of
the Euros received (determined using the spot rate in effect on the date such
payment is received) in respect of such accrued interest and the U.S. dollar
value of the interest income that accrued during such interest accrual period
(as determined above). No additional exchange gain or loss will be recognized by
such holder if the Euros are converted to U.S. dollars on the date received. The
U.S. federal tax consequences of the conversion of Euros into U.S. dollars are
described below. See "-- Exchange of Foreign Currencies."
EXCHANGE OF FOREIGN CURRENCIES
A U.S. Holder will have a tax basis in any Euros received as interest or on
the sale, exchange, retirement or other disposition of a note equal to their
U.S. dollar value at the time the interest is received or at the time payment is
received in consideration of the sale, exchange, retirement or other
disposition. Any gain or loss realized by a U.S. Holder on a sale or other
disposition of Euros (including their exchange for U.S. dollars or their use to
purchase notes) will be ordinary income or loss.
SALE, EXCHANGE OR RETIREMENT OF THE NOTES
Upon the sale, exchange or retirement of the notes, a U.S. Holder will
recognize gain or loss equal to the difference between the amount realized upon
the sale, exchange or retirement (less any portion allocable to accrued and
unpaid interest) and the U.S. Holder's adjusted tax basis in the notes. A U.S.
Holder's adjusted tax basis in dollar notes generally will be the U.S. Holder's
cost therefor, less any principal payments received by such Holder. If a U.S.
Holder receives foreign currency on a sale, exchange or retirement of euro
notes, the amount realized will be based on the U.S. dollar value of the foreign
currency on the date of disposition, assuming the notes are not traded on an
established securities market. A U.S. Holder's adjusted tax basis in a euro note
will equal the U.S. dollar cost of the euro note to such holder on the date of
purchase, assuming the notes are not traded on an established securities market.
If the euro notes are traded on an established securities market, a special
rule applies for the determination of the amount realized and the basis of euro
notes held by a cash basis taxpayer. Pursuant to this rule, units of foreign
currency paid or received are translated into U.S. dollars at the spot rate on
the settlement date of the purchase or sale. In that case, no exchange gain or
loss will
144
<PAGE>
result from currency fluctuations between the trade date and the settlement date
of such a purchase or sale. An accrual basis taxpayer may elect the same
treatment required of cash basis taxpayers with respect to purchases and sales
of euro notes, provided the election is applied consistently. Such election may
not be changed without the consent of the Internal Revenue Service.
Gain or loss recognized by a U.S. Holder on the sale, exchange or retirement
of the notes will be capital gain or loss (except with respect to gains or
losses attributable to fluctuations in currency exchange rates, as described
below). Such gain or loss will be long-term capital gain or loss if the notes
have been held by the U.S. Holder for more than twelve months. Long-term capital
gain is subject to a maximum federal tax rate of 20%. The deductibility of
capital losses by U.S. Holders is subject to limitation.
To the extent that the amount realized represents accrued but unpaid
interest, such amount must be taken into account as interest income, if it was
not previously included in income, and exchange gain or loss may be realized as
described above in the case of euro notes. See "--Taxation of Interest."
Gain or loss realized by a U.S. Holder upon the sale, exchange or retirement
of a euro note that is attributable to fluctuations in the rate of exchange
between the U.S. dollar and the Euro will be ordinary income or loss and
generally will not be treated as interest income or expense. Gain or loss
attributable to fluctuations in exchange rates will equal the difference between
the U.S. dollar value of the foreign currency principal amount of the euro note,
determined on the date such payment is received or the euro note is disposed of,
and the U.S. dollar value of the principal amount of the euro note, determined
on the date the U.S. Holder acquired the euro note. Such foreign currency gain
or loss will be recognized only to the extent of the total gain or loss realized
by the U.S. Holder on the sale, exchange or retirement of the note.
EXCHANGE OFFER
A U.S. Holder will not recognize any taxable gain or loss on the exchange of
the notes for exchange notes pursuant to the exchange offer, and a U.S. Holder's
tax basis and holding period in the exchange notes will be the same as in the
notes.
TAX CONSEQUENCES TO NON-U.S. HOLDERS
TAXATION OF INTEREST
A Non-U.S. Holder generally will not be subject to U.S. Federal income or
withholding tax on interest paid on the notes so long as such interest is not
effectively connected with the Non-U.S. Holder's conduct of a trade or business
within the United States, and the Non-U.S. Holder (i) does not actually or
constructively own 10% or more of the total combined voting power of all classes
of stock of Dura, (ii) is not a "controlled foreign corporation" with respect to
which Dura is a "related person" within the meaning of the Code, (iii) is not a
bank within the meaning of Section 881(c)(3)(A) of the Code, and (iv) satisfies
the requirements of Sections 871(h) or 881(c) of the Code, as set forth below
under "OWNER STATEMENT REQUIREMENT." If the foregoing conditions (i) through
(iv) are not satisfied, then interest paid on the notes will be subject to U.S.
withholding tax at a rate of 30%, unless such rate is reduced or eliminated
pursuant to an applicable tax treaty.
SALE, EXCHANGE OR RETIREMENT OF THE NOTES
Any capital gain a Non-U.S. Holder recognizes on the sale, exchange,
retirement or other taxable disposition of a note will be exempt from U.S.
Federal income and withholding tax, provided that (i) the gain is not
effectively connected with the Non-U.S. Holder's conduct of a trade or business
within the United States, and (ii) in the case of a Non-U.S. Holder that is an
individual, the Non-U.S. Holder is not present in the United States for 183 days
or more during the taxable year.
145
<PAGE>
EFFECTIVELY CONNECTED INCOME
If the interest, gain or other income a Non-U.S. Holder recognized on a note
is effectively connected with the Non-U.S. Holder's conduct of a trade or
business within the United States, the Non-U.S. Holder (although exempt from the
withholding tax previously discussed if an appropriate statement is furnished)
generally will be subject to U.S. Federal income tax on the interest, gain or
other income at regular Federal income tax rates. In addition, if the Non-U.S.
Holder is a corporation, it may be subject to a branch profits tax equal to 30%
of its effectively connected earnings and profits, as adjusted for certain
items, unless it qualifies for a lower rate under an applicable tax treaty.
FEDERAL ESTATE TAXES
A note held by an individual who at the time of death is not a citizen or
resident of the United States will not be subject to United States Federal
estate tax as a result of such individual's death, provided that the individual
does not actually or constructively own 10% or more of the total combined voting
power of all classes of stock of Dura entitled to vote and that the interest
accrued on such notes was not effectively connected with the Non-U.S. Holder's
conduct of a trade or business within the United States.
OWNER STATEMENT REQUIREMENT
Sections 871(h) and 881(c) of the Code require that either the beneficial
owner of a note or a securities clearing organization, bank or other financial
institution that holds customers' securities in the ordinary course of its trade
or business (a "Financial Institution") and that holds a note on behalf of such
owner files a statement with Dura or its agent to the effect that the beneficial
owner is not a United States person in order to avoid withholding of United
States Federal income tax. Under current regulations, this requirement will be
satisfied if Dura or its agent receives
- a statement (an "Owner Statement") from the beneficial owner of a note in
which such owner certifies, under penalties of perjury, that such owner is
not a United States person and provides such owner's name and address, or
- a statement from the Financial Institution holding the note on behalf of
the beneficial owner in which the Financial Institution certifies, under
penalties of perjury, that it has received the Owner Statement together
with a copy of the Owner Statement.
The beneficial owner must inform Dura or its agent (or, in the case of a
statement described in the second bullet point of the immediately preceding
sentence, the Financial Institution) within 30 days of any change in information
on the Owner Statement. The Internal Revenue Service has amended the transition
period relating to recently issued Treasury Regulations governing withholding.
Withholding certificates or statements that are valid on December 31, 1999, may
be treated as valid until the earlier of their expiration or December 31, 2000.
Certificates or statements received under the currently effective rules will
fail to be effective after December 31, 2000.
INFORMATION REPORTING AND BACKUP WITHHOLDING
Dura will, where required, report to the holders of notes and the Internal
Revenue Service the amount of any interest paid on the notes in each calendar
year and the amounts of tax withheld, if any, with respect to such payments. A
noncorporate U.S. Holder may be subject to information reporting and to backup
withholding at a rate of 31% with respect to payments of principal and interest
made on a note, or on proceeds of the disposition of a note before maturity,
unless such U.S. Holder provides a correct taxpayer identification number or
proof of an applicable exemption, and otherwise complies with applicable
requirements of the information reporting and backup withholding rules.
146
<PAGE>
In the case of payments of interest to Non-U.S. Holders, current Treasury
Regulations provide that the 31% backup withholding tax and certain information
reporting requirements will not apply to such payments with respect to which
either the requisite certification, as described above, has been received or an
exemption has otherwise been established, provided that neither Dura nor its
payment agent has actual knowledge that the holder is a United States person or
that the conditions of any other exemption are not in fact satisfied. Under
current Treasury Regulations, these information reporting and backup withholding
requirements will apply, however, to the gross proceeds paid to a Non-U.S.
Holder on the disposition of the notes by or through a United States office of a
United States or foreign broker, unless the Non-U.S. Holder otherwise
establishes an exemption. Information reporting requirements, but not backup
withholding, will also apply to payment of the proceeds of a disposition of the
notes by or through a foreign office of a United States broker or foreign
brokers with certain types of relationships to the United States unless such
broker has documentary evidence in its file that the holder of the notes is not
a United States person and such broker has no actual knowledge to the contrary,
or the holder establishes an exemption. Neither information reporting nor backup
withholding generally will apply to payment of the proceeds of a disposition of
the notes by or through a foreign office of a foreign broker not subject to the
preceding sentence.
The Treasury Department has released new Treasury Regulations governing the
backup withholding and information reporting requirements. The new regulations
would not generally alter the treatment of a Non-U.S. Holder who furnishes an
Owner Statement to the payor. The new regulations may change certain procedures
applicable to the foreign office of a United States broker or foreign brokers
with certain types of relationships to the United States. The new regulations
are generally effective for payments made after December 31, 1999. Non U.S.
Holders should consult their own tax advisors with respect to the impact, if
any, of the new final regulations.
Backup withholding is not an additional tax. Any amounts withheld under the
backup withholding rules may be refunded or credited against the holder's United
States Federal income tax liability, provided that the required information is
furnished to the Internal Revenue Service.
147
<PAGE>
PLAN OF DISTRIBUTION
Each participating broker-dealer that receives exchange 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 exchange notes. This
prospectus, as it may be amended or supplemented from time to time, may be used
by a participating broker-dealer in connection with resales of exchange notes
received in exchange for outstanding notes where such outstanding notes were
acquired as a result of market-making activities or other trading activities.
Dura has agreed that for a period of one year after the expiration date, we will
make this prospectus, as amended or supplemented, available to any participating
broker-dealer for use in connection with any such resale.
We will not receive any proceeds from any sales of the exchange notes by
participating broker-dealers. Exchange notes received by participating
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 exchange 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 participating broker-dealer and/or the purchasers of
any such exchange notes. Any participating broker-dealer that resells the
exchange 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 exchange notes may be deemed to be an "underwriter" within the meaning of
the Securities Act and any profit on any such resale of exchange 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 participating 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 we will promptly send
additional copies of this prospectus and any amendment or supplement to this
prospectus to any participating broker-dealer that requests such documents in
the letter of transmittal.
Prior to the exchange offer, there has not been any public market for the
outstanding notes. The outstanding notes have not been registered under the
Securities Act and will be subject to restrictions on transferability to the
extent that they are not exchanged for exchange notes by holders who are
entitled to participate in this exchange offer. The holders of outstanding notes
(other than any such holder that is an "affiliate" of Dura within the meaning of
Rule 405 under the Securities Act) who are not eligible to participate in the
exchange offer are entitled to certain registration rights, and we are required
to file a shelf registration statement with respect to such outstanding notes.
The exchange notes will constitute a new issue of securities with no established
trading market. We intend to apply to list the notes on the Luxembourg Stock
Exchange, but there can be no assurance that the listing will be obtained on
terms that are acceptable to the Issuer, in its sole discretion. Except for the
foregoing, we do not intend to list the exchange notes on any national
securities exchange or to seek the admission thereof to trading in the National
Association of Securities Dealers Automated Quotation System. In addition, any
market making activity undertaken by the initial purchasers will be subject to
the limits imposed by the Securities Act and the Exchange Act and may be limited
during the exchange offer and the pendency of the shelf registration statement.
Accordingly, no assurance can be given that an active public or other market
will develop for the exchange notes or as to the liquidity of the trading market
for the exchange notes. If a trading market does not develop or is not
maintained, holders of the exchange notes may experience difficulty in reselling
the exchange notes or may be unable to sell them at all. If a market for the
exchange notes develops, any such market may be discontinued at any time.
148
<PAGE>
LEGAL MATTERS
The validity of the exchange notes offered hereby will be passed upon on
behalf of the Issuer by Kirkland & Ellis (a partnership that includes
professional corporations), Chicago, Illinois.
EXPERTS
The consolidated financial statements of Dura as of December 31, 1997 and
1998 and for each of the three years in the period ended December 31, 1998
included in this prospectus, the consolidated financial statements of Excel as
of December 27, 1997 and January 2, 1999 and for each of the three years in the
period ended January 2, 1999 and the consolidated financial statements of
Trident as of March 31, 1998 and for the period from inception (September 19,
1997) to March 31, 1998 and FKI Automotive Group for the period from April 1,
1997 to December 12, 1997, each included in this prospectus, were audited by
Arthur Andersen LLP, independent public accountants, as set forth in its reports
thereon, included herein, and are included herein in reliance upon the authority
of said firm as an expert in auditing and accounting.
The consolidated financial statements of Adwest as of June 30, 1997 and 1998
and for each of the three years in the period ended June 30, 1998 included in
this prospectus have been audited by KPMG Audit Plc, independent certified
public accountants. Such financial statements have been included in reliance
upon the report of KPMG Audit Plc.
WHERE YOU CAN FIND MORE INFORMATION
Dura has filed a registration statement on Form S-4 regarding the exchange
offer with the SEC. This prospectus does not contain all of the information
included in the registration statement. Any statement made in this prospectus
concerning the contents of any other document is not necessarily complete. If we
have filed any other document as an exhibit to the registration statement, you
should read the exhibit for a more complete understanding of the document or
matter. Each statement regarding any other document does not necessarily contain
all of the information important to you.
Dura is subject to the information requirements of the Exchange Act (SEC
File No. 0-21139), and in accordance therewith files periodic reports, proxy
statements and other information with the SEC relating to its business,
financial statements and other matters. Prior to its acquisition by Dura, Excel
was also subject to the information requirements of the Exchange Act (SEC File
No. 1-8684). The reports, proxy statements and other information filed by Dura
and Excel may be inspected and copied at prescribed rates at the public
reference facilities maintained by the SEC at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and should be available for inspection and copying at the
regional offices of the SEC located at 7 World Trade Center, Suite 1375, New
York, New York 10048 and at Citicorp Center, 500 West Madison Street, Chicago,
Illinois 60661. Copies of such material can be obtained at prescribed rates by
writing to the SEC Public Reference Section, 450 Fifth Street, N.W., Washington,
D.C. 20549 (telephone number: 1-800-SEC-0330). The SEC also maintains a Web site
that contains reports, proxy statements and other information regarding
registrants that file electronically with the SEC. The address of such site is
http://www.sec.gov. Such material relating to Dura can also be inspected at the
reading room of the library of the National Association of Securities Dealers,
Inc., 1735 K Street, N.W., 2(nd) Floor, Washington, D.C. 20006.
149
<PAGE>
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
DURA AUTOMOTIVE SYSTEMS, INC.
Report of Independent Public Accountants............................................................... F-3
Consolidated Balance Sheets as of December 31, 1997 and 1998........................................... F-4
Consolidated Statements of Operations for the Years Ended December 31,
1996, 1997 and 1998.................................................................................. F-5
Consolidated Statements of Stockholders' Investment for the Years Ended December 31,
1996, 1997 and 1998.................................................................................. F-6
Consolidated Statements of Cash Flows for the Years Ended December 31, 1996, 1997 and 1998............. F-7
Notes to Consolidated Financial Statements............................................................. F-8
Condensed Consolidated Balance Sheets at December 31, 1998 and March 31, 1999 (unaudited).............. F-36
Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 1998 and 1999
(unaudited).......................................................................................... F-37
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 1998 and 1999
(unaudited).......................................................................................... F-38
Notes to Condensed Consolidated Financial Statements (unaudited)....................................... F-39
EXCEL INDUSTRIES, INC.
Report of Independent Public Accountants............................................................... F-50
Consolidated Balance Sheet as of December 27, 1997 and January 2, 1999................................. F-51
Consolidated Statement of Income for the Years Ended December 28, 1996,
December 27, 1997 and January 2, 1999................................................................ F-52
Consolidated Statements of Cash Flows for the Years Ended December 28, 1996, December 27, 1997 and
January 2, 1999...................................................................................... F-53
Consolidated Statements of Shareholders' Equity for the Years Ended December 28, 1996, December 27,
1997 and January 2, 1999............................................................................. F-54
Notes to Consolidated Financial Statements............................................................. F-55
ADWEST AUTOMOTIVE PLC
Independent Auditors' Report........................................................................... F-82
Consolidated Profit and Loss Account for the Years Ended June 30, 1996, 1997 and 1998.................. F-83
Consolidated Balance Sheet as of June 30, 1997 and 1998................................................ F-84
Consolidated Cash Flow Statement for the Years Ended June 30, 1996, 1997 and 1998...................... F-85
Statements of Consolidated Recognised Gains and Losses for the Years Ended June 30,
1996, 1997 and 1998.................................................................................. F-87
Reconciliation of Movements in Shareholders' Funds..................................................... F-87
Notes to the Accounts.................................................................................. F-88
Unaudited Interim Consolidated Profit and Loss Account for the Six Month Periods Ending December 31,
1997 and 1998........................................................................................ F-114
Unaudited Interim Consolidated Balance Sheet as of December 31, 1998................................... F-115
Unaudited Interim Consolidated Cash Flow Statement for the Six Month Periods Ending December 31, 1997
and 1998............................................................................................. F-116
Unaudited Interim Reconciliation of Movements in Shareholders' Funds for the Six Month Period Ending
December 31, 1997 and 1998........................................................................... F-117
Unaudited Interim Analysis of Net Debt at July 1, 1998 and December 31, 1998........................... F-118
Unaudited Interim Segmental Information for the Six Month Period Ending December 31, 1997 and 1998..... F-119
Notes to the Accounts (Unaudited)...................................................................... F-120
</TABLE>
F-1
<PAGE>
<TABLE>
<S> <C>
TRIDENT AUTOMOTIVE PLC
Report of Independent Public Accountants............................................................... F-125
Consolidated Balance Sheets as of December 31, 1998 and March 31, 1998................................. F-126
Consolidated Statements of Operations for the eight-month period ended December 31, 1998, the one-month
period ended April 30, 1998, and the period from inception (September 19, 1997) to March 31, 1998.... F-127
Consolidated Statements of Shareholders' Equity for the eight-month period ended December 31, 1998, the
one-month period ended April 30, 1998, and the period from inception (September 19, 1997) to March
31, 1998............................................................................................. F-128
Consolidated Statements of Cash Flows for the eight-month period ended December 31, 1998, the one-month
period ended April 30, 1998, and the period from inception (September 19, 1997) to March 31, 1998.... F-129
Notes to Consolidated Financial Statements............................................................. F-130
Condensed Consolidated Balance Sheets at December 31, 1998 and March 31, 1999 (unaudited).............. F-153
Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 1998 and 1999
(unaudited).......................................................................................... F-154
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 1998 and 1999
(unaudited).......................................................................................... F-155
Notes to Condensed Consolidated Financial Statements (unaudited)....................................... F-156
</TABLE>
F-2
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Dura Automotive Systems, Inc.:
We have audited the accompanying consolidated balance sheets of Dura
Automotive Systems, Inc. (a Delaware corporation) and Subsidiaries as of
December 31, 1997 and 1998 and the related consolidated statements of
operations, stockholders' investment and cash flows for each of the three years
in the period ended December 31, 1998. 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 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 audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Dura Automotive Systems,
Inc. and Subsidiaries as of December 31, 1997 and 1998, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1998 in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Minneapolis, Minnesota,
January 29, 1999
F-3
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
<S> <C> <C>
1997 1998
---------- ----------
ASSETS
Current Assets:
Cash and cash equivalents............................................................... $ 4,148 $ 20,544
Accounts receivable, net of reserve for doubtful accounts of $1,953 and $4,150.......... 79,032 158,465
Inventories............................................................................. 30,301 50,498
Other current assets.................................................................... 24,800 45,924
---------- ----------
Total current assets.................................................................. 138,281 275,431
---------- ----------
Property, Plant and Equipment:
Land and buildings...................................................................... 44,553 71,489
Machinery and equipment................................................................. 73,892 144,931
Construction in progress................................................................ 6,616 10,899
Less--accumulated depreciation.......................................................... (23,523) (38,587)
---------- ----------
Net property, plant and equipment..................................................... 101,538 188,732
---------- ----------
Goodwill, net of accumulated amortization of $5,653 and $13,926........................... 160,063 435,960
Other Assets, net of accumulated amortization of $918 and $2,419.......................... 19,382 29,260
---------- ----------
$ 419,264 $ 929,383
---------- ----------
---------- ----------
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current Liabilities:
Accounts payable........................................................................ $ 49,153 $ 99,512
Accrued liabilities..................................................................... 36,583 96,664
Current maturities of long-term debt.................................................... 2,241 15,489
---------- ----------
Total current liabilities............................................................. 87,977 211,665
---------- ----------
Long-Term Debt, net of current maturities................................................. 178,081 316,417
Other Noncurrent Liabilities.............................................................. 51,498 108,014
---------- ----------
Total liabilities..................................................................... 317,556 636,096
---------- ----------
Commitments and Contingencies (Notes 3, 9 and 10)
Mandatorily Redeemable Convertible Trust Preferred Securities............................. -- 55,250
Stockholders' Investment:
Preferred stock, par value $1; 5,000,000 shares authorized; none issued or
outstanding........................................................................... -- --
Common stock, Class A; par value $.01; 30,000,000 shares authorized; 4,161,657 and
9,029,085 shares issued and outstanding............................................... 42 90
Common stock, Class B; par value $.01; 10,000,000 shares authorized; 4,654,380 and
3,325,303 shares issued and outstanding............................................... 46 33
Additional paid-in capital.............................................................. 63,402 171,377
Retained earnings....................................................................... 41,028 67,052
Accumulated other comprehensive loss--cumulative translation adjustment................. (2,810) (515)
---------- ----------
Total stockholders' investment........................................................ 101,708 238,037
---------- ----------
$ 419,264 $ 929,383
---------- ----------
---------- ----------
</TABLE>
The accompanying notes are an integral part of these consolidated balance
sheets.
F-4
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------
<S> <C> <C> <C>
1996 1997 1998
---------- ---------- ----------
Revenues..................................................................... $ 245,329 $ 449,111 $ 739,467
Cost of sales................................................................ 207,810 375,086 608,518
---------- ---------- ----------
Gross profit............................................................... 37,519 74,025 130,949
Selling, general and administrative expenses................................. 17,157 32,815 49,825
Amortization expense......................................................... 1,036 3,600 9,868
---------- ---------- ----------
Operating income........................................................... 19,326 37,610 71,256
Interest expense, net........................................................ 2,589 9,298 20,267
---------- ---------- ----------
Income before provision for income taxes, equity in losses of affiliate and
minority interest........................................................ 16,737 28,312 50,989
Provision for income taxes................................................... 6,609 11,670 20,933
Equity in losses of affiliate................................................ -- -- 1,481
Minority interest--dividend on trust preferred securities, net............... -- -- 1,908
---------- ---------- ----------
Income before extraordinary item........................................... 10,128 16,642 26,667
Extraordinary item--loss on early extinguishment of debt, net................ -- -- 643
---------- ---------- ----------
Net income............................................................... $ 10,128 $ 16,642 $ 26,024
---------- ---------- ----------
---------- ---------- ----------
Basic earnings per share:
Income before extraordinary item........................................... $ 1.57 $ 1.89 $ 2.49
Extraordinary item......................................................... -- -- (0.06)
---------- ---------- ----------
Net income............................................................... $ 1.57 $ 1.89 $ 2.43
---------- ---------- ----------
---------- ---------- ----------
Diluted earnings per share:
Income before extraordinary item........................................... $ 1.57 $ 1.88 $ 2.42
Extraordinary item......................................................... -- -- (0.05)
---------- ---------- ----------
Net income............................................................... $ 1.57 $ 1.88 $ 2.37
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-5
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' INVESTMENT
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
COMMON STOCK
-----------------------------------------------
CLASS A CLASS B ADDITIONAL
---------------------- ----------------------- PAID-IN RETAINED
SHARES AMOUNT SHARES AMOUNT CAPITAL EARNINGS
--------- ----------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, December 31, 1995............................. -- $ -- 5,007,307 $ 50 $ 13,375 $ 14,258
Initial public offering of common stock, net......... 3,795,000 38 -- -- 49,537 --
Repurchase of common stock, net...................... -- -- (9,053) -- (19) --
Net income........................................... -- -- -- -- -- 10,128
--------- --- ---------- --- ----------- -----------
BALANCE, December 31, 1996............................. 3,795,000 38 4,998,254 50 62,893 24,386
Sale of stock under Employee Stock Discount Purchase
Plan............................................... 16,922 -- -- -- 383 --
Exercise of options.................................. 5,861 -- -- -- 85 --
Collection of common stock subscriptions receivable.. -- -- -- -- 41 --
Conversion from Class B to Class A................... 343,874 4 (343,874) (4) -- --
Net income........................................... -- -- -- -- -- 16,642
Other comprehensive income--foreign currency
translation adjustment............................. -- -- -- -- -- --
Total comprehensive income...........................
--------- --- ---------- --- ----------- -----------
BALANCE, December 31, 1997............................. 4,161,657 42 4,654,380 46 63,402 41,028
Sale of stock under Employee Stock Discount Purchase
Plan............................................... 25,651 -- -- -- 512 --
Exercise of options.................................. 5,700 -- 7,000 -- 97 --
Collection of common stock subscriptions receivable.. -- -- -- -- 45 --
Public offering of Class A common stock, net......... 3,500,000 35 -- -- 107,321 --
Conversion from Class B to Class A................... 1,336,077 13 (1,336,077) (13) -- --
Net income........................................... -- -- -- -- -- 26,024
Other comprehensive income--foreign currency
translation adjustment............................. -- -- -- -- -- --
Total comprehensive income...........................
--------- --- ---------- --- ----------- -----------
BALANCE, December 31, 1998............................. 9,029,085 $ 90 3,325,303 $ 33 $ 171,377 $ 67,052
--------- --- ---------- --- ----------- -----------
--------- --- ---------- --- ----------- -----------
<CAPTION>
ACCUMULATED
OTHER TOTAL
COMPREHENSIVE STOCKHOLDERS'
LOSS INVESTMENT
--------------- ------------
<S> <C> <C>
BALANCE, December 31, 1995............................. $ -- $ 27,683
Initial public offering of common stock, net......... -- 49,575
Repurchase of common stock, net...................... -- (19)
Net income........................................... -- 10,128
------ ------------
BALANCE, December 31, 1996............................. -- 87,367
Sale of stock under Employee Stock Discount Purchase
Plan............................................... -- 383
Exercise of options.................................. -- 85
Collection of common stock subscriptions receivable.. -- 41
Conversion from Class B to Class A................... -- --
Net income........................................... --
Other comprehensive income--foreign currency
translation adjustment............................. (2,810)
Total comprehensive income........................... 13,832
------ ------------
BALANCE, December 31, 1997............................. (2,810) 101,708
Sale of stock under Employee Stock Discount Purchase
Plan............................................... -- 512
Exercise of options.................................. -- 97
Collection of common stock subscriptions receivable.. -- 45
Public offering of Class A common stock, net......... -- 107,356
Conversion from Class B to Class A................... -- --
Net income........................................... --
Other comprehensive income--foreign currency
translation adjustment............................. 2,295
Total comprehensive income........................... 28,319
------ ------------
BALANCE, December 31, 1998............................. $ (515) $ 238,037
------ ------------
------ ------------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-6
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------
<S> <C> <C> <C>
1996 1997 1998
---------- ----------- -----------
OPERATING ACTIVITIES:
Net income................................................................ $ 10,128 $ 16,642 $ 26,024
Adjustments required to reconcile net income to net cash provided by
operating activities--
Depreciation and amortization........................................... 6,079 12,303 27,571
Deferred income tax provision........................................... 3,331 1,521 7,833
Extraordinary loss on extinguishment of debt............................ -- -- 643
Other................................................................... -- -- (315)
Equity in losses of affiliates.......................................... -- -- 1,481
Change in other operating items:
Accounts receivable................................................... (2,248) (12,841) (13,536)
Inventories........................................................... 458 2,512 (905)
Other current assets.................................................. 3,038 (7,803) (7,631)
Accounts payable and accrued liabilities.............................. (994) 3,479 8,203
Other assets and liabilities.......................................... -- (7,297) (41,681)
---------- ----------- -----------
Net cash provided by operating activities........................... 19,792 8,516 7,687
---------- ----------- -----------
INVESTING ACTIVITIES:
Capital expenditures, net................................................. (6,260) (16,242) (31,822)
Acquisitions, net......................................................... (83,850) (70,481) (135,712)
Investments in joint ventures and other................................... (4,983) (6,663) --
---------- ----------- -----------
Net cash used in investing activities............................... (95,093) (93,386) (167,534)
---------- ----------- -----------
FINANCING ACTIVITIES:
Borrowings under revolving credit facilities.............................. 145,500 267,987 417,267
Repayments of revolving credit facilities................................. (68,500) (174,869) (385,052)
Long-term borrowings...................................................... -- -- 100,265
Repayments of long-term borrowings........................................ (51,320) (6,008) (116,351)
Proceeds from stock offering, net......................................... 49,575 -- 107,848
Proceeds from issuance of preferred securities............................ -- -- 52,525
Sale (repurchase) of common stock, net.................................... (19) 510 118
---------- ----------- -----------
Net cash provided by financing activities........................... 75,236 87,620 176,620
---------- ----------- -----------
EFFECT OF EXCHANGE RATES ON CASH............................................ -- (269) (377)
---------- ----------- -----------
NET CHANGE IN CASH AND CASH EQUIVALENTS..................................... (65) 2,481 16,396
CASH AND CASH EQUIVALENTS, beginning of period.............................. 1,732 1,667 4,148
---------- ----------- -----------
CASH AND CASH EQUIVALENTS, end of period.................................... $ 1,667 $ 4,148 $ 20,544
---------- ----------- -----------
---------- ----------- -----------
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for--
Interest................................................................ $ 3,195 $ 8,715 $ 24,941
---------- ----------- -----------
---------- ----------- -----------
Income taxes............................................................ $ 2,087 $ 5,589 $ 11,446
---------- ----------- -----------
---------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-7
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND BASIS OF PRESENTATION:
Dura Automotive Systems, Inc. (the "Company") and subsidiaries designs and
manufactures engineered mechanisms for the global automotive industry. The
Company has manufacturing facilities located in Indiana, Michigan, Missouri,
Tennessee, Australia, Brazil, Canada, France, Germany, Mexico, Spain, and the
United Kingdom.
2. SIGNIFICANT ACCOUNTING POLICIES:
PRINCIPLES OF CONSOLIDATION:
The accompanying consolidated financial statements include the accounts of
the Company and its wholly-owned subsidiaries. All significant intercompany
accounts and transactions have been eliminated in consolidation.
FISCAL YEAR:
The Company reports its operating results based on a 52-/53-week fiscal
year. For presentation purposes, the Company uses December 31 as its fiscal
year-end.
CASH EQUIVALENTS:
Cash equivalents consist of money market instruments with original
maturities of three months or less and are stated at cost which approximates
fair value.
INVENTORIES:
Inventories are valued at the lower of first-in, first-out ("FIFO") cost or
market.
Inventories consisted of the following (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
<S> <C> <C>
1997 1998
--------- ---------
Raw materials........................................................... $ 15,562 $ 23,067
Work-in-process......................................................... 9,126 11,155
Finished goods.......................................................... 5,613 16,276
--------- ---------
$ 30,301 $ 50,498
--------- ---------
--------- ---------
</TABLE>
OTHER CURRENT ASSETS:
Other current assets consisted of the following (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
<S> <C> <C>
1997 1998
--------- ---------
Excess of cost over billings on uncompleted tooling projects............ $ 12,603 $ 20,640
Deferred income taxes................................................... 9,350 14,023
Prepaid expenses........................................................ 2,847 11,261
--------- ---------
$ 24,800 $ 45,924
--------- ---------
--------- ---------
</TABLE>
F-8
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2. SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
Excess of cost over billings on uncompleted tooling projects represents
costs incurred by the Company in the production of customer-owned tooling to be
used by the Company in the manufacture of its products. The Company receives a
specific purchase order for this tooling and is reimbursed by the customer
within one operating cycle. Costs are deferred until reimbursed by the customer.
Forecasted losses on incomplete projects are recognized currently.
PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment are stated at cost. For financial reporting
purposes, depreciation is provided on the straight-line method over the
following estimated useful lives:
<TABLE>
<S> <C>
20 to 30
Buildings.................................................... years
Machinery and equipment...................................... 3 to 20 years
</TABLE>
Accelerated depreciation methods are used for tax reporting purposes.
Maintenance and repairs are charged to expense as incurred. Major
betterments and improvements which extend the useful life of the item are
capitalized and depreciated. The cost and accumulated depreciation of property,
plant and equipment retired or otherwise disposed of are removed from the
related accounts, and any residual values are charged or credited to income.
GOODWILL AND OTHER ASSETS:
Goodwill represents the excess of the purchase price over the fair value of
the net assets acquired and is being amortized on a straight-line basis over 40
years. Other assets principally consist of debt financing costs which are being
amortized over the term of the applicable agreement, and the Company's net
investment in its joint ventures.
The Company periodically evaluates whether events and circumstances have
occurred which may affect the estimated useful life or the recoverability of the
remaining balance of its goodwill and other long-lived assets. If such events or
circumstances were to indicate that the carrying amount of these assets would
not be recoverable, the Company would estimate the future cash flows expected to
result from the use of the assets and their eventual disposition. If the sum of
the expected future cash flows (undiscounted and without interest charges) were
less than the carrying amount of goodwill and other long-lived assets, the
Company would recognize an impairment loss.
Certain tooling and design costs related to previously proven product
designs are reimbursed by the Company's customers as the related product is sold
through an incremental increase in each product's unit selling price. Such costs
are capitalized and amortized using the unit of production method over the
estimated life of the related tool. Amounts capitalized and included in other
assets were $4.2 million at December 31, 1997 and $5.1 million at December 31,
1998. If the Company forecasts that the amount of capitalized tooling and design
costs exceeds the amount to be realized through the sale of product, a loss is
recognized currently. Research and development and start-up costs, which are not
material, are expensed as incurred.
F-9
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2. SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
ACCRUED LIABILITIES:
Accrued liabilities consisted of the following (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
<S> <C> <C>
1997 1998
--------- ---------
Plant closure and consolidation costs................................... $ 4,210 $ 34,801
Compensation and benefits............................................... 11,284 21,557
Medical insurance....................................................... 8,036 11,057
Legal and environmental................................................. 2,265 4,752
Interest................................................................ 957 3,785
Loss contracts.......................................................... 1,951 2,721
Other................................................................... 7,880 17,991
--------- ---------
$ 36,583 $ 96,664
--------- ---------
--------- ---------
</TABLE>
OTHER NONCURRENT LIABILITIES:
Other noncurrent liabilities consisted of the following (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
<S> <C> <C>
1997 1998
--------- ----------
Plant closure and consolidation costs.................................. $ 23,724 $ 46,154
Loss contracts......................................................... 11,371 16,557
Post-retirement medical benefits....................................... 7,188 16,533
Legal and environmental................................................ 7,496 14,673
Deferred income taxes.................................................. -- 8,652
Other.................................................................. 1,719 5,445
--------- ----------
$ 51,498 $ 108,014
--------- ----------
--------- ----------
</TABLE>
REVENUE RECOGNITION AND SALES COMMITMENTS:
The Company recognizes revenue as its products are shipped to its customers.
The Company enters into agreements with its customers at the beginning of a
given vehicle's life to produce products. Once such agreements are entered into
by the Company, fulfillment of the customers' purchasing requirements is the
obligation of the Company for the entire production life of the vehicle, with
terms of up to 7 years, and the Company has no provisions to terminate such
contracts. In certain instances, the Company may be committed under existing
agreements to supply product to its customers at selling prices which are not
sufficient to cover the direct cost to produce such product. In such situations,
the Company records a liability for the estimated future amount of such losses.
Such losses are recognized at the time that the loss is probable and reasonably
estimable and is recorded at the minimum amount necessary to fulfill the
Company's obligations to its customers.
F-10
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2. SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
INCOME TAXES:
The Company accounts for income taxes following the provisions of Statement
of Financial Accounting Standards ("SFAS") No. 109, which requires recognition
of deferred tax assets and liabilities for the expected future tax consequences
of events that have been included in the financial statements or tax returns.
Under this method, deferred tax assets and liabilities are determined based on
the difference between the financial statement and tax bases of assets and
liabilities using currently enacted tax rates.
COMPREHENSIVE INCOME:
Effective January 1, 1998, the Company adopted the provisions of SFAS No.
130, "Reporting Comprehensive Income." This statement established standards for
reporting and display of comprehensive income and its components. Comprehensive
income reflects the change in equity of a business enterprise during a period
from transactions and other events and circumstances from non-owner sources. For
the Company, comprehensive income represents net income adjusted for foreign
currency translation adjustments. In accordance with SFAS No. 130, the Company
has chosen to disclose comprehensive income in the consolidated statements of
stockholders' investment. Prior years have been restated to conform to SFAS No.
130 requirements.
FAIR VALUE OF FINANCIAL INSTRUMENTS:
The carrying amount of cash and cash equivalents, accounts receivable,
accounts payable and revolving credit facilities approximates fair value because
of the short maturity of these instruments. The carrying amount of the Company's
long-term debt approximates fair value because of the variability of the
interest cost associated with these instruments. The Notes were recorded at fair
value in connection with the acquisition of Trident Automotive plc in April 1998
(see Note 5) and the Company believes there has been no material change in the
estimated fair value since such date. The fair value of the Company's Preferred
Securities (see Note 4), based on Nasdaq market quote activity as of yearend,
approximated carrying value.
SEGMENT REPORTING:
In 1998, the Company adopted SFAS No. 131, "Disclosure About Segments of an
Enterprise and Related Information." SFAS No. 131 supersedes SFAS No. 14
replacing the "industry segment" approach with the "management" approach. The
management approach designates the internal organization that is used by
management for making operating decisions and assessing performance as the
source of the Company's reportable segments. SFAS No. 131 also requires
disclosures about products and services, geographic areas, and major customers.
The adoption of SFAS No. 131 did not affect results of operations or financial
position but did affect the disclosure of segment information (see Note 8).
COMMON STOCK:
The holder of each share of Class A common stock outstanding is entitled to
one vote per share and the holder of each share of Class B common stock
outstanding is entitled to ten votes per share.
F-11
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2. SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
STOCK OPTIONS:
The Company accounts for stock options under the provisions of Accounting
Principles Board Opinion ("APB") No. 25, under which no compensation expense is
recognized when the stock options are granted. The pro forma effects had the
Company followed the provisions of SFAS No. 123 are included in Note 3.
USE OF ESTIMATES:
The preparation of consolidated 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 revenues and expenses during the
reporting period. The ultimate results could differ from those estimates.
FOREIGN CURRENCY TRANSLATION:
Assets and liabilities of the Company's foreign operations are translated
using the year-end rates of exchange. Results of operations are translated using
the average rates prevailing throughout the period. Translation gains or losses
are accumulated as a separate component of stockholders' investment.
RECLASSIFICATIONS:
Certain amounts previously reported in the 1996 and 1997 consolidated
financial statements have been reclassified to conform to the 1998 presentation.
The reclassifications had no effect on previously reported net income or
stockholders' investment.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS:
In June 1998 the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities," effective for
years beginning after June 15, 1999. SFAS No. 133 establishes accounting and
reporting standards requiring that every derivative instrument, including
certain derivative instruments embedded in other contracts, be recorded in the
balance sheet as either an asset or liability measured at its fair value. SFAS
No. 133 requires that changes in the derivative's fair value be recognized
currently in earnings unless specific hedge criteria are met. Special accounting
for qualifying hedges allow a derivative's gains or losses to offset related
results on the hedged item in the statement of operations and requires that a
company must formally document, designate and assess the effectiveness of
transactions that receive hedge accounting. The Company has not yet quantified
the impacts of adopting SFAS No. 133 and has not yet determined the timing of
adoption.
In April 1998, the Financial Accounting Standards Board issued Statement of
Position ("SOP") No. 98-5, "Reporting on the Costs of Start-Up Activities,"
effective for fiscal years beginning after December 15, 1998. SOP 98-5 requires
the expensing of start-up activities as incurred, versus capitalizing and
expensing them over a period of time. The Company is currently in the process of
assessing the impact of adopting SOP 98-5 and will adopt this new pronouncement
during 1999.
F-12
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
3. STOCKHOLDERS' INVESTMENT:
PUBLIC OFFERING OF COMMON STOCK:
On August 14, 1996, the Company completed an initial public offering of
3,795,000 shares of its Class A common stock at $14.50 per share (the "1996
Offering"). The Company received net proceeds of approximately $49.6 million
from the 1996 Offering. Net proceeds from the 1996 Offering were used to repay
certain outstanding indebtedness. Immediately prior to the completion of the
1996 Offering, the Company's board of directors and stockholders approved an
Amended and Restated Certificate of Incorporation and a recapitalization
pursuant to which the outstanding shares of the Company's Class A, B and C
common stock were exchanged for 4,998,254 shares in the aggregate of the
Company's new Class B common stock (out of a total of 10,000,000 shares of Class
B common stock authorized for issuance under the Amended and Restated
Certificate of Incorporation). Immediately after the consummation of the
recapitalization and the 1996 Offering, the Company had 8,793,254 shares of
common stock outstanding. In addition, the Company has options outstanding to
purchase 25,045 shares of Class B common stock at an exercise price of $1.45 per
share. The accompanying consolidated financial statements have been
retroactively restated to give effect to the recapitalization as if it had
occurred at the beginning of the earliest period presented.
On June 17, 1998, the Company completed a secondary offering of 3,100,000
shares of its Class A common stock at an offering price of $32.75 per share
("Offering"). Net proceeds to the Company, after underwriting discounts and
offering expenses, were approximately $95.0 million. Proceeds from the Offering
were used to retire outstanding indebtedness. Certain stockholders of the
Company converted 1,308,000 shares of Class B common stock of the Company into
Class A common stock and sold such Class A common stock concurrent with the
Offering. In addition, an employee of the Company exercised an option to acquire
5,000 shares of Class A common stock at an exercise price of $14.50 per share,
and sold such Class A shares concurrent with the Offering. On July 1, 1998, the
underwriters, pursuant to their over-allotment option, purchased an additional
400,000 Class A shares resulting in additional net proceeds of approximately
$12.4 million to the Company.
F-13
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
3. STOCKHOLDERS' INVESTMENT: (CONTINUED)
EARNINGS PER SHARE:
Basic earnings per share were computed by dividing net income by the
weighted average number of Class A and Class B common shares outstanding during
the year. Diluted earnings per share include (i) the effects of outstanding
stock options using the treasury stock method and (ii) the conversion of the
Preferred Securities from their date of issuance on March 20, 1998 as follows
(in thousands, except per share data):
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------
<S> <C> <C> <C>
1996 1997 1998
--------- --------- ---------
Net income............................................................. $ 10,128 $ 16,642 $ 26,024
Dividends on mandatorily redeemable convertible preferred securities,
net of tax........................................................... -- -- 1,908
--------- --------- ---------
Net income applicable to common stockholders........................... $ 10,128 $ 16,642 $ 27,932
--------- --------- ---------
--------- --------- ---------
Weighted average number of Class A common shares outstanding........... 1,434 3,907 6,763
Weighted average number of Class B common shares outstanding........... 5,000 4,901 3,945
--------- --------- ---------
6,434 8,808 10,708
Dilutive effect of outstanding stock options after application of the
treasury stock method................................................ 28 61 81
Dilutive effect of mandatorily redeemable convertible preferred
securities, assuming conversion...................................... -- -- 1,006
--------- --------- ---------
Diluted shares outstanding............................................. 6,462 8,869 11,795
--------- --------- ---------
--------- --------- ---------
Basic earnings per share............................................... $ 1.57 $ 1.89 $ 2.43
--------- --------- ---------
--------- --------- ---------
Diluted earnings per share............................................. $ 1.57 $ 1.88 $ 2.37
--------- --------- ---------
--------- --------- ---------
</TABLE>
STOCK OPTION PLAN:
During 1998, the board of directors approved the 1998 Stock Incentive Plan
(the "1998 Plan") subject to stockholder approval. Prior to consummation of the
1996 Offering, the board of directors and stockholders of the Company approved
the 1996 Key Employee Stock Option Plan (the "Stock Option Plan"). Certain
people who are full-time, salaried employees of the Company are eligible to
participate in the 1998 Plan and the Stock Option Plan (an "Employee
Participant"). A committee of the board of directors selects the Employee
Participants and determines the terms and conditions of the options. The 1998
Plan provides for the issuance of options at exercise prices equal to the stock
market price on the date of grant to Employee Participants covering up to
1,000,000 shares of Class A common stock of the Company plus any shares carried
over from the Stock Option Plan plus an annual
F-14
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
3. STOCKHOLDERS' INVESTMENT: (CONTINUED)
increase, as defined in the 1998 Plan, subject to certain adjustments reflecting
changes in the Company's capitalization. Information regarding the option plans
is as follows:
<TABLE>
<CAPTION>
WEIGHTED
SHARES AVERAGE
UNDER EXERCISE EXERCISE
OPTION PRICE PRICE
---------- -------------- -----------
<S> <C> <C> <C>
Outstanding, December 31, 1995.................................. -- $ -- $ --
Granted....................................................... 108,134 14.50 14.50
Granted....................................................... 76,100 20.75 20.75
Granted....................................................... 3,500 23.50 23.50
---------- -------------- -----------
Outstanding, December 31, 1996.................................. 187,734 14.50-23.50 17.20
Granted....................................................... 20,000 28.00 28.00
Granted....................................................... 80,000 24.50 24.50
Granted....................................................... 44,300 25.75 25.75
Exercised..................................................... (5,861) 14.50-20.75 14.61
Forfeited..................................................... (9,500) 20.75 20.75
---------- -------------- -----------
Outstanding, December 31, 1997.................................. 316,673 14.50-28.00 20.86
Granted....................................................... 151,100 38.63 38.63
Granted....................................................... 589,600 29.00 29.00
Exercised..................................................... (5,700) 14.50-20.75 15.27
Forfeited..................................................... (46,875) 20.75-38.63 37.40
---------- -------------- -----------
Outstanding, December 31, 1998.................................. 1,004,798 $ 14.50-38.63 $ 27.57
---------- -------------- -----------
---------- -------------- -----------
</TABLE>
Of the outstanding options at December 31, 1998, options covering 179,623
shares are currently exercisable with a weighted average exercise price of
$18.39 per share.
The weighted average fair value of options granted was $8.92 during 1996,
$14.05 during 1997, and $16.61 during 1998.
As of December 31, 1998, the outstanding stock options granted in 1997 have
a remaining contractual life of 9 years and the outstanding stock options
granted in 1998 have a remaining contractual life of 10 years.
INDEPENDENT DIRECTOR STOCK OPTION PLAN:
Prior to consummation of the 1996 Offering, the board of directors and
stockholders of the Company approved the Dura Automotive Systems, Inc.
Independent Director Stock Option Plan (the "Director Option Plan") that
provides for the issuance of options to Independent Directors, as defined, to
acquire up to 100,000 shares of the Company's Class A common stock, subject to
certain adjustments reflecting changes in the Company's capitalization. The
option exercise price must be at least 100 percent of the fair value of the
Class A common stock at the time the option is issued. Such option grants vest
six months from the date of grant. As of December 31, 1998, the Company had
granted options under the Director Option Plan to acquire 21,000 shares of the
Company's Class A common stock at an exercise price of $24.50 to $25.50 per
share. As of December 31, 1998, 12,000 of these options were exercisable.
F-15
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
3. STOCKHOLDERS' INVESTMENT: (CONTINUED)
EMPLOYEE STOCK DISCOUNT PURCHASE PLAN:
Prior to consummation of the 1996 Offering, the board of directors and
stockholders of the Company approved the Dura Automotive Systems, Inc. Employee
Stock Discount Purchase Plan (the "Employee Stock Purchase Plan") which provides
for the sale of up to 500,000 shares of the Company's Class A common stock at
discounted purchase prices, subject to certain limitations. The cost per share
under this plan is 85% of the market value of the Company's Class A common stock
at the date of purchase, as defined. Pursuant to this plan, 16,922 and 25,651
shares of Class A common stock were issued to employees during the years ended
December 31, 1997 and 1998, respectively. No shares were issued to employees
pursuant to this plan during 1996. The weighted average fair value of shares
sold in 1997 and 1998 was $22.63 and $25.94, respectively.
STOCK-BASED COMPENSATION PLANS:
As discussed above, the Company has two stock option plans, the Stock Option
Plan and the Director Option Plan, and the Employee Stock Purchase Plan. The
Company has elected to continue to account for these plans under APB No. 25,
under which no compensation cost has been recognized. Had compensation cost for
these plans been determined under SFAS No. 123, the Company's pro forma net
income and pro forma earnings per share would have been as follows (in
thousands):
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------
<S> <C> <C> <C> <C>
1996 1997 1998
--------- --------- ---------
Net income........................ As Reported--Basic $ 10,128 $ 16,642 $ 26,024
Pro Forma 10,093 16,504 25,530
As Reported--Diluted $ 10,128 $ 16,642 $ 27,932
Pro Forma 10,093 16,504 27,438
Basic earnings per share.......... As Reported $ 1.57 $ 1.89 $ 2.43
Pro Forma 1.57 1.87 2.38
Diluted earnings per share........ As Reported $ 1.57 $ 1.88 $ 2.37
Pro Forma 1.56 1.86 2.33
</TABLE>
The effect of the stock offered under the Employee Stock Purchase Plan was
not material for 1997 and 1998.
The fair value of each option grant is estimated on the date of the grant
using the Black-Scholes option pricing model with the following weighted average
assumptions: risk free interest rates of 6.1% to 6.6% in 1996, 5.7% to 6.5% in
1997 and 4.6% to 5.7% in 1998; expected life of seven years for 1996, 1997 and
1998; an average expected volatility of 50% in 1996, 39% in 1997 and 46% in
1998.
DIVIDENDS:
The Company has not declared or paid any cash dividends in the past. As
discussed in Note 6, the Company's debt agreement restricts the amount of
dividends the Company can declare or pay. As of December 31, 1998, under the
most restrictive debt covenants, the Company could not have paid any cash
dividends.
F-16
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
4. MANDATORILY REDEEMABLE CONVERTIBLE TRUST PREFERRED SECURITIES:
On March 20, 1998, Dura Automotive Systems Capital Trust (the "Issuer"), a
wholly owned statutory business trust of the Company, completed the offering of
$55.3 million of its 7 1/2% Convertible Trust Preferred Securities ("Preferred
Securities"), resulting in net proceeds to the Company of approximately $52.6
million. The Preferred Securities are redeemable, in whole or part, on or after
March 31, 2001 and all Preferred Securities must be redeemed no later than March
31, 2028. The Preferred Securities are convertible, at the option of the holder,
into Class A common stock of the Company at a rate of 0.5831 shares of Class A
common stock for each Preferred Security, which is equivalent to a conversion
price of $42 7/8 per share. The net proceeds of the offering were used to repay
outstanding indebtedness. Dividends on the Preferred Securities, net of the
related income tax benefit, are reflected as minority interest in the
accompanying consolidated statements of operations.
No separate financial statements of the Issuer have been included herein.
The Company does not consider that such financial statements would be material
to holders of Preferred Securities because (i) all of the voting securities of
the Issuer are owned, directly or indirectly, by the Company, a reporting
company under the Exchange Act, (ii) the Issuer has no independent operations
and exists for the sole purpose of issuing securities representing undivided
beneficial interests in the assets of the Issuer and investing the proceeds
thereof in 7 1/2% Convertible Subordinated Debentures due March 31, 2028 issued
by the Company, and (iii) the obligations of the Issuer under the Preferred
Securities are fully and unconditionally guaranteed by the Company.
5. ACQUISITIONS:
In August 1996, the Company formed a joint venture with Excel Industries
Inc. ("Excel") to participate equally in the acquisition of a 26% interest in
Pollone S.A. ("Pollone"), a manufacturer of automotive components and mechanical
assemblies headquartered in Brazil for $5 million in total, and has made
additional loans to Pollone of $10 million in total pursuant to notes which bear
interest at approximately 7% and mature from January 1999 through December 2001.
Certain of these notes are convertible into equity of Pollone, at the joint
venture's option. In January 1998, the joint venture exercised its option to
convert an additional $5 million of notes to common equity of Pollone,
increasing the joint venture's ownership to 51%, and as of such date, began
consolidating the results of Pollone into the results of the joint venture. The
Company accounts for its investment in the joint venture under the equity method
of accounting and recorded a charge for its share of the loss of the joint
venture's operations in 1998 of approximately $1.5 million. The joint venture
has an option to purchase an additional 19% of common equity of Pollone for
approximately $1.5 million. In addition, the joint venture partners have
guaranteed $6 million of outstanding debt of Pollone. The Company's total
investment in the joint venture of approximately $8.5 million as of December 31,
1998 is included in other assets in the accompanying consolidated balance sheet.
In January 1997, the Company acquired all of the outstanding common stock of
the VOFA Group ("VOFA") for approximately $38.0 million in cash and assumed
indebtedness. The cash portion of the purchase price was financed with
borrowings under the Company's bank credit agreement. In December 1998, the
Company made a final payment of approximately $6.0 million to the former owners
of VOFA for the achievement of certain operating targets by VOFA following the
acquisition. VOFA manufactures shifter cables, brake cables and other light duty
cables for the European automotive and industrial markets from facilities in
Dusseldorf, Gehren and Daun, Germany and Barcelona, Spain.
F-17
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
5. ACQUISITIONS: (CONTINUED)
In August 1997, the Company acquired GT Automotive Systems, Inc. ("GT
Automotive"), headquartered in Livonia, Michigan. GT Automotive has
manufacturing facilities in Livonia and Warren, Michigan and Windsor and
Brantford, Ontario, Canada, with annual revenues of approximately $70.0 million.
Initial consideration for the acquisition of GT Automotive was $45.0 million in
cash and assumed indebtedness. In 1999, the Company will make a final payment of
approximately $11.0 million for the achievement of certain operating targets by
GT Automotive following the acquisition. The acquisition was financed with
proceeds from borrowings under the Company's bank credit agreement, as amended.
In December 1997, the Company purchased approximately 19% of the outstanding
common stock of Thixotech Inc. ("Thixotech") for approximately $0.5 million. The
Company also loaned Thixotech an additional $2.8 million pursuant to notes which
are convertible into additional common stock of Thixotech at the Company's
option. Thixotech is currently pursuing the development of an alternative
manufacturing technology for component parts.
In December 1997, the Company acquired REOM Industries (Aust) Pty Ltd.
("REOM"), an Australian designer and manufacturer of jacks and parking brakes,
for approximately $3.7 million. The acquisition added market penetration in
parking brakes, added a new product (jacks) and established a presence in the
Pacific Rim.
In March 1998, the Company acquired Universal Tool & Stamping Co., Inc.
("Universal"), a manufacturer of jacks for the North American automotive
industry, for approximately $19.5 million. The acquisition provided the Company
with a market presence for jacks in North America and added Honda as a
significant new customer.
In April 1998, the Company acquired all of the outstanding equity interests
of Trident Automotive plc ("Trident"). Trident had revenues of approximately
$300.0 million in 1997, of which 69 percent was derived from sales of cable
assemblies, principally to the automotive OEM market, and the balance from door
handle assemblies, lighting and other products. Approximately 68 percent of
Trident's revenues were generated in North America, 27 percent in Europe and the
remainder in Latin America. Trident has manufacturing and technical facilities
in Michigan, Tennessee, Canada, the United Kingdom, Germany, France and Brazil.
Pursuant to the terms of the agreement, the Company acquired all of the
outstanding equity interests of Trident for total consideration of $93.2 million
in cash. In addition, the Company assumed $75.0 million of Trident's outstanding
10% Senior Subordinated Notes (the "Notes") due 2005. The Company also repaid
Trident's outstanding senior indebtedness of approximately $53.0 million. The
acquisition of Trident was financed with borrowings under a new credit facility
which is further described in Note 6.
In August 1998, the Company acquired the hinge business ("Hinge") of Tower
Automotive, Inc. for approximately $37.3 million. Hinge had annual revenues of
approximately $50.0 million and manufactures automotive hood and deck lid
hinges.
The acquisitions of the VOFA, GT Automotive, REOM, Universal, Trident, and
Hinge have been accounted for using the purchase method of accounting and,
accordingly, the assets acquired and liabilities assumed have been recorded at
their fair values as of the dates of the acquisitions. The excess of the
purchase price over the fair value of the assets acquired and liabilities
assumed has been recorded as goodwill. The assets acquired and liabilities
assumed of Universal, Trident and Hinge have been recorded based upon
preliminary estimates of fair value as of the dates of acquisition. The
F-18
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
5. ACQUISITIONS: (CONTINUED)
Company does not believe the final allocation of purchase price will be
materially different from preliminary allocations. Any changes to the
preliminary estimates will be reflected as an adjustment to goodwill. Additional
purchase liabilities recorded in conjunction with the 1998 acquisitions included
approximately $45.4 million for costs associated with the shutdown and
consolidation of certain acquired facilities and $20.6 million for associated
severance and other related costs. At December 31, 1998 liabilities for
approximately $48.6 million for costs associated with the shutdown and
consolidation of certain acquired facilities and $32.4 million in severance
costs are recorded on the consolidated balance sheet. Results of operations for
these acquisitions have been included in the accompanying consolidated financial
statements since the dates of acquisition.
The accompanying unaudited consolidated pro forma results of operations for
the years ended December 31, 1997 and 1998 give effect to (i) the acquisitions
of GT Automotive, Universal, Trident and Hinge, (ii) the Offering, and (iii) the
offering of the Preferred Securities as if such transactions had occurred at the
beginning of the period and exclude the effects of the extraordinary loss (in
thousands, except per share amounts):
<TABLE>
<CAPTION>
PRO FORMA
FOR YEARS ENDED
DECEMBER 31,
----------------------
<S> <C> <C>
1997 1998
---------- ----------
Revenues............................................................. $ 876,840 $ 886,849
Operating income..................................................... 63,811 75,830
Net income before extraordinary item................................. 21,806 26,996
Basic earnings per share............................................. $ 1.77 $ 2.19
Diluted earnings per share........................................... 1.77 2.15
</TABLE>
The unaudited pro forma consolidated financial information does not purport
to represent what the Company's financial position or results of operations
would actually have been if these transactions had occurred at such dates or to
project the Company's future results of operations.
6. DEBT:
Debt consisted of the following (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
<S> <C> <C>
1997 1998
---------- ----------
Bank Credit Agreement:
Term loans............................................................ $ -- $ 90,077
Revolving credit facilities........................................... -- 153,433
Trident 10% senior subordinated notes................................. -- 81,150
Revolving credit facility, due August 2002, interest at 3.94% to 8.50%
at December 31, 1997................................................ 165,158 --
Other................................................................. 15,164 7,246
---------- ----------
180,322 331,906
Less--Current maturities.............................................. (2,241) (15,489)
---------- ----------
$ 178,081 $ 316,417
---------- ----------
---------- ----------
</TABLE>
F-19
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
6. DEBT: (CONTINUED)
Future maturities of long-term debt as of December 31, 1998 are as follows
(in thousands):
<TABLE>
<S> <C>
1999.............................................................. $ 15,489
2000.............................................................. 16,324
2001.............................................................. 23,647
2002.............................................................. 26,289
2003.............................................................. 154,729
Thereafter........................................................ 95,428
---------
$ 331,906
---------
---------
</TABLE>
On April 30, 1998 in connection with the acquisition of Trident, the Company
entered into a new $402.5 million credit agreement ("Credit Agreement"). The
Credit Agreement provided for revolving credit facilities of $225.0 million,
term loans of $100.0 million, an acquisition facility of $30.0 million and a
twelve month interim loan of $47.5 million. Proceeds from the Offering were
partially used to retire the interim loan and $3.6 million of the term loans.
The Credit Agreement has a term of five years and borrowings bear interest at
the lenders reference rate or the Eurocurrency rate. The interest rate on
borrowings outstanding under the Credit Agreement ranged from 3.9% to 7.9% as of
December 31, 1998. The Credit Agreement contains various restrictive covenants
which limit indebtedness, investments, rental obligations and cash dividends.
The Credit Agreement also requires the Company to maintain certain financial
ratios including minimum liquidity and interest coverage. The Company was in
compliance with the covenants as of December 31, 1998. Borrowings under the
Credit Agreement are collateralized by the assets of the Company. In addition,
the Company has outstanding letters of credit in the amount of approximately
$1.9 million expiring through July 2000.
The Credit Agreement provides the Company with the ability to denominate a
portion of its revolving credit borrowings in foreign currencies up to an amount
equal to $100.0 million. As of December 31, 1998, $121.0 million of borrowings
were denominated in U.S. dollars, $7.1 million of borrowings were denominated in
Canadian dollars, $2.8 million of borrowings were denominated in Australian
dollars, $13.1 million of borrowings were denominated in Deutsche Marks, $4.7
million of borrowings were denominated in French francs, and $4.7 million in
British pound sterling.
The Notes, with a face value of $75 million, were issued by Trident on
December 12, 1997 and are due in December 2005. Interest is payable semiannually
on June 15 and December 15 of each year. The Notes are guaranteed by certain
subsidiaries of Trident. Each Guarantor is a direct or indirect wholly-owned
subsidiary of Trident and has fully and unconditionally guaranteed the Notes on
a joint and several basis. In connection with the acquisition of Trident, the
Notes were recorded at their fair value of $81.2 million. The premium in excess
of face value will be amortized over the life of the Notes using the effective
interest method. The Notes contain various restrictive covenants which the
Company was in compliance with as of December 31, 1998.
In connection with the termination of the Company's former credit facility,
the Company wrote-off deferred financing costs of approximately $643,000, net of
income taxes, in 1998. This charge is reflected as an extraordinary item in the
accompanying consolidated statement of operations.
F-20
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
7. INCOME TAXES:
The provision for income taxes consisted of the following (in thousands):
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------
<S> <C> <C> <C>
1996 1997 1998
--------- --------- ---------
Current....................................................... $ 3,278 $ 10,149 $ 13,100
Deferred...................................................... 3,331 1,521 7,833
--------- --------- ---------
Total....................................................... $ 6,609 $ 11,670 $ 20,933
--------- --------- ---------
--------- --------- ---------
</TABLE>
A reconciliation of the provision for income taxes at the statutory rates to
the reported income tax provision is as follows (in thousands):
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------
<S> <C> <C> <C>
1996 1997 1998
--------- --------- ---------
Federal provision at statutory rates.......................... $ 5,858 $ 9,909 $ 17,846
State taxes, net of federal benefit........................... 652 990 900
Foreign provision in excess of U.S. tax rate.................. -- 444 1,830
Amortization of non-deductible goodwill....................... 224 440 943
Foreign sales corporation benefit............................. (192) (260) (570)
Other, net.................................................... 67 147 (16)
--------- --------- ---------
Total....................................................... $ 6,609 $ 11,670 $ 20,933
--------- --------- ---------
--------- --------- ---------
</TABLE>
A summary of deferred tax assets (liabilities) is as follows (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
<S> <C> <C>
1997 1998
--------- ---------
Depreciation and property basis differences.............................. $ (4,100) $ (6,001)
Net operating loss carryforwards......................................... 1,475 5,620
Accrued compensation costs............................................... 1,230 3,077
Accrued plant closure and consolidation costs............................ 5,560 1,818
Tooling and design costs................................................. (1,480) (1,802)
Post-retirement benefit obligations...................................... 1,280 1,282
Inventory valuation adjustments.......................................... 1,330 1,025
Accrued legal and insurance costs........................................ 6,150 597
Other reserves and accruals not deductible for tax purposes.............. 568 1,671
Valuation allowance...................................................... (1,475) (1,916)
--------- ---------
$ 10,538 $ 5,371
--------- ---------
--------- ---------
</TABLE>
The valuation allowance was established for net operating losses acquired or
incurred in connection principally with foreign subsidiaries where realization
is not assured.
8. GEOGRAPHIC AND PRODUCT LINE INFORMATION:
In 1998, the Company adopted SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information." The Company manufactures engineered
mechanisms for the global automotive
F-21
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
8. GEOGRAPHIC AND PRODUCT LINE INFORMATION: (CONTINUED)
industry and operates in a single reportable business segment, automotive
products. The Company internally evaluates its business principally by product
category; however, because of the similar economic characteristics of the
operations, including the nature of products, production processes and
customers, those operations have been aggregated following the provisions of
SFAS No. 131 for segment reporting purposes.
The following is a summary of revenues and long-lived assets by geographic
location (in thousands):
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------------------
<S> <C> <C> <C> <C>
1997 1998
----------------------- -----------------------
<CAPTION>
LONG-LIVED LONG-LIVED
REVENUES ASSETS REVENUES ASSETS
---------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
North America............................... $ 356,249 $ 68,257 $ 570,464 $ 126,368
Europe...................................... 87,800 32,131 149,914 57,803
Other foreign countries..................... 5,062 1,150 19,089 4,561
---------- ----------- ---------- -----------
$ 449,111 $ 101,538 $ 739,467 $ 188,732
---------- ----------- ---------- -----------
---------- ----------- ---------- -----------
</TABLE>
Revenues are attributed to geographic locations based on the location of
product production.
The following is a summary of the approximate composition by product
category of the Company's revenues:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER
31,
----------------------
<S> <C> <C>
1997 1998
---------- ----------
Parking brake mechanisms........................................... $ 124,683 $ 134,856
Automotive cables.................................................. 170,988 282,616
Transmission shifter mechanisms.................................... 70,191 124,004
Other products..................................................... 83,249 197,991
---------- ----------
Revenues from external customers................................... $ 449,111 $ 739,467
---------- ----------
---------- ----------
</TABLE>
The Company sells its products directly to automobile manufacturers.
Customers that accounted for a significant portion of consolidated revenues for
each of the three years in the period ended December 31, 1998 were as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------
<S> <C> <C> <C>
1996 1997 1998
----- ----- -----
Ford............................................................... 49% 42% 36%
GM................................................................. 36% 25% 23%
DaimlerChrysler.................................................... 8% 7% 15%
</TABLE>
As of December 31, 1997 and 1998, receivables from these customers
represented 71 percent and 70 percent of total accounts receivable.
F-22
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
9. EMPLOYEE BENEFIT PLANS:
PENSION PLANS AND POST-RETIREMENT BENEFITS:
The Company sponsors six defined benefit pension plans which cover certain
hourly and salary employees. The Company's policy is to make annual
contributions to the plans to fund the normal cost and the unfunded frozen
initial liability over 11.5 years. In addition, the Company has various
postretirement medical benefit plans for certain employee groups and has
recorded a liability for its estimated obligation under these plans. The change
in benefit obligation and plan assets consisted of the following (in thousands):
<TABLE>
<CAPTION>
POST-RETIREMENT
BENEFITS
OTHER THAN PENSIONS
PENSION BENEFITS
DECEMBER 31, DECEMBER 31,
-------------------- --------------------
<S> <C> <C> <C> <C>
1997 1998 1997 1998
--------- --------- --------- ---------
Change in Benefit Obligation:
Benefit obligation at beginning of year............. $ 3,393 $ 4,157 $ 5,761 $ 5,755
Service cost........................................ 185 1,371 97 243
Interest cost....................................... 252 1,412 429 825
Plan participants' contributions.................... -- -- 167 131
Actuarial (gain) loss............................... 531 4,977 (92) 2,471
Acquisition of Trident.............................. -- 23,720 -- 9,394
Benefits paid....................................... (204) (195) (607) (1,134)
--------- --------- --------- ---------
Benefit obligation at end of year................... $ 4,157 $ 35,442 $ 5,755 $ 17,685
--------- --------- --------- ---------
--------- --------- --------- ---------
Change in Plan Assets:
Fair value at plan assets at beginning
of year............................................. $ 2,732 $ 3,206 $ -- $ --
Actual return on plan assets........................ 271 1,544 -- --
Acquisition of Trident.............................. -- 20,870 -- --
Employer contributions.............................. 407 1,064 459 401
Plan participants' contributions.................... -- -- 167 131
Benefits paid....................................... (204) (195) (626) (532)
--------- --------- --------- ---------
Fair value of plan assets at end of year............ $ 3,206 $ 26,489 $ -- $ --
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
F-23
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
9. EMPLOYEE BENEFIT PLANS: (CONTINUED)
All of the Company's plans have benefit obligations in excess of their
respective plan assets. The funded status of the Company's plans is as follows
(amounts in thousands):
<TABLE>
<CAPTION>
POST-RETIREMENT
BENEFITS
PENSION BENEFITS OTHER THAN PENSIONS
DECEMBER 31, DECEMBER 31,
-------------------- ---------------------
<S> <C> <C> <C> <C>
1997 1998 1997 1998
--------- --------- --------- ----------
Funded status....................................... $ (951) $ (8,953) $ (5,755) $ (17,685)
Unrecognized actuarial (gain) loss.................. 527 5,532 (1,344) 1,233
Unrecognized prior service cost..................... 347 301 (89) (81)
Adjustment to recognize minimum liability........... (874) (1,008) -- --
--------- --------- --------- ----------
Accrued benefit cost................................ $ (951) $ (4,128) $ (7,188) $ (16,533)
--------- --------- --------- ----------
--------- --------- --------- ----------
</TABLE>
The following weighted-average assumptions were used to account for the
plans:
<TABLE>
<CAPTION>
POST-RETIREMENT
BENEFITS
PENSION BENEFITS OTHER THAN PENSIONS
DECEMBER 31, DECEMBER 31,
--------------------- ---------------------
<S> <C> <C> <C> <C>
1997 1998 1997 1998
--------- ---------- ---------- ---------
Discount rate.................................... 7.50% 5.75-6.75% 7.00-7.25% 6.75%
Expected return on plan assets................... 8.00% 8.00-9.50% N/A N/A
Rate of compensation increase.................... N/A 4.00-6.00% N/A N/A
</TABLE>
For measurement purposes, a 7 percent annual rate of increase in the per
capita cost of covered health care benefits was assumed for 1998. The rate was
assumed to decrease 2 percent in 1999 to 5 percent and remain level thereafter.
The components of net periodic benefit costs are as follows (amounts in
thousands):
<TABLE>
<CAPTION>
POST-RETIREMENT BENEFITS
PENSION BENEFITS OTHER THAN PENSION
------------------------------- -------------------------------
<S> <C> <C> <C> <C> <C> <C>
YEARS ENDED DECEMBER 31, YEARS ENDED DECEMBER 31,
------------------------------- -------------------------------
<CAPTION>
1996 1997 1998 1996 1997 1998
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Service cost....................... $ 236 $ 185 $ 1,377 $ 84 $ 101 $ 246
Interest cost...................... 243 252 1,424 558 433 830
Expected return on plan assets..... (237) (232) (1,600) -- -- --
Amortization of prior service
cost............................. 26 45 46 -- (8) (8)
Recognized actuarial (gain) loss... 39 (3) 15 127 (89) (72)
--------- --------- --------- --------- --------- ---------
Net periodic benefit cost.......... $ 307 $ 247 $ 1,262 $ 769 $ 437 $ 996
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
</TABLE>
F-24
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
9. EMPLOYEE BENEFIT PLANS: (CONTINUED)
Assumed health care cost trend rates have a significant effect on the
amounts reported for the post-retirement medical benefit plans. A one
percentage-point change in assumed health care cost trend rates would have the
following effects (in thousands):
<TABLE>
<CAPTION>
1-PERCENTAGE-POINT 1-PERCENTAGE-POINT
INCREASE DECREASE
------------------- -------------------
<S> <C> <C>
Effect on total of service and interest cost
components............................................ $ 66 $ (66)
----- -----
----- -----
Effect on the post-retirement benefit obligation........ $ 735 $ (658)
----- -----
----- -----
</TABLE>
RETIREMENT SAVINGS PLANS:
The Company sponsors employee retirement savings plans which allow qualified
employees to provide for their retirement on a tax-deferred basis. In accordance
with the terms of the retirement savings plans, the Company is required to match
certain of the participants' contributions and/or provide employer contributions
based on the Company's performance and other factors. Such employer
contributions totaled $1.6 million, $2.2 million and $2.8 million during fiscal
1996, 1997 and 1998.
10. COMMITMENTS AND CONTINGENCIES:
LEASES:
The Company leases office and manufacturing space and certain equipment
under operating lease agreements which require it to pay maintenance, insurance,
taxes and other expenses in addition to annual rentals. Future annual rental
commitments at December 31, 1998 under these operating leases are as follows (in
thousands):
<TABLE>
<CAPTION>
YEAR AMOUNT
- --------------------------------------------------------------------------- ---------
<S> <C>
1999....................................................................... $ 6,741
2000....................................................................... 5,975
2001....................................................................... 5,194
2002....................................................................... 4,634
2003....................................................................... 3,952
Thereafter................................................................. 2,396
</TABLE>
LITIGATION:
The Company is from time to time subject to various legal actions and claims
incidental to its business, including those arising out of alleged defects,
product warranties, employment-related matters and environmental matters.
Litigation is subject to many uncertainties, and the outcome of individual
litigated matters is not predictable with assurance. After discussions with
counsel, it is the opinion of management that the Company has provided adequate
reserves to cover these matters and the ultimate outcome of such matters will
not have a material adverse impact on the consolidated financial position,
results of operations or cash flows of the Company.
F-25
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
11. RELATED PARTY TRANSACTIONS:
The Company paid fees to Hidden Creek Industries ("HCI"), an affiliate of
the Company, of approximately $750,000 in 1996 in connection with the
acquisitions and the 1996 Offering, $850,000 in 1997 in connection with the
acquisitions of VOFA and GT Automotive and $3.7 million in 1998 in connection
with the acquisition of Universal, Hinge and Trident, the Offering and the
Preferred Securities Offering. In addition, under the terms of a management
agreement, which was terminated in August 1996, the Company paid HCI monthly
management fees for certain administrative services. Total management fees of
approximately $881,000 for the year ended December 31, 1996 are included in
selling, general and administrative expenses in the accompanying consolidated
statements of operations. See Note 5 for discussion of acquisitions and
divestiture.
12. SUBSEQUENT EVENTS (UNAUDITED):
On March 23, 1999, the Company completed its merger with Excel Industries,
Inc. ("Excel"). In the aggregate, the stockholders of Excel received
consideration of approximately $155.5 million in cash and approximately 5.1
million shares of Dura Class A common stock. Upon completing of this
transaction, Excel became a wholly owned subsidiary of the Company.
Excel has annual revenues of approximately $1.1 billion of which 75 percent
is derived from the automotive/light truck market and the remainder from the
recreational vehicle, mass transit and heavy truck markets. Approximately 78
percent of Excel's revenues is generated in North America with the remainder in
Europe.
Excel has headquarters in Indiana and has manufacturing facilities in the
United States and Germany. Excel's products for the light vehicle segment
include plastic and metal encapsulated window assemblies, door systems, seat
systems and injection molded plastic products. In addition, Excel is a supplier
to the recreational vehicle, mass transit and heavy truck markets and its
products include appliances such as water heaters, furnaces, stoves and ranges,
mechanical components and systems, modular doors and a variety of window
assemblies. Excel's customers include Ford, DaimlerChrysler and General Motors
in the light vehicle segment and Fleetwood, Winnebago, Coachmen and Navistar in
the recreational vehicle, mass transit and heavy truck segments.
On March 15, 1999, the Company acquired through a cash tender offer
approximately 95% of the outstanding ordinary shares of Adwest Automotive plc
("Adwest"). Adwest has annual revenues of approximately $400 million and is a
supplier of driver control products primarily for European OEMs. The Company
paid approximately $320 million to acquire all of the outstanding shares of
Adwest, including the assumption of approximately $106.1 million in indebtedness
in connection with the acquisition of Adwest.
Adwest's products include driver control mechanisms such as gearshifters,
park brakes, pedal boxes and jacks, as well as engine control products, which
includes engine thermostats and fuel filler caps. Engine control products
represent approximately 20% of Adwest's total revenues. Adwest's customers
include Volkswagen, BMW, Ford, General Motors, Peugeot, and Renault. The Company
has manufacturing facilities in the United Kingdom, Germany, France, Spain and
the United States.
In connection with the acquisitions of Adwest and Excel, the Company entered
into an amended and restated $1.15 billion credit agreement ("Credit
Agreement"). The Credit Agreement provides for revolving credit facilities of
$400.0 million, a $275.0 million tranche A term loan, a $275.0 million tranche B
term loan and a $200.0 million interim term loan facility. As of March 31, 1999,
rates on
F-26
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
12. SUBSEQUENT EVENTS (UNAUDITED): (CONTINUED)
borrowings under the Credit Agreement ranged from 5.28% to 10.0%. Borrowings
under the tranche A term loan are due and payable in March 2005 and borrowings
under the tranche B term loan are due and payable in March 2006. The revolving
credit facility is available until March 2005. Borrowings under the interim loan
were due and payable in September 2000 and, as further discussed below, were
repaid in April 1999. The Credit Agreement contains various restrictive
covenants which limit indebtedness, investments, rental obligations and cash
dividends. The Credit Agreement also requires the Company to maintain certain
financial ratios including minimum liquidity and interest coverage. Borrowings
under the Credit Agreement are collateralized by the assets of the Company. In
connection with the termination of the Company's former credit facility, the
Company wrote-off deferred financing costs of approximately $2.7 million, net of
income taxes.
On April 23, 1999, the Company completed the offering of $300 million and
Euro 100 million of senior subordinated notes ("Subordinated Notes"). The
Subordinated Notes mature in May 2009 and bear interest at 9% per year, which is
payable semi-annually. Net proceeds from this offering of approximately $397.0
million were used to repay the $200.0 million interim term loan, approximately
$100.1 million to retire other indebtedness and approximately $96.9 million will
be used for general corporate purposes.
On June 24, 1999, the Company retired the Notes. The total consideration
paid was approximately $84 million in Note principal and premium and was funded
through borrowings under the Credit Agreement. The Company will record an
extraordinary loss on the early extinquishment of debt, net of income tax
benefit, of $2.7 million in the second quarter of 1999.
13. QUARTERLY FINANCIAL DATA (UNAUDITED):
The following is a condensed summary of actual quarterly results of
operations for 1997 and 1998 (in thousands, except per share amounts):
<TABLE>
<CAPTION>
BASIC DILUTED
GROSS OPERATING NET EARNINGS EARNINGS
REVENUES PROFIT INCOME INCOME PER SHARE PER SHARE
---------- ---------- ----------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
1997:
First................ $ 107,367 $ 16,582 $ 7,803 $ 3,544 $ 0.40 $ 0.40
Second............... 115,350 19,239 10,769 5,100 0.58 0.58
Third................ 101,862 15,449 6,920 2,657 0.30 0.30
Fourth............... 124,532 22,755 12,118 5,341 0.61 0.60
---------- ---------- ----------- ---------
$ 449,111 $ 74,025 $ 37,610 $ 16,642 $ 1.89 $ 1.88
---------- ---------- ----------- ---------
---------- ---------- ----------- ---------
1998:
First................ $ 125,746 $ 21,275 $ 10,864 $ 4,576 $ 0.52 $ 0.52
Second............... 187,433 32,019 17,951 5,902 0.63 0.61
Third................ 185,204 31,859 15,628 5,249 0.43 0.43
Fourth............... 241,084 45,796 26,813 10,297 0.83 0.80
---------- ---------- ----------- ---------
$ 739,467 $ 130,949 $ 71,256 $ 26,024 $ 2.43 $ 2.37
---------- ---------- ----------- ---------
---------- ---------- ----------- ---------
</TABLE>
The sum of per share amounts for the quarters does not equal the total for
the year due to the timing of the Offering and its effects on the computation of
weighted average number of shares outstanding.
F-27
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
14. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION:
The following consolidating financial information presents balance sheet,
statement of operations and cash flow information related to the Company's
businesses. Each Guarantor is a direct or indirect wholly owned subsidiary of
the Company and has fully and unconditionally guaranteed the 9% senior
subordinated notes issued by Dura Operating Corp., on a joint and several basis.
Separate financial statements and other disclosures concerning the Guarantors
have not been presented because management believes that such information is not
material.
DURA AUTOMOTIVE SYSTEMS, INC.
CONSOLIDATING STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1996
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
DURA NON-
OPERATING GUARANTOR GUARANTOR
CORP. COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
---------- ------------- ----------- --------------- ------------
<S> <C> <C> <C> <C> <C>
Revenues........................................ $ 243,757 $ -- $ 1,572 $ -- $ 245,329
Cost of sales................................... 206,414 -- 1,396 -- 207,810
---------- --- ----------- --- ------------
Gross profit.................................. 37,343 -- 176 -- 37,519
Selling, general and administrative expenses.... 17,072 -- 85 -- 17,157
Amortization expense............................ 1,007 -- 29 -- 1,036
---------- --- ----------- --- ------------
Operating income.............................. 19,264 -- 62 -- 19,326
Interest expense, net........................... 2,589 -- -- -- 2,589
---------- --- ----------- --- ------------
Income before provision for income taxes and
equity in earnings of subsidiaries.......... 16,675 -- 62 -- 16,737
Provision for income taxes...................... 6,609 -- -- -- 6,609
Equity (loss) in earnings of subsidiaries....... 62 -- -- (62) --
---------- --- ----------- --- ------------
Net income (loss)........................... $ 10,128 $ -- $ 62 $ (62) $ 10,128
---------- --- ----------- --- ------------
---------- --- ----------- --- ------------
</TABLE>
F-28
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
14. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION: (CONTINUED)
DURA AUTOMOTIVE SYSTEMS, INC.
CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 1996
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
DURA NON-
OPERATING GUARANTOR GUARANTOR
CORP. COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
----------- ------------- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss)................................ $ 10,128 $ -- $ 62 $ (62) $ 10,128
Adjustments required to reconcile net income to
net cash provided by operating activities --
Depreciation and amortization.................. 6,038 -- 41 -- 6,079
Deferred income tax provision.................. 3,331 -- -- -- 3,331
(Income)/loss from investment in
subsidiaries................................. (62) -- -- 62 --
Due (to)/from affiliates....................... (48) -- 48 -- --
Changes in other operating items............... 354 -- (100) -- 254
----------- --- ----------- ------ ------------
Net cash provided by operating activities.... 19,741 -- 51 -- 19,792
----------- --- ----------- ------ ------------
INVESTING ACTIVITIES:
Capital expenditures, net........................ (6,260) -- -- -- (6,260)
Acquisitions, net................................ (83,850) -- -- -- (83,850)
Investments in joint ventures and other.......... (4,983) -- -- -- (4,983)
----------- --- ----------- ------ ------------
Net cash used in investing activities........ (95,093) -- -- -- (95,093)
----------- --- ----------- ------ ------------
FINANCING ACTIVITIES:
Borrowings under revolving credit facilities..... 145,500 -- -- -- 145,500
Repayments of revolving credit facilities........ (68,500) -- -- -- (68,500)
Repayments of long-term borrowings............... (51,320) -- -- -- (51,320)
Proceeds from stock offering, net................ 49,575 -- -- -- 49,575
Repurchase of common stock, net.................. (19) -- -- -- (19)
----------- --- ----------- ------ ------------
Net cash provided by financing activities.... 75,236 -- -- -- 75,236
----------- --- ----------- ------ ------------
NET CHANGE IN CASH AND CASH EQUIVALENTS.......... (116) -- 51 -- (65)
CASH AND CASH EQUIVALENTS, beginning of period... 1,732 -- -- -- 1,732
----------- --- ----------- ------ ------------
CASH AND CASH EQUIVALENTS, end of period......... $ 1,616 $ -- $ 51 $ -- $ 1,667
----------- --- ----------- ------ ------------
----------- --- ----------- ------ ------------
</TABLE>
F-29
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
14. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION: (CONTINUED)
DURA AUTOMOTIVE SYSTEMS, INC.
CONSOLIDATING BALANCE SHEETS AS OF DECEMBER 31, 1997
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
DURA NON-
OPERATING GUARANTOR GUARANTOR
CORP. COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
---------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents..................... $ 1,292 $ 134 $ 2,722 $ -- $ 4,148
Accounts receivable, net...................... 57,506 6,486 15,040 -- 79,032
Inventories................................... 15,702 2,499 12,100 -- 30,301
Other current assets.......................... 23,180 1,366 254 -- 24,800
Due from affiliates........................... 4,237 5,661 294 (10,192) --
---------- ----------- ----------- ------------ ------------
Total current assets........................ 101,917 16,146 30,410 (10,192) 138,281
---------- ----------- ----------- ------------ ------------
Property, Plant & Equipment, net................ 54,851 9,197 37,490 -- 101,538
Investment in subsidiaries...................... 54,035 3,345 3,478 (57,848) 3,010
Notes Receivable from Affiliates................ 20,406 -- -- (20,406) --
Goodwill, net................................... 104,011 37,697 18,355 -- 160,063
Other Assets, net............................... 15,799 -- 573 -- 16,372
---------- ----------- ----------- ------------ ------------
$ 351,019 $ 66,385 $ 90,306 $ (88,446) $ 419,264
---------- ----------- ----------- ------------ ------------
---------- ----------- ----------- ------------ ------------
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current Liabilities:
Accounts payable.............................. $ 34,332 $ 3,778 $ 11,043 $ -- $ 49,153
Due to affiliates............................. -- 3,584 6,608 (10,192) --
Accrued liabilities........................... 25,988 1,711 8,884 -- 36,583
Current maturities of long-term debt.......... 61 -- 2,180 -- 2,241
---------- ----------- ----------- ------------ ------------
Total current liabilities................... 60,381 9,073 28,715 (10,192) 87,977
---------- ----------- ----------- ------------ ------------
Long-Term Debt, net of current maturities....... 161,859 -- 16,222 -- 178,081
Other Noncurrent Liabilities.................... 24,261 6,867 20,370 -- 51,498
Notes Payable to Affiliates..................... -- -- 20,406 (20,406) --
---------- ----------- ----------- ------------ ------------
Total liabilities........................... 246,501 15,940 85,713 (30,598) 317,556
---------- ----------- ----------- ------------ ------------
Stockholders' Investment........................ 104,518 50,445 4,593 (57,848) 101,708
---------- ----------- ----------- ------------ ------------
$ 351,019 $ 66,385 $ 90,306 $ (88,446) $ 419,264
---------- ----------- ----------- ------------ ------------
---------- ----------- ----------- ------------ ------------
</TABLE>
F-30
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
14. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION: (CONTINUED)
DURA AUTOMOTIVE SYSTEMS, INC.
CONSOLIDATING STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1997
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
DURA NON-
OPERATING GUARANTOR GUARANTOR
CORP. COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
---------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues........................................ $ 345,641 $ 15,824 $ 89,074 $ (1,428) $ 449,111
Cost of sales................................... 291,219 11,837 73,458 (1,428) 375,086
---------- ----------- ----------- ------------ ------------
Gross profit.................................. 54,422 3,987 15,616 -- 74,025
Selling, general and administrative expenses.... 25,062 1,048 6,705 -- 32,815
Amortization expense............................ 3,037 303 260 -- 3,600
---------- ----------- ----------- ------------ ------------
Operating income.............................. 26,323 2,636 8,651 -- 37,610
Interest expense, net........................... 6,479 18 2,801 -- 9,298
---------- ----------- ----------- ------------ ------------
Income before provision for income taxes,
equity in earnings (losses) of
subsidiaries................................ 19,844 2,618 5,850 -- 28,312
Provision for income taxes...................... 7,665 1,181 2,824 -- 11,670
Equity in earnings (losses) of subsidiaries..... 4,463 -- -- (4,463) --
---------- ----------- ----------- ------------ ------------
Net income (loss)............................. $ 16,642 $ 1,437 $ 3,026 $ (4,463) $ 16,642
---------- ----------- ----------- ------------ ------------
---------- ----------- ----------- ------------ ------------
</TABLE>
F-31
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
14. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION: (CONTINUED)
DURA AUTOMOTIVE SYSTEMS, INC.
CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 1997
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
DURA NON-
OPERATING GUARANTOR GUARANTOR
CORP. COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
---------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income..................................... $ 16,642 $ 1,437 $ 3,026 $ (4,463) $ 16,642
Adjustments required to reconcile net income to
net cash provided by (used for) operating
activities--
Depreciation and amortization................ 9,910 606 1,787 -- 12,303
Deferred income tax provision................ 1,521 -- -- -- 1,521
(Income)/loss from investment in
subsidiaries............................... (4,463) -- -- 4,463 --
Due (to)/from affiliates..................... (4,189) (2,077) 6,266 -- --
Changes in other operating items............. (1,791) 924 (21,083) -- (21,950)
---------- ----------- ----------- ------------ ------------
Net cash provided by (used for) operating
activities............................... 17,630 890 (10,004) -- 8,516
---------- ----------- ----------- ------------ ------------
INVESTING ACTIVITIES:
Capital expenditures, net...................... (13,952) (756) (1,534) -- (16,242)
Acquisitions, net.............................. (70,481) -- -- -- (70,481)
Investments in joint ventures and other........ (6,663) -- -- -- (6,663)
---------- ----------- ----------- ------------ ------------
Net cash used for investing activities....... (91,096) (756) (1,534) -- (93,386)
---------- ----------- ----------- ------------ ------------
FINANCING ACTIVITIES:
Borrowings under revolving credit facilities... 267,987 -- -- -- 267,987
Repayments of revolving credit facilities...... (174,869) -- -- -- (174,869)
Repayments of long-term borrowings............. (80) -- (5,928) -- (6,008)
Debt financing (to)/from affiliates (20,406) -- 20,406 -- --
Sale of common stock, net...................... 510 -- -- -- 510
---------- ----------- ----------- ------------ ------------
Net cash provided by financing activities.... 73,142 -- 14,478 -- 87,620
---------- ----------- ----------- ------------ ------------
EFFECT OF EXCHANGE RATES ON CASH................. -- -- (269) -- (269)
---------- ----------- ----------- ------------ ------------
NET CHANGE IN CASH AND CASH EQUIVALENTS.......... (324) 134 2,671 -- 2,481
CASH AND CASH EQUIVALENTS, beginning of period... 1,616 -- 51 -- 1,667
---------- ----------- ----------- ------------ ------------
CASH AND CASH EQUIVALENTS, end of period......... $ 1,292 $ 134 $ 2,722 $ -- $ 4,148
---------- ----------- ----------- ------------ ------------
---------- ----------- ----------- ------------ ------------
</TABLE>
F-32
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
14. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION: (CONTINUED)
DURA AUTOMOTIVE SYSTEMS, INC.
CONSOLIDATING BALANCE SHEETS AS OF DECEMBER 31, 1998
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
DURA NON-
OPERATING GUARANTOR GUARANTOR
CORP. COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
---------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents..................... $ 1,247 $ (557) $ 19,854 $ -- $ 20,544
Accounts receivable, net...................... 70,332 41,863 46,270 -- 158,465
Inventories................................... 19,134 10,454 20,910 -- 50,498
Other current assets.......................... 12,576 25,780 7,568 -- 45,924
Due from affiliates........................... 8,878 16,822 5,421 (31,121) --
---------- ----------- ----------- ------------ ------------
Total current assets........................ 112,167 94,362 100,023 (31,121) 275,431
---------- ----------- ----------- ------------ ------------
Property, Plant & Equipment, net................ 62,464 48,546 77,722 -- 188,732
Investment in Subsidiaries...................... 202,697 27,736 40,238 (266,747) 3,924
Notes Receivable from Affiliates................ 47,329 -- 29,911 (77,240) --
Goodwill, net................................... 107,469 150,740 177,751 -- 435,960
Other Assets, net............................... 13,564 2,102 9,670 -- 25,336
---------- ----------- ----------- ------------ ------------
$ 545,690 $ 323,486 $ 435,315 $ (375,108) $ 929,383
---------- ----------- ----------- ------------ ------------
---------- ----------- ----------- ------------ ------------
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current Liabilities:
Accounts payable.............................. $ 39,019 $ 22,638 $ 37,855 $ -- $ 99,512
Due to affiliates............................. 8,793 7,806 14,522 (31,121) --
Accrued liabilities........................... 28,167 46,131 22,366 -- 96,664
Current maturities of long-term debt.......... 7,064 16 8,409 -- 15,489
---------- ----------- ----------- ------------ ------------
Total current liabilities................... 83,043 76,591 83,152 (31,121) 211,665
---------- ----------- ----------- ------------ ------------
Long-Term Debt, net of current maturities....... 155,408 8,010 152,999 -- 316,417
Other Noncurrent Liabilities.................... 13,437 61,538 33,039 -- 108,014
Notes Payable to Affiliates..................... -- 27,668 49,572 (77,240) --
---------- ----------- ----------- ------------ ------------
Total liabilities........................... 251,888 173,807 318,762 (108,361) 636,096
---------- ----------- ----------- ------------ ------------
Mandatorily Redeemable Convertible
Trust Preferred Securities.................... 55,250 -- -- -- 55,250
Stockholders' Investment........................ 238,552 149,679 116,553 (266,747) 238,037
---------- ----------- ----------- ------------ ------------
$ 545,690 $ 323,486 $ 435,315 $ (375,108) $ 929,383
---------- ----------- ----------- ------------ ------------
---------- ----------- ----------- ------------ ------------
</TABLE>
F-33
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
14. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION: (CONTINUED)
DURA AUTOMOTIVE SYSTEMS, INC.
CONSOLIDATING STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1998
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
DURA NON-
OPERATING GUARANTOR GUARANTOR
CORP. COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
---------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues........................................ $ 356,683 $ 184,956 $ 210,449 $ (12,621) $ 739,467
Cost of sales................................... 296,863 151,546 172,730 (12,621) 608,518
---------- ----------- ----------- ------------ ------------
Gross profit.................................. 59,820 33,410 37,719 -- 130,949
Selling, general and administrative expenses.... 21,445 11,183 17,197 -- 49,825
Amortization expense............................ 3,522 2,864 3,482 -- 9,868
---------- ----------- ----------- ------------ ------------
Operating income.............................. 34,853 19,363 17,040 -- 71,256
Interest expense, net........................... 7,970 2,808 9,489 -- 20,267
---------- ----------- ----------- ------------ ------------
Income before provision for income taxes,
equity in earnings (losses) of subsidiaries
and minority interest....................... 26,883 16,555 7,551 -- 50,989
Provision for income taxes...................... 10,030 6,176 4,727 -- 20,933
Equity in earnings (losses) of subsidiaries..... 11,722 -- 4,259 (17,462) (1,481)
Minority interest--dividend on trust preferred
securities, net............................... 1,908 -- -- -- 1,908
---------- ----------- ----------- ------------ ------------
Income (loss) before extraordinary item....... 26,667 10,379 7,083 (17,462) 26,667
Extraordinary item--loss on early extinguishment
of debt, net.................................. 643 -- -- -- 643
---------- ----------- ----------- ------------ ------------
Net income (loss)........................... $ 26,024 $ 10,379 $ 7,083 $ (17,462) $ 26,024
---------- ----------- ----------- ------------ ------------
---------- ----------- ----------- ------------ ------------
</TABLE>
F-34
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
14. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION: (CONTINUED)
DURA AUTOMOTIVE SYSTEMS, INC.
CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 1998
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
DURA NON-
OPERATING GUARANTOR GUARANTOR
CORP. COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
----------- ----------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income..................................... $ 26,024 $ 10,379 $ 7,083 $ (17,462) $ 26,024
Adjustments required to reconcile net income to
net cash provided by (used for) operating
activities--
Depreciation and amortization................ 11,587 6,466 9,518 -- 27,571
Deferred income tax provision................ 7,833 -- -- -- 7,833
Extraordinary loss on extinguishment of
debt....................................... 643 -- -- -- 643
Other........................................ (315) -- -- -- (315)
(Income)/loss from investment in
subsidiaries............................... (13,203) -- (4,259) 17,462 --
Due (to)/from affiliates..................... 4,152 (6,939) 2,787 -- --
Equity in losses of affiliates............... 1,481 -- -- -- 1,481
Changes in other operating items............. (21,127) (40,084) 5,661 -- (55,550)
----------- ----------- ----------- ------------ -------------
Net cash provided by (used for) operating
activities............................... 17,075 (30,178) 20,790 -- 7,687
----------- ----------- ----------- ------------ -------------
INVESTING ACTIVITIES:
Capital expenditures, net...................... (15,742) (6,181) (9,899) -- (31,822)
Acquisitions, net.............................. (135,712) -- -- -- (135,712)
----------- ----------- ----------- ------------ -------------
Net cash used for investing activities..... (151,454) (6,181) (9,899) -- (167,534)
----------- ----------- ----------- ------------ -------------
FINANCING ACTIVITIES:
Borrowings under revolving credit facilities... 352,296 8,000 56,971 -- 417,267
Repayments of revolving credit facilities...... (350,546) -- (34,506) -- (385,052)
Long-term borrowings........................... 50,000 -- 50,265 -- 100,265
Repayments of long-term borrowings............. (50,984) -- (65,367) -- (116,351)
Debt financing (to)/from affiliates (26,923) 27,668 (745) -- --
Proceeds from stock offering, net.............. 107,848 -- -- -- 107,848
Proceeds from issuance of preferred
securities................................... 52,525 -- -- -- 52,525
Sale of common stock, net...................... 118 -- -- -- 118
----------- ----------- ----------- ------------ -------------
Net cash provided by financing
activities............................... 134,334 35,668 6,618 -- 176,620
----------- ----------- ----------- ------------ -------------
EFFECT OF EXCHANGE RATES ON CASH................. -- -- (377) -- (377)
----------- ----------- ----------- ------------ -------------
NET CHANGE IN CASH AND CASH EQUIVALENTS.......... (45) (691) 17,132 -- 16,396
CASH AND CASH EQUIVALENTS, beginning of period... 1,292 134 2,722 -- 4,148
----------- ----------- ----------- ------------ -------------
CASH AND CASH EQUIVALENTS, end of period......... $ 1,247 $ (557) $ 19,854 $ -- $ 20,544
----------- ----------- ----------- ------------ -------------
----------- ----------- ----------- ------------ -------------
</TABLE>
F-35
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31,
1998
MARCH 31, ------------
1999
------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents...................................................... $ 39,267 $ 20,544
Accounts receivable, net....................................................... 471,282 158,465
Inventories.................................................................... 150,471 50,498
Other current assets........................................................... 129,082 45,924
------------ ------------
Total current assets..................................................... 790,102 275,431
------------ ------------
Property, plant and equipment, net................................................... 523,287 188,732
Goodwill, net........................................................................ 898,342 435,960
Deferred income taxes and other assets, net.......................................... 48,836 29,260
------------ ------------
$ 2,260,567 $ 929,383
------------ ------------
------------ ------------
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current liabilities:
Current maturities of long-term debt........................................... $ 14,945 $ 15,489
Accounts payable............................................................... 283,125 99,512
Accrued liabilities............................................................ 226,142 96,664
------------ ------------
Total current liabilities................................................ 524,212 211,665
------------ ------------
Long-term debt, net of current maturities............................................ 1,057,146 316,417
Other noncurrent liabilities......................................................... 230,497 108,014
Mandatorily redeemable convertible trust preferred securities........................ 55,250 55,250
------------ ------------
Stockholders' investment:
Preferred stock................................................................ -- --
Common stock--Class A.......................................................... 140 90
Common stock--Class B.......................................................... 33 33
Additional paid-in capital..................................................... 335,884 171,377
Retained earnings.............................................................. 70,544 67,052
Accumulated other comprehensive loss--cumulative translation adjustment........ (13,139) (515)
------------ ------------
Total stockholders' investment........................................... 393,462 238,037
------------ ------------
$ 2,260,567 $ 929,383
------------ ------------
------------ ------------
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
balance sheets.
F-36
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS--UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
----------------------
1999 1998
---------- ----------
<S> <C> <C>
Revenues.................................................................................. $ 264,701 $ 125,746
Cost of sales............................................................................. 218,219 104,471
---------- ----------
Gross profit...................................................................... 46,482 21,275
Selling, general and administrative expenses.............................................. 16,897 9,160
Amortization expense...................................................................... 3,685 1,251
---------- ----------
Operating income.................................................................. 25,900 10,864
Interest expense, net..................................................................... 6,895 2,938
---------- ----------
Income before provision for income taxes, equity in losses of affiliate and
minority interests.............................................................. 19,005 7,926
Provision for income taxes................................................................ 7,711 3,274
Equity in losses of affiliate and minority interests...................................... 1,342 --
Minority interest--dividends on trust preferred securities, net........................... 611 76
---------- ----------
Income before extraordinary item and accounting change.......................... 9,341 4,576
Extraordinary item--loss on early extinguishment of debt, net............................. (2,702) --
Cumulative effect of change in accounting, net............................................ (3,147) --
---------- ----------
Net income........................................................................ $ 3,492 $ 4,576
---------- ----------
---------- ----------
Basic earnings per common share:
Income before extraordinary item and accounting change.................................. $ 0.73 $ 0.52
Extraordinary item...................................................................... (0.21) --
Cumulative effect of change in accounting............................................... (0.25) --
---------- ----------
---------- ----------
Net income........................................................................ $ 0.27 $ 0.52
---------- ----------
---------- ----------
Basic shares outstanding................................................................ 12,877 8,826
---------- ----------
---------- ----------
Diluted earnings per common share:
Income before extraordinary item and accounting change.................................. $ 0.70 $ 0.52
Extraordinary item...................................................................... (0.19) --
Cumulative effect of change in accounting............................................... (0.22) --
---------- ----------
Net income.......................................................................... $ 0.29 $ 0.52
---------- ----------
---------- ----------
Diluted shares outstanding................................................................ 14,253 9,012
---------- ----------
---------- ----------
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
statements.
F-37
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(AMOUNTS IN THOUSANDS--UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
----------------------
1999 1998
----------- ---------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income.......................................................................... $ 3,492 $ 4,576
Adjustments to reconcile net income to net cash provided by (used in) operating
activities--
Depreciation and amortization..................................................... 10,507 3,067
Deferred income taxes............................................................. (3,057) --
Equity in losses of affiliates and minority interest.............................. 1,342 --
Extraordinary loss on extinguishment of debt...................................... 2,702 --
Cumulative effect of change in accounting, net.................................... 3,147 --
Changes in other operating items.................................................. (17,746) (9,785)
----------- ---------
Net cash provided by (used in) operating activities............................... 387 (2,142)
----------- ---------
INVESTING ACTIVITIES:
Acquisitions, net of cash acquired.................................................. (540,133) (18,578)
Capital expenditures, net........................................................... (5,994) (3,733)
Other............................................................................... 2,227 --
----------- ---------
Net cash used in investing activities............................................. (543,900) (22,311)
----------- ---------
FINANCING ACTIVITIES:
Proceeds from borrowings............................................................ 904,680 67,903
Repayment of debt................................................................... (321,761) (53,403)
Debt issuance costs................................................................. (19,537) --
Proceeds from issuance of common stock and exercise of stock options................ 770 256
Proceeds from issuance of preferred securities...................................... -- 52,566
----------- ---------
Net cash provided by financing activities......................................... 564,152 67,322
----------- ---------
EFFECT OF EXCHANGE RATE ON CASH........................................................... (1,916) (79)
----------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS................................................. 18,723 42,790
CASH AND CASH EQUIVALENTS:
Beginning of period................................................................. 20,544 4,148
----------- ---------
End of period....................................................................... $ 39,267 $ 46,938
----------- ---------
----------- ---------
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
statements.
F-38
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1.
The accompanying condensed consolidated financial statements have been
prepared by Dura Automotive Systems, Inc. (the "Company"), without audit,
pursuant to the rules and regulations of the Securities and Exchange
Commission. The information furnished in the condensed consolidated
financial statements includes normal recurring adjustments and reflects all
adjustments which are, in the opinion of management, necessary for a fair
presentation of such financial statements. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. Although the Company believes that
the disclosures are adequate to make the information presented not
misleading, it is suggested that these condensed consolidated financial
statements be read in conjunction with the audited financial statements and
the notes thereto included in the Company's 1998 Annual Report to
Stockholders.
Revenues and operating results for the three months ended March 31, 1999 are
not necessarily indicative of the results to be expected for the full year.
2.
Inventories consisted of the following (in thousands):
<TABLE>
<CAPTION>
MAR. 31, DEC. 31,
1999 1998
------------ ------------
<S> <C> <C>
Raw materials.................................................... $ 73,375 $ 23,067
Work-in-process.................................................. 41,087 11,155
Finished goods................................................... 36,009 16,276
------------ ------------
$ 150,471 $ 50,498
------------ ------------
------------ ------------
</TABLE>
F-39
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
3.
Basic earnings per share were computed by dividing net income by the
weighted average number of Class A and Class B common shares outstanding
during the quarter. Diluted earnings per share include (i) the effects of
outstanding stock options using the treasury stock method and (ii) the
conversion of the Preferred Securities from their date of issuance on March
20, 1998 as follows (in thousands, except per share amounts):
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------
1999 1998
--------- ---------
<S> <C> <C>
Net income............................................................... $ 3,492 $ 4,576
Interest expense on mandatorily redeemable convertible preferred
securities, net of tax................................................. 611 76
--------- ---------
Net income applicable to common stockholders--diluted.................... $ 4,103 $ 4,652
--------- ---------
--------- ---------
Weighted average number of Class A common shares outstanding............. 9,552 4,172
Weighted average number of Class B common shares outstanding............. 3,325 4,654
--------- ---------
12,877 8,826
Dilutive effect of outstanding stock options after application of the
treasury stock method.................................................. 87 28
Dilutive effect of mandatorily redeemable convertible preferred
securities, assuming conversion........................................ 1,289 158
--------- ---------
Diluted shares outstanding............................................... 14,253 9,012
--------- ---------
--------- ---------
Basic earnings per share................................................. $ 0.27 $ 0.52
--------- ---------
--------- ---------
Diluted earnings per share............................................... $ 0.29 $ 0.52
--------- ---------
--------- ---------
</TABLE>
4.
In March 1998, the Company acquired Universal Tool & Stamping Co., Inc.
("Universal"), a manufacturer of jacks for the North American automotive
industry, for approximately $18.0 million. The acquisition provided the
Company with a market presence for jacks in North America and added Honda as
a significant new customer.
In April 1998, the Company acquired all of the outstanding equity interests
of Trident Automotive plc ("Trident"). Trident had revenues of approximately
$300 million in 1997, of which 69 percent was derived from sales of cable
assemblies, principally to the automotive OEM market, and the balance from
door handle assemblies, lighting and other products. Approximately 68
percent of Trident's revenues were generated in North America, 27 percent in
Europe and the remainder in Latin America. Trident's operations are
headquartered in Michigan with manufacturing and technical facilities in
Michigan, Tennessee, Arkansas, Canada, the United Kingdom, Germany, France
and Brazil. Pursuant to the terms of the agreement, the Company acquired all
of the outstanding equity interests of Trident for total consideration of
$87.5 million in cash. In addition, the Company assumed $75.0 million of
Trident's outstanding 10% Senior Subordinated Notes due 2005. The Company
also repaid Trident's outstanding senior indebtedness of approximately $53.0
million. The acquisition of Trident was financed with borrowings under the
Company's credit facility.
F-40
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
4. (CONTINUED)
In August 1998, the Company acquired the hinge business ("Hinge") of Tower
Automotive, Inc. for approximately $37.0 million. Hinge, which has annual
revenues of approximately $50.0 million, manufactures automotive hood and
deck lid hinges.
On March 15, 1999, Dura acquired through a cash tender offer approximately
95% of the outstanding ordinary shares of Adwest Automotive plc ("Adwest").
Adwest has annual revenues of approximately $400 million and is a supplier
of driver control products primarily for European OEMs. The Company paid
approximately $320 million to acquire all of the outstanding shares of
Adwest, including the assumption of approximately $106.1 million in
indebtedness in connection with the acquisition of Adwest.
On March 23, 1999, the Company completed its merger with Excel Industries,
Inc. ("Excel"). Excel has annual revenues of approximately $1.1 billion of
which 75 percent is derived from the automotive/light truck market and the
remainder from the recreational vehicle, mass transit and heavy truck
markets. Approximately 78 percent of Excel's revenues is generated in North
America with the remainder in Europe. The Company issued an aggregate of
approximately 5.1 million shares of its Class A Common Stock and paid $155.5
million in cash to Excel's former shareholders. The Company also assumed
approximately $100.0 million of indebtedness in connection with the merger
with Excel.
The cash consideration related to the acquisitions of Adwest and Excel was
financed with Borrowings under a new credit facility which is further
described in Note 5.
The acquisitions of Universal, Trident, Hinge, Excel and Adwest have been
accounted for using the purchase method of accounting and, accordingly, the
assets acquired and liabilities assumed have been recorded at fair value as
of the dates of acquisition, with the excess purchase price recorded as
goodwill. With respect to the acquisitions of Trident, Hinge, Excel and
Adwest, the assets and liabilities have been recorded based upon preliminary
estimates of fair value. At March 31, 1999, liabilities for approximately
$44.5 million for costs associated with the shutdown and consolidation of
certain acquired facilities and $30.9 million in severance costs are
recorded on the condensed consolidated balance sheet. No additional reserves
were recorded during the first quarter of 1999. The Company is further
evaluating the fair value of certain assets acquired and liabilities
assumed. As a result, the final evaluation will likely result in adjustments
to the preliminary allocations which may result in changes to goodwill.
The accompanying unaudited pro forma condensed results of operations for the
three months ended March 31, 1999 give effect to the acquisitions of Adwest
and Excel and the offering of the Senior Subordinated Notes, which is
further described in Note 5, as if such transactions had occurred at the
beginning of the period and exclude the effects of the extraordinary loss.
The accompanying unaudited pro forma condensed results of operations for the
three months ended March 31, 1998 give effect to the transactions described
above, the acquisitions of Universal, Trident and Hinge, the offering of
Class A common stock, which is further described in Note 7, and the offering
of the Convertible Trust Preferred Securities, which is further described in
Note 6, as if such transactions had occurred at the beginning of the period
and exclude the effects of the extraordinary loss. The 1998 results of
operations of Trident for the period prior to its acquisition date, which
are included in the unaudited pro forma financial information, reflect
pretax charges
F-41
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
4. (CONTINUED)
of approximately $3.6 million relating to the recognition of obligations to
certain Trident customers. The unaudited pro forma information does not
purport to represent what the Company's results of operations would actually
have been if such transactions in fact had occurred at such date or to
project the Company' results of future operations (in thousands, except per
share data):
<TABLE>
<CAPTION>
PRO FORMA FOR THE
THREE MONTHS ENDED
MARCH 31,
----------------------
1999 1998
---------- ----------
<S> <C> <C>
Revenues............................................................ $ 653,752 $ 627,033
Operating income.................................................... 49,285 40,028
Net income.......................................................... 13,540 10,921
Basic earnings per share............................................ $ 0.77 $ 0.63
Diluted earnings per share.......................................... 0.75 0.62
</TABLE>
5.
Long-term debt consisted of the following (in thousands):
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1999 1998
------------ ------------
<S> <C> <C>
Bank Credit Facility:
Tranche A and B term loans..................................... $ 525,740 $ --
Interim term loan.............................................. 200,000 --
Revolving credit facility...................................... 100,086 --
Trident 10% senior subordinated notes, due 2005.................. 80,934 81,150
Old Bank Credit Agreement........................................ -- 243,510
Other............................................................ 165,331 7,246
------------ ------------
1,072,091 331,906
Less--current maturities......................................... (14,945) (15,489)
------------ ------------
Total long-term debt............................................. $ 1,057,146 $ 316,417
------------ ------------
------------ ------------
</TABLE>
In connection with the acquisitions of Adwest and Excel, the Company entered
into an amended and restated $1.15 billion credit agreement ("Credit
Agreement"). The Credit Agreement provides for revolving credit facilities
of $400.0 million, a $275.0 million tranche A term loan, a $275.0 million
tranche B term loan and a $200.0 million interim term loan facility. As of
March 31, 1999, rates on borrowings under the Credit Agreement ranged from
5.28% to 10.0%. Borrowings under the tranche A term loan are due and payable
in March 2005 and borrowings under the tranche B term loan are due and
payable in March 2006. The revolving credit facility is available until
March 2005. Borrowings under the interim loan were due and payable in
September 2000, and, as further discussed below, were repaid in April 1999.
The Credit Agreement contains various restrictive covenants which limit
indebtedness, investments, rental obligations and cash dividends. The Credit
Agreement also requires the Company to maintain certain financial ratios
including minimum liquidity and interest coverage. The Company was in
compliance with the covenants as of
F-42
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
5. (CONTINUED)
March 31, 1999. Borrowings under the Credit Agreement are collateralized by
the assets of the Company.
The Credit Agreement provides the Company with the ability to denominate a
portion of its revolving credit borrowings in foreign currencies up to an
amount equal to $100.0 million. As of March 31, 1999, $84.0 million of
borrowings were denominated in US dollars, $3.4 million of borrowings were
denominated in Canadian dollars, $2.5 million of borrowings were denominated
in Australian dollars, $4.5 million of borrowings were denominated in Euros,
and $5.7 million in British pound sterling.
In connection with the termination of the Company's former credit facility,
the Company wrote-off deferred financing costs of approximately $2.7
million, net of income taxes. This charge is reflected as an extraordinary
item in the accompanying statement of operations for the three months ended
March 31, 1999.
On April 23, 1999, the Company completed the offering of $300 million and
Euro 100 million of senior subordinated notes ("Subordinated Notes"). The
Subordinated Notes mature in May 2009 and bear interest at 9% per year,
which is payable semi-annually. Net proceeds from this offering of
approximately $397.0 million were used to repay the $200.0 million interim
term loan, approximately $100.1 million to retire other indebtedness and
approximately $96.9 million will be used for general corporate purposes.
In December 1997, Trident issued senior subordinated notes with a face value
of $75 million. The notes bear interest at 10%, payable semiannually, and
are due in December 2005. The notes were recorded at their fair value of
$81.2 million. The premium in excess of face value will be amortized over
the life of the notes using the effective interest method.
6.
On March 20, 1998, Dura Automotive Systems Capital Trust (the "Issuer"), a
wholly owned statutory business trust of the Company, completed the offering of
$55.3 million of its 7 1/2% Convertible Trust Preferred Securities ("Preferred
Securities"), resulting in net proceeds to the Company of approximately $52.6
million. The Preferred Securities are redeemable, in whole or part, on or after
March 31, 2001 and all Preferred Securities must be redeemed no later than March
31, 2028. The Preferred Securities are convertible, at the option of the holder,
into Class A common stock of the Company at a rate of 0.5831 shares of Class A
common stock for each Preferred Security, which is equivalent to a conversion
price of $42 7/8 per share. The net proceeds of the offering were used to repay
outstanding indebtedness. Dividends on the Preferred Securities, net of the
related income tax benefit, are reflected as minority interest in the
accompanying condensed consolidated statements of operation.
No separate financial statements of the Issuer have been included herein.
The Company does not consider that such financial statements would be
material to holders of Preferred Securities because (i) all of the voting
securities of the Issuer will be owned, directly or indirectly, by the
Company, a reporting company under the Exchange Act, (ii) the Issuer has no
independent operations and exists for the sole purpose of issuing securities
representing undivided beneficial interests in the assets of the Issuer and
investing the proceeds thereof in 7 1/2% Convertible
F-43
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
6. (CONTINUED)
Subordinated Debentures due March 31, 2028 issued by the Company and (iii)
the obligations of the Issuer under the Preferred Securities are fully and
unconditionally guaranteed by the Company.
7.
On June 17, 1998, the Company completed a public offering of 3,100,000
shares of its Class A common stock at an offering price of $32.75 per share
("Offering"). Net proceeds to the Company, after underwriting discounts and
offering expenses, were approximately $95.0 million. Proceeds from the
Offering were used to retire outstanding indebtedness. Certain stockholders
of the Company converted 1,308,000 shares of Class B common stock of the
Company into Class A stock and sold such Class A stock concurrent with the
Offering. In addition, an employee of the Company exercised an option to
acquire 5,000 shares of Class A common stock at an exercise price of $14.50
per share, and sold such Class A shares concurrent with the Offering. On
July 1, 1998 the underwriters, pursuant to their over-allotment option,
purchased an additional 400,000 Class A shares resulting in additional net
proceeds of approximately $12.4 million to the Company.
8.
Comprehensive income reflects the change in equity of a business enterprise
during a period from transactions and other events and circumstances from
non-owner sources. For the Company, comprehensive income represents net
income adjusted for foreign currency translation adjustments. The Company
had a comprehensive loss of approximately $9.1 million for the three months
ended March 31, 1999 and comprehensive income of approximately $3.7 million
for the three months ended March 31, 1998.
9.
Effective January 1, 1999, the Company adopted the provisions of the
Financial Accounting Standards Board Statement of Position ("SOP") No. 98-5,
"Reporting on the Costs of Start-Up Activities." SOP 98-5 requires costs
associated with certain start-up activities be expensed as incurred versus
capitalizing and expensing them over a period of time. Previously, the
Company capitalized certain design and engineering costs which related to
future programs and amortized these costs over the life of the program once
production began. Pursuant to the provisions of SOP 98-5, the Company wrote
off the unamortized balance of such capitalized costs, net of income tax
benefits, of approximately $3.1 million. The write-off is reflected as a
cumulative effect of change in accounting in the accompanying condensed
consolidated statement of operations for the three months ended March 31,
1999.
In June 1998 the FASB issued SFAS No. 133 "Accounting for Derivative
Instruments and Hedging Activities" effective for years beginning after June
15, 1999. SFAS No. 133 establishes accounting and reporting standards
requiring that every derivative instrument, including certain derivative
instruments embedded in other contracts, be recorded in the balance sheet as
either an asset or liability measured at its fair value. SFAS No. 133
requires that changes in the derivative's fair value be recognized currently
in earnings unless specific hedge criteria are met. Special accounting for
qualifying hedges allow a derivative's gains or losses to offset related
results on the hedged item in the income statement and requires that a
company must formally document, designate and assess
F-44
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
9. (CONTINUED)
the effectiveness of transactions that receive hedge accounting. The Company
has not yet quantified the impacts of adopting SFAS No. 133.
10.
Supplemental cash flow information (in thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------
1999 1998
--------- ---------
<S> <C> <C>
Cash paid for--
Interest............................................................... $ 7,637 $ 3,032
Income taxes........................................................... 3,731 2,410
</TABLE>
11. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION:
The following consolidating financial information presents balance sheet,
statement of operations and cash flow information related to the Company's
businesses. Each Guarantor is a direct or indirect wholly owned subsidiary
of the Company and has fully and unconditionally guaranteed the 9% senior
subordinated notes issued by Dura Operating Corp., on a joint and several
basis. Separate financial statements and other disclosures concerning the
Guarantors have not been presented because management believes that such
information is not material.
DURA AUTOMOTIVE SYSTEMS, INC.
CONSOLIDATING STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1998
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
DURA NON-
OPERATING GUARANTOR GUARANTOR
CORP. COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
----------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues......................................... $ 84,006 $ 14,584 $ 27,451 $ (295) $ 125,746
Cost of sales.................................... 70,985 11,428 22,353 (295) 104,471
----------- ----------- ----------- ------------ ------------
Gross profit................................... 13,021 3,156 5,098 -- 21,275
Selling, general and administrative expenses..... 5,685 613 2,862 -- 9,160
Amortization expense............................. 846 240 165 -- 1,251
----------- ----------- ----------- ------------ ------------
Operating income............................... 6,490 2,303 2,071 -- 10,864
Interest expense, net............................ 2,589 139 210 -- 2,938
----------- ----------- ----------- ------------ ------------
Income before provision for income taxes,
equity in earnings (losses) of subsidiaries
and minority interest........................ 3,901 2,164 1,861 -- 7,926
Provision for income taxes....................... 1,527 847 900 -- 3,274
Equity in earnings (losses) of subsidiaries...... 2,278 -- -- (2,278) --
Minority interest--dividend on trust preferred
securities, net................................ 76 -- -- -- 76
----------- ----------- ----------- ------------ ------------
Net income (loss).............................. $ 4,576 $ 1,317 $ 961 $ (2,278) $ 4,576
----------- ----------- ----------- ------------ ------------
----------- ----------- ----------- ------------ ------------
</TABLE>
F-45
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
11. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION: (CONTINUED)
DURA AUTOMOTIVE SYSTEMS, INC.
CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 1998
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
DURA NON-
OPERATING GUARANTOR GUARANTOR
CORP. COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
----------- ------------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income....................................... $ 4,576 $ 1,317 $ 961 $ (2,278) $ 4,576
Adjustments to reconcile net income to net cash
provided by (used for) operating activities --
Depreciation and amortization.................. 1,666 538 863 -- 3,067
(Income)/loss from investment in
subsidiaries................................. (2,278) -- -- 2,278 --
Due (to)/from affiliates....................... (8,828) 9,533 (705) -- --
Changes in other operating items............... (192) (9,216) (377) -- (9,785)
----------- ------ ----------- ------------- -------------
Net cash provided by (used for) operating
activities................................. (5,056) 2,172 742 -- (2,142)
----------- ------ ----------- ------------- -------------
INVESTING ACTIVITIES:
Capital expenditures, net........................ (1,821) (634) (1,278) -- (3,733)
Acquisitions, net................................ (18,578) -- -- -- (18,578)
----------- ------ ----------- ------------- -------------
Net cash used in investing activities........ (20,399) (634) (1,278) -- (22,311)
----------- ------ ----------- ------------- -------------
FINANCING ACTIVITIES:
Proceeds from borrowings......................... 65,750 -- 2,153 -- 67,903
Repayments of debt............................... (52,500) -- (903) -- (53,403)
Debt financing (to)/from affiliates.............. (18) -- 18 -- --
Proceeds from issuance of common stock and
exercise of stock options...................... 256 -- -- -- 256
Proceeds from issuance of preferred securities... 52,566 -- -- -- 52,566
----------- ------ ----------- ------------- -------------
Net cash provided by financing activities.... 66,054 -- 1,268 -- 67,322
----------- ------ ----------- ------------- -------------
EFFECT OF EXCHANGE RATES ON CASH................. -- -- (79) -- (79)
----------- ------ ----------- ------------- -------------
NET CHANGE IN CASH AND CASH EQUIVALENTS.......... 40,599 1,538 653 -- 42,790
CASH AND CASH EQUIVALENTS, beginning of period... 1,292 134 2,722 -- 4,148
----------- ------ ----------- ------------- -------------
CASH AND CASH EQUIVALENTS, end of period......... $ 41,891 $ 1,672 $ 3,375 $ -- $ 46,938
----------- ------ ----------- ------------- -------------
----------- ------ ----------- ------------- -------------
</TABLE>
F-46
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
11. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION: (CONTINUED)
DURA AUTOMOTIVE SYSTEMS, INC.
CONSOLIDATING BALANCE SHEETS AS OF MARCH 31, 1999
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
DURA NON-
OPERATING GUARANTOR GUARANTOR
CORP. COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
------------ ----------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents................ $ 7,104 $ (13) $ 32,176 $ -- $ 39,267
Accounts receivable, net................. 187,667 96,506 187,109 -- 471,282
Inventories.............................. 41,600 35,621 73,250 -- 150,471
Other current assets..................... 38,788 28,715 61,579 -- 129,082
Due from affiliates...................... 21,537 41,416 505 (63,458) --
------------ ----------- ------------ ------------- ------------
Total current assets................... 296,696 202,245 354,619 (63,458) 790,102
------------ ----------- ------------ ------------- ------------
Property, Plant & Equipment, net........... 138,646 130,950 253,691 -- 523,287
Investment in Subsidiaries................. 476,194 48,177 382,652 (903,865) 3,158
Notes Receivable from Affiliates........... 198,009 -- 27,689 (225,698) --
Goodwill, net.............................. 292,066 175,908 430,368 -- 898,342
Other Assets, net.......................... 27,716 3,494 14,468 -- 45,678
------------ ----------- ------------ ------------- ------------
$ 1,429,327 $ 560,774 $ 1,463,487 $ (1,193,021) $2,260,567
------------ ----------- ------------ ------------- ------------
------------ ----------- ------------ ------------- ------------
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current Liabilities:
Accounts payable......................... $ 106,491 $ 46,655 $ 129,979 $ -- $ 283,125
Due to affiliates........................ 25,146 21,481 16,831 (63,458) --
Accrued liabilities...................... 64,183 65,319 96,640 -- 226,142
Current maturities of long-term debt..... 397 1,347 13,201 -- 14,945
------------ ----------- ------------ ------------- ------------
Total current liabilities.............. 196,217 134,802 256,651 (63,458) 524,212
------------ ----------- ------------ ------------- ------------
Long-Term Debt, net of current
maturities............................... 701,391 11,597 344,158 -- 1,057,146
Other Noncurrent Liabilities............... 45,411 71,184 113,902 -- 230,497
Notes Payable to Affiliates................ 24,457 27,523 173,718 (225,698) --
------------ ----------- ------------ ------------- ------------
Total liabilities...................... 967,476 245,106 888,429 (289,156) 1,811,855
------------ ----------- ------------ ------------- ------------
Mandatorily Redeemable Convertible Trust
Preferred Securities..................... 55,250 -- -- -- 55,250
Stockholders' Investment................... 406,601 315,668 575,058 (903,865) 393,462
------------ ----------- ------------ ------------- ------------
$ 1,429,327 $ 560,774 $ 1,463,487 $ (1,193,021) $2,260,567
------------ ----------- ------------ ------------- ------------
------------ ----------- ------------ ------------- ------------
</TABLE>
F-47
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
11. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION: (CONTINUED)
DURA AUTOMOTIVE SYSTEMS, INC.
CONSOLIDATING STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1999
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
DURA NON-
OPERATING GUARANTOR GUARANTOR
CORP. COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
---------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues........................................ $ 108,955 $ 69,448 $ 90,848 $ (4,550) $ 264,701
Cost of sales................................... 88,609 57,634 76,526 (4,550) 218,219
---------- ----------- ----------- ------------ ------------
Gross profit.................................. 20,346 11,814 14,322 -- 46,482
Selling, general and administrative expenses.... 8,034 1,929 6,934 -- 16,897
Amortization expense............................ 1,125 1,111 1,449 -- 3,685
---------- ----------- ----------- ------------ ------------
Operating income.............................. 11,187 8,774 5,939 -- 25,900
Interest expense, net........................... 2,540 711 3,644 -- 6,895
---------- ----------- ----------- ------------ ------------
Income before provision for income taxes,
equity in earnings (losses) of subsidiaries
and minority interest....................... 8,647 8,063 2,295 -- 19,005
Provision for income taxes...................... 3,079 2,872 1,760 -- 7,711
Equity in earnings (losses) of subsidiaries..... 3,693 -- 1,633 (6,668) (1,342)
Minority interest--dividend on trust preferred
securities, net............................... 611 -- -- -- 611
---------- ----------- ----------- ------------ ------------
Income (loss) before extraordinary item....... 8,650 5,191 2,168 (6,668) 9,341
Extraordinary item--loss on early extinguishment
of debt, net.................................. 2,011 -- 691 -- 2,702
Cumulative effect of change in accounting,
net........................................... (3,147) -- -- -- (3,147)
---------- ----------- ----------- ------------ ------------
Net income (loss)............................. $ 3,492 $ 5,191 $ 1,477 $ (6,668) $ 3,492
---------- ----------- ----------- ------------ ------------
---------- ----------- ----------- ------------ ------------
</TABLE>
F-48
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
11. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION: (CONTINUED)
DURA AUTOMOTIVE SYSTEMS, INC.
CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 1999
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
DURA NON-
OPERATING GUARANTOR GUARANTOR
CORP. COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
----------- ----------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income..................................... $ 3,492 $ 5,191 $ 1,477 $ (6,668) $ 3,492
Adjustments required to reconcile net income to
net cash provided by (used for) operating
activities--
Depreciation and amortization................ 3,364 2,669 4,474 -- 10,507
Deferred income tax provision................ (2,187) (82) (788) -- (3,057)
Extraordinary loss on extinguishment of
debt....................................... 2,011 -- 691 -- 2,702
Cumulative effect of change in accounting,
net........................................ 3,147 -- -- -- 3,147
(Income)/loss from investment in
subsidiaries............................... (4,854) -- (1,814) 6,668 --
Due (to)/from affiliates..................... 12,522 (20,452) 7,930 -- --
Equity in losses of affiliates............... 1,161 -- 181 -- 1,342
Changes in other operating items............. 36,934 9,588 (64,268) -- (17,746)
----------- ----------- ----------- ------------- -------------
Net cash provided by (used for) operating
activities............................... 55,590 (3,086) (52,117) -- 387
----------- ----------- ----------- ------------- -------------
INVESTING ACTIVITIES:
Capital expenditures, net...................... (1,215) (2,202) (2,577) -- (5,994)
Acquisitions, net.............................. (442,501) -- (97,632) -- (540,133)
Other.......................................... -- 2,227 -- -- 2,227
----------- ----------- ----------- ------------- -------------
Net cash provided by (used for) investing
activities................................. (443,716) 25 (100,209) -- (543,900)
----------- ----------- ----------- ------------- -------------
FINANCING ACTIVITIES:
Proceeds from borrowings....................... 772,550 21,522 110,608 -- 904,680
Repayments of debt............................. (233,577) (17,772) (70,412) -- (321,761)
Debt financing (to)/from affiliates............ (126,223) (145) 126,368 -- --
Debt issuance costs............................ (19,537) -- -- -- (19,537)
Proceeds from issuance of common stock and
exercise of stock options.................... 770 -- -- -- 770
----------- ----------- ----------- ------------- -------------
Net cash provided by financing activities.... 393,983 3,605 166,564 -- 564,152
----------- ----------- ----------- ------------- -------------
EFFECT OF EXCHANGE RATES ON CASH................. -- -- (1,916) -- (1,916)
----------- ----------- ----------- ------------- -------------
NET CHANGE IN CASH AND CASH EQUIVALENTS.......... 5,857 544 12,322 -- 18,723
CASH AND CASH EQUIVALENTS, beginning of period... 1,247 (557) 19,854 -- 20,544
----------- ----------- ----------- ------------- -------------
CASH AND CASH EQUIVALENTS, end of period......... $ 7,104 $ (13) $ 32,176 $ -- $ 39,267
----------- ----------- ----------- ------------- -------------
----------- ----------- ----------- ------------- -------------
</TABLE>
F-49
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To: Excel Industries, Inc.
We have audited the accompanying consolidated balance sheets of Excel
Industries, Inc. (an Indiana corporation) and Subsidiaries as of December 27,
1997 and January 2, 1999 and the related consolidated statements of income,
shareholders' equity and cash flows for each of the three years in the period
ended January 2, 1999. 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 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 audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Excel Industries, Inc. and
Subsidiaries as of December 27, 1997 and January 2, 1999, and the results of
their operations and their cash flows for each of the three years in the period
ended January 2, 1999 in conformity with generally accepted accounting
principles.
As explained in Note 2 to the financial statements, effective December 28,
1997, the Company changed its method of computing depreciation.
ARTHUR ANDERSEN LLP
Minneapolis, Minnesota
June 16, 1999
F-50
<PAGE>
EXCEL INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEET
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
DEC. 27, JAN. 2,
1997 1999
----------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and short-term investments....................................................... $ 2,317 $ 16,290
Marketable securities................................................................. 24,420 14,000
Accounts receivable--trade, less allowances of $1,318 in 1997 and $1,810
in 1998............................................................................. 140,910 167,400
Customer tooling to be billed......................................................... 22,356 30,649
Inventories........................................................................... 40,929 59,402
Prepaid expenses...................................................................... 14,929 15,640
----------- -----------
Total current assets................................................................ 245,861 303,381
Property, plant and equipment:
Land.................................................................................. 3,227 5,153
Buildings and improvements............................................................ 52,056 77,101
Machinery and equipment............................................................... 225,046 302,691
Accumulated depreciation.............................................................. (119,361) (152,276)
----------- -----------
160,968 232,669
Goodwill, net of accumulated amortization of $5,387 in 1997 and $7,012
in 1998............................................................................... 35,960 41,865
Other assets............................................................................ 15,008 16,469
----------- -----------
$ 457,797 $ 594,384
----------- -----------
----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable...................................................................... $ 85,469 $ 107,052
Accrued liabilities:
Salaries and wages.................................................................. 9,249 16,875
Employee benefits................................................................... 11,136 14,464
Other............................................................................... 20,785 25,439
Income taxes payable.................................................................. -- 3,599
Current maturities of long-term debt.................................................. 2,672 17,156
----------- -----------
Total current liabilities........................................................... 129,311 184,585
Long-term debt.......................................................................... 105,943 149,879
Long-term employee benefits............................................................. 32,934 44,469
Other long-term liabilities............................................................. 4,294 9,085
Minority interest....................................................................... -- 12,108
Commitments and contingent liabilities.................................................. -- --
Shareholders' equity:
Preferred shares--no par value, authorized 1,000 shares; none issued.................. -- --
Common shares--no par value, authorized 20,000 shares; issued and outstanding in 1997,
12,414; issued in 1998, 12,468...................................................... 114,730 115,646
Retained earnings..................................................................... 70,585 81,373
Accumulated other comprehensive income................................................ -- 1,045
Treasury shares at cost, 289 shares................................................... -- (3,806)
----------- -----------
Total shareholders' equity.......................................................... 185,315 194,258
----------- -----------
$ 457,797 $ 594,384
----------- -----------
----------- -----------
</TABLE>
The accompanying notes are an integral part of these statements.
F-51
<PAGE>
EXCEL INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF INCOME
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
------------------------------------
<S> <C> <C> <C>
DEC. 28, DEC. 27, JAN. 2,
1996 1997 1999
---------- ---------- ------------
Net sales.................................................................. $ 887,741 $ 962,333 $ 1,106,103
Cost of goods sold......................................................... 783,375 846,990 995,982
---------- ---------- ------------
Gross profit............................................................. 104,366 115,343 110,121
Selling, administrative and engineering expenses........................... 65,652 79,267 78,615
---------- ---------- ------------
Operating income......................................................... 38,714 36,076 31,506
Interest expense........................................................... 9,784 10,984 11,628
Other income, net.......................................................... (1,736) (1,930) (2,074)
---------- ---------- ------------
Income before income taxes and minority interest......................... 30,666 27,022 21,952
Provision for income taxes................................................. 11,550 9,458 3,632
Minority interest.......................................................... -- -- 1,367
---------- ---------- ------------
Net income............................................................... $ 19,116 $ 17,564 $ 16,953
---------- ---------- ------------
---------- ---------- ------------
Net income per share:
Basic.................................................................... $ 1.79 $ 1.59 $ 1.37
Diluted.................................................................. 1.62 1.48 1.36
Cash dividends per share................................................... $ .455 $ .50 $ .50
---------- ---------- ------------
---------- ---------- ------------
</TABLE>
The accompanying notes are an integral part of these statements.
F-52
<PAGE>
EXCEL INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
----------------------------------
<S> <C> <C> <C>
DEC. 28, DEC. 27, JAN. 2,
1996 1997 1999
---------- ---------- ----------
Cash flows from operating activities:
Net income.................................................................. $ 19,116 $ 17,564 $ 16,953
---------- ---------- ----------
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization............................................. 26,246 33,382 39,679
Deferred income taxes..................................................... (1,613) 3,093 782
Other..................................................................... 348 2,093 2,121
Changes in assets and liabilities, excluding effect of acquisitions:
Accounts receivable and prepaid expenses................................ 19,206 (12,396) 14,769
Inventories and customer tooling........................................ 25,955 (3,180) 5,119
Accounts payable and accrued liabilities................................ (19,409) (79) (3,421)
---------- ---------- ----------
Total adjustments..................................................... 50,733 22,913 59,049
---------- ---------- ----------
Net cash provided by operating activities............................. 69,849 40,477 76,002
---------- ---------- ----------
Cash flows from investing activities:
Purchase of property, plant and equipment................................... (29,209) (39,287) (45,958)
Businesses acquired......................................................... (58,984) (2,415) (10,080)
Sale (purchase) of investments, net......................................... 8,290 (2,471) 10,420
Proceeds from disposal of business.......................................... -- 6,793 --
Other....................................................................... 929 199 1,693
---------- ---------- ----------
Net cash used for investing activities................................ (78,974) (37,181) (43,925)
---------- ---------- ----------
Cash flows from financing activities:
Issuance of common shares................................................... 278 543 916
Payments of long-term debt.................................................. (79,934) (2,470) (15,905)
Dividends................................................................... (4,875) (5,632) (6,165)
Purchase of treasury shares................................................. (155) -- (3,806)
Issuance of long-term debt.................................................. 100,000 -- 3,359
Other....................................................................... -- -- 3,497
---------- ---------- ----------
Net cash provided by (used for) financing activities.................. 15,314 (7,559) (18,104)
---------- ---------- ----------
Net change in cash and short-term investments................................. 6,189 (4,263) 13,973
Cash and short-term investments at beginning of period........................ 391 6,580 2,317
---------- ---------- ----------
Cash and short-term investments at end of period.............................. $ 6,580 $ 2,317 $ 16,290
---------- ---------- ----------
---------- ---------- ----------
Supplemental disclosures of cash flow information
Cash paid during the year for:
Interest.................................................................... $ 9,288 $ 11,182 $ 11,504
Income taxes, net of refunds................................................ 10,524 8,895 3,594
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of these statements.
F-53
<PAGE>
EXCEL INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
ACCUMULATED
COMMON OTHER
SHARES COMMON RETAINED COMPREHENSIVE TREASURY
OUTSTANDING SHARES EARNINGS INCOME SHARES TOTAL
----------- ---------- --------- --------------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 30, 1995................. 10,703 $ 95,157 $ 44,412 $ (659) $ (4,593) $ 134,317
Comprehensive income:
Net income................................. 19,116 19,116
Cumulative translation adjustment.......... 45 45
Minimum pension liability adjustment....... 499 499
----------
Total comprehensive income................... 19,660
----------
Dividends.................................... -- -- (4,875) -- -- (4,875)
Share options exercised...................... 12 86 -- -- -- 86
Shares issued under employee stock purchase
plan....................................... 15 192 -- -- -- 192
Warrants issued.............................. 1,500 -- -- -- 1,500
Treasury shares purchased.................... (12) -- -- -- (155) (155)
Treasury shares canceled..................... -- (4,748) -- -- 4,748 --
----------- ---------- --------- ------ --------- ----------
BALANCE AT DECEMBER 28, 1996................. 10,718 92,187 58,653 (115) -- 150,725
Comprehensive income:
Net income................................. 17,564 17,564
Cumulative translation adjustment.......... (45) (45)
Minimum pension liability adjustment....... 160 160
----------
Total comprehensive income................... 17,679
----------
Dividends.................................... -- -- (5,632) -- -- (5,632)
Share options exercised...................... 9 116 -- -- -- 116
Shares issued under employee stock purchase
plan....................................... 22 427 -- -- -- 427
Conversion of 10% subordinated notes......... 1,665 22,000 -- -- -- 22,000
----------- ---------- --------- ------ --------- ----------
BALANCE AT DECEMBER 27, 1997................. 12,414 114,730 70,585 -- -- 185,315
Comprehensive income:
Net income................................. 16,953 16,953
Cumulative translation adjustment.......... 2,042 2,042
Minimum pension liability adjustment....... (997) (997)
----------
Total comprehensive income................... 17,998
----------
Dividends.................................... -- -- (6,165) -- -- (6,165)
Share options exercised...................... 13 162 -- -- -- 162
Shares issued under employee stock purchase
plan....................................... 41 754 -- -- -- 754
Treasury shares purchased.................... (289) -- -- -- (3,806) (3,806)
----------- ---------- --------- ------ --------- ----------
BALANCE AT JANUARY 2, 1999................... 12,179 $ 115,646 $ 81,373 $ 1,045 $ (3,806) $ 194,258
----------- ---------- --------- ------ --------- ----------
----------- ---------- --------- ------ --------- ----------
</TABLE>
The accompanying notes are an integral part of these statements.
F-54
<PAGE>
EXCEL INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. DESCRIPTION OF BUSINESS
The Company designs, manufactures and sells automotive window, door and
seating systems and decorative trims for original equipment manufacturers (OEMs)
and Tier I suppliers. It also manufactures and sells appliances, jacks and
couplers, and window and door systems for the recreational vehicle industry and
windows for the mass transit and heavy truck industries. The Company has
manufacturing facilities located in the United States, Mexico, Germany, United
Kingdom, Spain, Portugal, and the Czech Republic.
Effective July 1, 1998, the Company acquired 70 percent of Schade GmbH & Co.
KG, headquartered in Plettenberg, Germany as described in note 3.
2. SIGNIFICANT ACCOUNTING PRINCIPLES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company
and its majority-owned subsidiaries. All significant intercompany transactions,
profits and balances are eliminated. The Company has a 25% interest in a
Brazilian joint venture, which is accounted for on the equity method and
resulted in losses of $1.5 million in 1998.
FISCAL YEAR
The Company's fiscal year consists of 52 or 53 weeks ending on the Saturday
nearest the calendar year end.
NET INCOME PER SHARE
In 1997, the Company adopted Statement of Financial Accounting Standards
(SFAS) No. 128, "Earnings Per Share." All net income per share amounts reported
herein are in accordance with this Statement.
Basic net income per share is computed using the weighted average number of
shares outstanding during the period. Shares used to compute basic net income
per share were 10,709,000 for 1996, 11,079,000 for 1997 and 12,370,000 for 1998.
Diluted earnings per share assumes, when dilutive, the exercise of common
share options and warrants outstanding and the conversion of the 10% convertible
subordinated notes until their conversion into common shares in October, 1997.
Shares used to compute diluted earnings per share included the number of shares
used for basic net income per share plus 56,000 in 1996, 187,000 in 1997 and
118,000 in 1998 for the exercise of options and warrants and 2,220,000 in 1996
and 1,370,000 in 1997 for the assumed conversion of the notes. Net income used
to compute diluted earnings per share included an add-back of $1,907,000 in 1996
and $1,192,000 in 1997 for interest, net of taxes, on the notes.
SHORT-TERM INVESTMENTS AND MARKETABLE SECURITIES
Short-term investments amounting to $2,000,000 at December 27, 1997 and
$3,770,000 at January 2, 1999 consist of investments generally held in money
market funds.
Marketable securities represent investments with maturities generally longer
than 90 days. All securities mature prior to December, 1999 and are considered
available for sale. Interest and dividends
F-55
<PAGE>
EXCEL INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2. SIGNIFICANT ACCOUNTING PRINCIPLES (CONTINUED)
on marketable securities are included in income as earned. Realized gains or
losses are determined on the specific identification method.
Marketable securities are carried at cost, which approximates market value,
and consist of the following (in thousands):
<TABLE>
<CAPTION>
1997 1998
--------- ---------
<S> <C> <C>
Government securities................................................... $ 10,885 $ --
Tax-free municipal securities........................................... 5,335 --
Municipal fund par value preferred shares............................... 2,200 --
Other tax-free securities............................................... 6,000 14,000
--------- ---------
$ 24,420 $ 14,000
--------- ---------
--------- ---------
</TABLE>
Other income includes interest income of $1,772,000 in 1996, $1,957,000 in
1997 and $2,005,000 in 1998.
INVENTORIES
Inventories are valued at the lower of cost or market. At December 27, 1997,
the LIFO method was used to value 84% of inventories. At January 2, 1999, the
last-in, first-out (LIFO) method was used to determine cost for approximately
60% of inventories while the first-in, first-out (FIFO) method was used for the
remaining inventories primarily related to foreign inventories.
CUSTOMER TOOLING TO BE BILLED
Excess of cost over billings on uncompleted tooling projects represents
costs incurred by the Company in the production of customer-owned tooling to be
used by the Company in the manufacture of its products. The Company receives a
specific purchase order for this tooling and is reimbursed by the customer
within one operating cycle. Costs are deferred until reimbursed by the customer.
Forecasted losses on incomplete projects are recognized currently.
PROPERTIES
Property, plant and equipment are carried at cost and include expenditures
for new facilities and those which substantially increase the useful lives of
existing plant and equipment. Expenditures for repairs and maintenance are
expensed as incurred.
DEPRECIATION
The Company provides for depreciation of property, plant and equipment using
methods and rates designed to amortize the cost of such equipment over its
useful life. The estimated useful lives range from 10 to 40 years for buildings
and improvements and 2 to 20 years for machinery and equipment. Prior to 1998,
depreciation was computed using accelerated methods of depreciation for new
plant and equipment. A survey conducted by the Company confirmed that the
straight-line method of depreciation as the predominant method used throughout
the automotive supply industry. Accordingly, for new capital expenditures for
the 1998 fiscal year and thereafter, the Company adopted the straight-line
method of depreciation for financial reporting purposes. The favorable effect of
the change on net income for the year ending January 2, 1999 was approximately
$1.1 million or $.09 per share.
F-56
<PAGE>
EXCEL INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2. SIGNIFICANT ACCOUNTING PRINCIPLES (CONTINUED)
GOODWILL
The excess of purchase price over the fair value of net assets of acquired
businesses (goodwill) is amortized on a straight-line basis over 15 to 40 years.
The Company periodically evaluates whether events and circumstances have
occurred which may affect the estimated useful life or the recoverability of the
remaining balance of its goodwill and other long-lived assets. If such events or
circumstances were to indicate that the carrying amount of these assets would
not be recoverable, the Company would estimate the future cash flows expected to
result from the use of the assets and their eventual disposition. If the sum of
the expected future cash flows (undiscounted and without interest charges) were
less than the carrying amount of goodwill, the Company would recognize an
impairment loss.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company estimates the fair value of all financial instruments where the
face value differs from the fair value, primarily long-term debt, based upon
quoted amounts or the current rates available for similar financial instruments.
If fair value accounting had been used at January 2, 1999, long-term debt would
exceed the reported level by approximately $9 million.
REVENUE RECOGNITION AND SALES COMMITMENTS
The Company recognizes revenue as its products are shipped to its customers.
The Company enters into agreements with its customers at the beginning of a
given vehicle's life to produce products. Once such agreements are entered into
by the Company, fulfillment of the customers' purchasing requirements is
generally the obligation of the Company for the entire production life of the
vehicle, generally with terms of up to seven years. In certain instances, the
Company may be committed under existing agreements to supply product to its
customers at selling prices which are not sufficient to cover the direct cost to
produce such product. In such situations, the Company records a liability for
the estimated future amount of such losses. Such losses are recognized at the
time that the loss is probable and reasonably estimable. The Company recorded a
$4.5 million reserve for these losses in 1998.
INCOME TAXES
Deferred income taxes are provided using the liability method in accordance
with SFAS No. 109, "Accounting for Income Taxes".
FOREIGN CURRENCY TRANSLATION
For operations outside the United States that prepare financial statements
in currencies other than the United States dollar, the balance sheet, income,
expense and cash flow amounts are translated in accordance with SFAS No. 52
"Foreign Currency Translation".
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
disclosure 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.
F-57
<PAGE>
EXCEL INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2. SIGNIFICANT ACCOUNTING PRINCIPLES (CONTINUED)
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In June 1998 the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities," effective for
years beginning after June 15, 1999. SFAS No. 133 establishes accounting and
reporting standards requiring that every derivative instrument, including
certain derivative instruments embedded in other contracts, be recorded in the
balance sheet as either an asset or liability measured at its fair value. SFAS
No. 133 requires that changes in the derivative's fair value be recognized
currently in earnings unless specific hedge criteria are met. Special accounting
for qualifying hedges allow a derivative's gains or losses to offset related
results on the hedged item in the statement of operations and requires that a
company must formally document, designate and assess the effectiveness of
transactions that receive hedge accounting. The Company has not yet quantified
the impacts of adopting SFAS No. 133 and has not yet determined the timing of
adoption.
3. ACQUISITIONS AND DISPOSALS
Effective July 1, 1998, the Company purchased through its wholly-owned
subsidiary, Excel Industries Germany GmbH, a 70% interest in Schade GmbH & Co.
K.G. (Schade) a German limited partnership. The aggregate purchase price for
Schade was DM 17,036,400, or approximately $9,689,000 plus transaction costs.
The Company also assumed approximately $68 million of Schade's debt. The amount
of the Company's contribution to the capital of Schade was DM 27,340,000, or
approximately $15,548,000. Funds for the purchase price for the interests and
the contribution came from the Company's cash on hand.
The remaining 30 percent of Schade is owned by Hella KG Hueck & Co., another
international OEM supplier. Schade has sales and manufacturing operations in
Germany, Portugal, Spain, United Kingdom and the Czech Republic with annual
sales of more than $300 million. Schade and its affiliated companies are engaged
in the manufacture and distribution of decorative trims, body components,
injected molded plastic components and modular windows for the automotive
industry.
The acquisition of Schade was accounted for as a purchase. The assets
acquired and liabilities assumed have been recorded based on preliminary
estimates of fair value as of the date of acquisition. The Company does not
believe the final allocation of purchase price will be materially different from
preliminary allocations. Any changes to the preliminary estimates will be
reflected as an adjustment to goodwill. The excess of the purchase price over
the estimated fair value of net assets acquired has been accounted for as
goodwill and is being amortized over 40 years using the straight-line method.
The accompanying consolidated statements of income include the operating
results of Schade since July 1, 1998. Pro forma unaudited consolidated operating
results of the Company and Schade for the year ended December 27, 1997 and
January 2, 1999, assuming the acquisition had been made as of the beginning of
1997 and 1998, are summarized below (in thousands, except per share amounts):
<TABLE>
<CAPTION>
YEAR ENDED
--------------------------
<S> <C> <C>
1997 1998
------------ ------------
Net sales......................................................... $ 1,243,541 $ 1,264,654
Net income........................................................ 21,116 18,919
Net income per share, basic....................................... 1.91 1.53
Net income per share, diluted..................................... 1.77 1.52
</TABLE>
F-58
<PAGE>
EXCEL INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
3. ACQUISITIONS AND DISPOSALS (CONTINUED)
On April 3, 1996, the Company completed the purchase of all of the
outstanding common shares of Anderson Industries, Inc. (Anderson) for
approximately $62,562,000 including five-year warrants for 381,000 shares of
Excel common stock exercisable at $13.25 per share (valued at $1.5 million) and
expenses of the transaction.
The acquisition of Anderson, a holding company whose main asset was Atwood
Industries, Inc. (Atwood), was accounted for as a purchase. Accordingly, the
purchase price was allocated to the net assets acquired based upon their
estimated fair market values. The excess of the purchase price over the
estimated fair value of net assets acquired, $26,482,000, was accounted for as
goodwill and is being amortized over 35 years using the straight-line method.
The accompanying consolidated statements of income include the operating
results of Anderson since April 3, 1996. Pro forma unaudited consolidated
operating results of the Company and Anderson, assuming the acquisition had been
made as of the beginning of 1996, are summarized below (in thousands except per
share amounts):
<TABLE>
<CAPTION>
YEAR ENDED
1996
-----------
<S> <C>
Net sales........................................................................ $ 985,555
Net income....................................................................... 20,745
Net income per share, basic...................................................... 1.94
Net income per share, diluted.................................................... 1.74
</TABLE>
The unaudited pro forma financial information presented for both
acquisitions is not necessarily indicative either of the results of operations
that would have occurred had the transactions been completed on the indicated
dates or of future results of operations of the combined companies.
In the first quarter of 1997 the Company recorded an $8.7 million pre-tax
restructuring reserve for the closure of manufacturing facilities in 1997 at
Rockford, Illinois and Battle Creek, Michigan which had been acquired as part of
the acquisition of Anderson. The reserve consists of personnel related costs
(mainly severance pay and fringe benefits) and costs related to the disposals of
buildings and equipment. The reserve increased the associated goodwill by $5.4
million (which is net of income taxes) and was not a charge to earnings. Total
charges to the reserve (personnel related costs and costs related to the
disposals of buildings and equipment) through January 2, 1999 were $7.8 million.
Any excess reserves remaining at the completion of the restructuring activities
will be recorded as a reduction in goodwill.
In January, 1997, the Company completed the purchase of the assets of The
Compliance Group located in Greendale, Wisconsin for approximately $2.4 million
in cash. The excess of the purchase price over the estimated fair value of
assets acquired ($2.5 million) has been accounted for as goodwill and is being
amortized over 15 years using the straight-line method.
In May, 1997, the Company completed the sale of the automotive parking brake
product line for $2.9 million, which was acquired when the Company purchased
Anderson. Sales were approximately $6 million in 1997 and $12 million in 1996 or
less than 2% of total sales. At the date of the Anderson acquisition, this asset
was held for sale and the gain on the sale was recorded as an adjustment to
goodwill.
In September, 1997, the Company announced the closure of its Italian
manufacturing division. Closing expenses recorded in the third quarter of 1997
were approximately $1,242,000. Historically, this
F-59
<PAGE>
EXCEL INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
3. ACQUISITIONS AND DISPOSALS (CONTINUED)
division had annual sales of approximately $2.5 million and losses in excess of
$1 million. Losses in 1997 were approximately $900,000.
4. RESEARCH, ENGINEERING AND DEVELOPMENT
Research, engineering and development expenditures charged to operations
approximated $17,237,000 in 1996, $25,245,000 in 1997 and $28,900,000 in 1998.
5. INVENTORIES
Inventories consist of the following (in thousands):
<TABLE>
<CAPTION>
1997 1998
--------- ---------
<S> <C> <C>
Raw materials........................................................... $ 23,591 $ 32,515
Work in process and finished goods...................................... 18,674 28,553
LIFO reserve............................................................ (1,336) (1,666)
--------- ---------
$ 40,929 $ 59,402
--------- ---------
--------- ---------
</TABLE>
6. PENSION AND OTHER EMPLOYEE BENEFIT PLANS
PENSION AND PROFIT SHARING PLANS
The Company and its subsidiaries provide retirement benefits to
substantially all employees through various pension, savings and profit sharing
plans. Defined benefit plans provide pension benefits that are based on the
employee's final average salary for salaried employees and stated amounts for
each year of credited service for hourly employees.
It is the Company's policy to fund the ERISA minimum contribution
requirement. Plan assets are invested primarily in corporate equity securities,
fixed income bonds and insurance annuity contracts.
Contributions and costs for the Company's various other benefit plans are
generally determined based on the employee's annual salary. The Company also
provides supplemental retirement benefits for certain executives. Total expense
relating to the Company's retirement plans, including the defined contribution
and defined benefit pension plans, aggregated $7,577,000 in 1996, $8,153,000 in
1997, and $8,541,000 in 1998.
SUPPLEMENTAL AND OTHER POSTRETIREMENT BENEFITS
In addition to providing pension benefits, the Company provides certain
health care benefits to substantially all active employees and postretirement
health care benefits to certain salaried employees. In addition, certain hourly
and salary employees are eligible for postretirement medical coverage until age
65. The Company is primarily self-insured for such benefits.
F-60
<PAGE>
EXCEL INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
6. PENSION AND OTHER EMPLOYEE BENEFIT PLANS (CONTINUED)
The following provides a reconciliation of benefit obligations, plan assets
and funded status of the Company's pension and other postretirement benefit
plans (in thousands):
<TABLE>
<CAPTION>
OTHER
POSTRETIREMENT
PENSION BENEFITS BENEFITS
--------------------- ----------------------
<S> <C> <C> <C> <C>
1997 1998 1997 1998
--------- ---------- ---------- ----------
CHANGE IN BENEFIT OBLIGATION
Benefit obligation at beginning of year......................... $ 43,613 $ 46,320 $ 12,656 $ 11,285
Acquired company................................................ -- 11,607 -- --
Service cost.................................................... 2,687 3,221 1,060 952
Interest cost................................................... 3,207 3,779 913 922
Plan amendments................................................. 215 -- (1,804) --
Actuarial (gain) loss........................................... 320 2,802 (698) 2,476
Curtailments.................................................... (254) -- -- --
Benefits paid................................................... (3,468) (2,648) (842) (943)
--------- ---------- ---------- ----------
Benefit obligation at end of year............................... 46,320 65,081 11,285 14,692
--------- ---------- ---------- ----------
CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of year.................. 34,451 40,117 -- --
Acquired company................................................ -- 2,614 -- --
Actual return on plan assets.................................... 6,139 4,943 -- --
Company contributions........................................... 2,995 3,367 842 943
Benefits paid................................................... (3,468) (2,648) (842) (943)
--------- ---------- ---------- ----------
Fair value of plan assets at end of year........................ 40,117 48,393 -- --
--------- ---------- ---------- ----------
Funded status................................................... (6,203) (16,688) (11,285) (14,692)
Unrecognized actuarial (gain) loss.............................. 36 1,124 (4,524) (1,847)
Unrecognized prior service cost................................. 187 170 (2,556) (2,452)
Unrecognized transition obligation.............................. (52) (41) -- --
--------- ---------- ---------- ----------
Net amount recognized........................................... $ (6,032) $ (15,435) $ (18,365) $ (18,991)
--------- ---------- ---------- ----------
--------- ---------- ---------- ----------
Amounts recognized in the balance sheet consist of:
Accrued benefit liability..................................... $ (6,260) $ (16,907) $ (18,365) $ (18,991)
Intangible asset.............................................. 228 475 -- --
Accumulated other comprehensive income........................ -- 997 -- --
--------- ---------- ---------- ----------
Net amount recognized........................................... $ (6,032) $ (15,435) $ (18,365) $ (18,991)
--------- ---------- ---------- ----------
--------- ---------- ---------- ----------
Weighted-average assumptions as of year end:
Discount rate................................................... 7.5% 5.5%-7.0% 7.5% 7.0%
Expected return on plan assets.................................. 8.0% 8.0% N/A N/A
Rate of compensation increase................................... 5.0% 2.5%-4.0% N/A N/A
</TABLE>
The weighted average assumed health care cost trend rate used in measuring
the accumulated postretirement benefit obligation was 8.3% in 1997 and 7.7% in
1998, declining by .5% per year to a weighted average rate of 6.3%.
F-61
<PAGE>
EXCEL INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
6. PENSION AND OTHER EMPLOYEE BENEFIT PLANS (CONTINUED)
The projected benefit obligation, accumulated benefit obligation, and fair
value of plan assets for the pension plans with accumulated benefit obligations
in excess of plan assets were $14,200,000, $14,151,000, and $12,117,000 at 1997
and $39,659,000, $37,479,000, and $24,927,000 at 1998 respectively.
The projected benefit obligation for pension plans outside of the U.S. are
$11,728,000 at January 2, 1999.
Components of net pension expense for qualified defined benefit pension
plans are as follows (in thousands):
<TABLE>
<CAPTION>
YEAR ENDED
-------------------------------
<S> <C> <C> <C>
1996 1997 1998
--------- --------- ---------
Service cost..................................................... $ 2,470 $ 2,687 $ 3,221
Interest cost.................................................... 2,711 3,207 3,779
Expected return on plan assets................................... (2,248) (2,770) (3,086)
Net amortization of deferrals.................................... 53 48 28
--------- --------- ---------
Net periodic benefit cost........................................ $ 2,986 $ 3,172 $ 3,942
--------- --------- ---------
--------- --------- ---------
</TABLE>
The components of net periodic postretirement benefit cost are as follows
(in thousands):
<TABLE>
<CAPTION>
YEAR ENDED
-------------------------------
<S> <C> <C> <C>
1996 1997 1998
--------- --------- ---------
Service cost..................................................... $ 868 $ 1,060 $ 952
Interest cost.................................................... 780 913 922
Amortization of prior service cost............................... (57) (56) (174)
Recognized actuarial gain........................................ (143) (147) (131)
--------- --------- ---------
Net periodic benefit cost........................................ $ 1,448 $ 1,770 $ 1,569
--------- --------- ---------
--------- --------- ---------
</TABLE>
Assumed health care cost trend rates have a significant effect on the
amounts reported for the other postretirement benefit plans. A
one-percentage-point change in assumed health care cost trend rates would have
the following effects (in thousands):
<TABLE>
<CAPTION>
1-PERCENTAGE
POINT 1-PERCENTAGE
INCREASE POINT DECREASE
------------- --------------
<S> <C> <C>
Effect on total of service and interest cost................... $ 348 $ (283)
Effect on postretirement benefit obligation.................... 2,306 (1,920)
</TABLE>
F-62
<PAGE>
EXCEL INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
7. LONG-TERM DEBT
Following is a summary of long-term debt of the Company (in thousands):
<TABLE>
<CAPTION>
1997 1998
---------- ----------
<S> <C> <C>
7.78% Senior notes.................................................... $ 100,000 $ 100,000
German bank loans..................................................... -- 51,261
Other................................................................. 8,615 15,774
---------- ----------
108,615 167,035
Current maturities.................................................... (2,672) (17,156)
---------- ----------
$ 105,943 $ 149,879
---------- ----------
---------- ----------
</TABLE>
The Senior notes are due April 30, 2011. Interest only is payable in
quarterly installments until 2000 at which time annual payments will commence
ranging from $3.9 million to $12.2 million. The debt agreements contain certain
restrictive covenants which, among other things, require that the Company
maintain certain financial ratios at specified levels, restrict the amount of
additional borrowings and limit the amount of dividends that can be paid.
The German bank loans consist of various loans that are payable periodically
through 2008 with interest rates ranging from 4% to 9%.
The other debt consists primarily of loans from previous Schade
shareholders, mortgages and equipment loans with interest rates ranging from
5.5% to 10.1%. Certain plant and equipment purchased with the proceeds of the
debt collateralize these obligations.
The Company had available unused unsecured lines of credit of approximately
$56,000,000 at January 2, 1999 under terms of an agreement executed in April,
1996. Funds are available under this agreement through April, 2000 at an
interest rate equal to the London Interbank rate plus 75 basis points.
Long-term debt maturities are $17,156,000 in 1999, $17,081,000 in 2000,
$11,904,000 in 2001, $11,020,000 in 2002, $21,243,000 in 2003 and $88,631,000
thereafter.
8. LEASES
The Company leases certain of its manufacturing facilities, sales offices,
transportation and other equipment. Total rental expense was approximately
$4,471,000 in 1996, $5,037,000 in 1997 and $4,505,000 in 1998. Future minimum
lease payments under noncancellable operating leases are $3,691,000 in 1999,
$2,811,000 in 2000, $2,180,000 in 2001, $1,638,000 in 2002, $1,188,000 in 2003
and $713,000 thereafter.
F-63
<PAGE>
EXCEL INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
9. INCOME TAXES
Pre-tax income reported by U.S. and foreign subsidiaries was as follows (in
thousands):
<TABLE>
<CAPTION>
YEAR ENDED
-------------------------------
<S> <C> <C> <C>
1996 1997 1998
--------- --------- ---------
United States................................................ $ 31,531 $ 29,070 $ 16,715
Foreign...................................................... (865) (2,048) 5,237
--------- --------- ---------
$ 30,666 $ 27,022 $ 21,952
--------- --------- ---------
--------- --------- ---------
</TABLE>
The provision (benefit) for income taxes is summarized below (in thousands):
<TABLE>
<CAPTION>
YEAR ENDED
-------------------------------
<S> <C> <C> <C>
1996 1997 1998
--------- --------- ---------
Current:
U.S. federal.................................................. $ 11,070 $ 5,187 $ 236
Foreign....................................................... -- -- 1,479
State......................................................... 2,093 1,178 1,078
--------- --------- ---------
13,163 6,365 2,793
--------- --------- ---------
Deferred:
U.S. federal.................................................. (1,720) 3,022 (96)
Foreign....................................................... -- -- 1,124
State......................................................... 107 71 (189)
--------- --------- ---------
(1,613) 3,093 839
--------- --------- ---------
$ 11,550 $ 9,458 $ 3,632
--------- --------- ---------
--------- --------- ---------
</TABLE>
Deferred income taxes are provided for the temporary differences between the
financial reporting basis and tax basis of the Company's assets and liabilities.
Current deferred income tax assets of $11,076,000 and $10,608,000 are classified
as prepaid expenses at December 27, 1997 and January 2, 1999, respectively.
Long-term deferred income tax liabilities of $2,051,000 and $4,510,000 are
classified as other long-term liabilities at December 27, 1997 and January 2,
1999 respectively.
F-64
<PAGE>
EXCEL INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
9. INCOME TAXES (CONTINUED)
Deferred income taxes are comprised of the following at December 27, 1997
and January 2, 1999 (in thousands):
<TABLE>
<CAPTION>
1997 1998
--------- ---------
<S> <C> <C>
Gross deferred tax liabilities
Property, plant and equipment......................................... $ 16,457 $ 19,427
Other................................................................. 607 590
--------- ---------
17,064 20,017
--------- ---------
Gross deferred tax assets
Pension and postretirement benefit obligations........................ 14,036 16,486
Other accrued liabilities............................................. 11,898 9,629
Inventories........................................................... 155 --
Tax credit and net operating loss carryforwards....................... 1,355 1,162
--------- ---------
27,444 27,277
Valuation allowance..................................................... (1,355) (1,162)
--------- ---------
Net deferred tax assets................................................. $ 9,025 $ 6,098
--------- ---------
--------- ---------
</TABLE>
At December 27, 1997 and January 2, 1999 the Company maintained a valuation
allowance for foreign tax credit and foreign net operating loss carryforwards,
which expire in 1999-2004. Based upon past operating results, the Company
estimates that it is more likely than not that these carryforwards cannot be
utilized before they expire. The Company does not provide U.S. income taxes on
earnings of foreign subsidiaries ($3.2 million) since it is intended that these
earnings be indefinitely reinvested.
Provision for taxes on income in 1998 includes the benefit of tax credits
related to prior years. In 1998, the Company completed a review of qualified
research and development expenditures for the years 1994-1997 and recorded tax
credits totaling $4 million. The provision for income taxes computed by applying
the Federal statutory rate to income before income taxes is reconciled to the
recorded provision as follows (in thousands):
<TABLE>
<CAPTION>
YEAR ENDED
-------------------------------
<S> <C> <C> <C>
1996 1997 1998
--------- --------- ---------
Tax at United States statutory rate............................. $ 10,733 $ 9,458 $ 7,683
State income taxes, net of federal benefit...................... 1,430 812 578
Research and development tax credits............................ (80) (187) (5,472)
Foreign income taxed at rates different than U.S................ 303 (186) 770
Foreign Sales Corporation....................................... (494) (682) (684)
Non-taxable interest income (340) (382) (235)
Amortization of goodwill........................................ 346 479 561
Other........................................................... (348) 146 431
--------- --------- ---------
$ 11,550 $ 9,458 $ 3,632
--------- --------- ---------
--------- --------- ---------
</TABLE>
F-65
<PAGE>
EXCEL INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
10. COMMON SHARES
In 1997, the Company reserved 500,000 common shares for the Excel
Industries, Inc. 1997 Long-Term Incentive Plan (LTIP). Under the LTIP,
performance shares awarded to key executives of the Company are earned based on
the attainment of one or more pre-established performance goals over a specified
performance period. Through January 2, 1999, 135,000 performance shares had been
awarded.
The Company has 473,550 common shares reserved for issuance to officers,
other key employees and non-employee directors for the 1994 Stock Compensation
Plan (the Plan). The Plan provides that options may be granted at not less than
fair market value and are exercisable for ten years from the date of grant.
Generally, the options become exercisable at the rate of 25% per year commencing
one year from the date of grant.
The following table sets forth stock option activity.
<TABLE>
<CAPTION>
YEAR ENDED
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1996 1997 1998
---------------------- ---------------------- ----------------------
<CAPTION>
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
OPTIONS PRICE OPTIONS PRICE OPTIONS PRICE
--------- ----------- --------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Stock options outstanding at beginning of year........... 263,750 $ 12.23 250,900 $ 12.45 352,250 $ 14.73
Options granted.......................................... 15,000 12.25 127,000 19.19 9,000 17.17
Options exercised........................................ (12,200) 7.54 (9,400) 12.38 (13,100) 12.38
Options canceled......................................... (15,650) 12.38 (16,250) 15.73 (26,250) 16.53
--------- ----------- --------- ----------- --------- -----------
Stock options outstanding at end of year................. 250,900 $ 12.45 352,250 $ 14.73 321,900 $ 14.75
--------- ----------- --------- ----------- --------- -----------
--------- ----------- --------- ----------- --------- -----------
Options exerciseable at year end......................... 57,300 $ 12.56 110,000 $ 12.51 177,275 $ 13.48
--------- ----------- --------- ----------- --------- -----------
--------- ----------- --------- ----------- --------- -----------
</TABLE>
<TABLE>
<CAPTION>
EXERCISE PRICE RANGE
--------------------------
<S> <C> <C> <C>
$12.25-$13.81 $16.13-$21.38 TOTAL
------------ ------------ ----------
Options outstanding.................................. 210,900 111,000 321,900
Weighted average exercise price...................... $12.40 $19.21 $14.75
Remaining contractual life........................... 6.2 years 8.2 years 6.9 years
Options exercisable.................................. 147,525 29,750 177,275
Weighted average exercise price...................... $12.37 $18.98 $13.48
</TABLE>
The Company has adopted the disclosure only provisions of SFAS No. 123,
"Accounting for Stock Based Compensation." Accordingly, the element of
compensation cost applicable to the granting of stock options has not been
recognized for financial statement purposes. Had compensation cost for the
options granted been recognized for financial statement purposes using the
Black-Scholes option
F-66
<PAGE>
EXCEL INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
10. COMMON SHARES (CONTINUED)
pricing model, the Company's net earnings and basic earnings per share would
have been reduced to the pro-forma amounts indicated below (in thousands except
per share amounts):
<TABLE>
<CAPTION>
YEAR ENDED
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1996 1997 1998
---------------------- ---------------------- ----------------------
<CAPTION>
REPORTED PRO-FORMA REPORTED PRO-FORMA REPORTED PRO-FORMA
--------- ----------- --------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net earnings..................... $ 19,116 $ 18,882 $ 17,564 $ 17,191 $ 16,953 $ 16,523
Per share........................ 1.79 1.77 1.59 1.55 1.37 1.34
</TABLE>
The fair value of the option grant is estimated on the date of grant with
the following assumptions:
<TABLE>
<CAPTION>
1996 1997 1998
--------- --------- ---------
<S> <C> <C> <C>
Dividend yield................................................. 3.2% 2.8% 2.86%
Expected volatility............................................ 33% 31% 33%
Risk-free interest rate 6.5% 5.75% 4.5%
Expected life.................................................. 5 years 5 years 5 years
</TABLE>
The Company has an employee stock purchase plan and has reserved 251,659
common shares for this purpose. The plan allows eligible employees to authorize
payroll withholdings which are used to purchase common shares from the Company
at ninety percent (90%) of the closing price of the common shares on the date of
purchase. Through January 2, 1999, 198,341 shares had been issued under the
plan.
The Company has outstanding warrants for the purchase of 381,000 common
shares at a price of $13.25. These warrants were issued in connection with the
acquisition of Anderson Industries and if not exercised, expire April 2001.
The Company has a shareholder rights plan to protect shareholders against
unsolicited attempts to acquire control of the Company that do not offer what
the Company believes to be an adequate price to all shareholders. The rights
were issued to shareholders of record on January 22, 1996 and will expire on
January 22, 2006. The plan provides for the issuance of one right for each
outstanding share of the Company's Common Stock. The rights will become
exercisable only if a person or group acquires or announces a tender offer to
acquire 20% or more of the Company's outstanding voting stock. Each right
entitles the holder to buy one one-hundredth share of a newly authorized series
of preferred stock from the Company. Also, after such acquisition all rights
holders except the acquirer will be entitled to purchase common shares at
one-half of the then current market price of the common shares. Any activity
regarding this plan would have a dilutive effect on earnings per share
calculations.
11. SEGMENT INFORMATION AND MAJOR CUSTOMERS
The Company adopted SFAS No 131, "Disclosures About Segments of an
Enterprise and Related Information," in 1998 and restated prior year disclosures
for certain minor differences. The Company's operating segments are aggregated
for reporting purposes into two reportable segments based on similarities of the
nature of products and production processes, the types of customers, the method
of distribution of products, and economic characteristics.
F-67
<PAGE>
EXCEL INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
11. SEGMENT INFORMATION AND MAJOR CUSTOMERS (CONTINUED)
The light vehicle products segment designs, manufactures and sells products
for passenger cars and pick-up trucks for OEMs and Tier I suppliers. Products
include plastic and metal framed window and door assemblies, manual and power
window regulator systems, manual seat systems, decorative trims and injection
molded plastic parts. Principal markets are in North America, Europe, and
Mexico.
The recreational vehicles, mass transit and heavy truck products segment
(RV/MT/HT) manufactures and sells products for recreational vehicles, mass
transit and heavy trucks. Products include appliances such as water heaters,
furnaces, stoves and ranges, hardware such as jacks and couplers, seating frames
and seat adjusters, preassembled doors and windows for motor homes and window
assembles for mass transit systems and heavy trucks. Principal markets are in
the United States. Segment information is summarized in the following tables
with years prior to 1998 restated (in thousands):
<TABLE>
<CAPTION>
LIGHT
VEHICLE RV/MT/HT
PRODUCTS PRODUCTS CORPORATE TOTAL
------------ ----------- ----------- ------------
<S> <C> <C> <C> <C>
DECEMBER 28, 1996
Sales.................................... $ 730,255 $ 157,486 $ -- $ 887,741
Operating income (expense)............... 34,140 13,337 (8,763) 38,714
Assets................................... 301,197 87,643 54,394 443,234
Capital expenditures..................... 23,816 3,768 1,625 29,209
Depreciation and amortization expense.... 20,626 4,283 1,337 26,246
DECEMBER 27, 1997
Sales.................................... $ 759,569 $ 202,764 $ -- $ 962,333
Operating income (expense)............... 28,546 15,392 (7,862) 36,076
Assets................................... 319,284 84,156 54,357 457,797
Capital expenditures..................... 32,932 5,916 439 39,287
Depreciation and amortization expense.... 24,348 7,481 1,553 33,382
JANUARY 2, 1999
Sales.................................... $ 885,383 $ 220,720 $ -- $ 1,106,103
Operating income (expense)............... 18,051 19,737 (6,282) 31,506
Assets................................... 484,126 81,198 29,060 594,384
Capital expenditures..................... 40,824 4,779 355 45,958
Depreciation and amortization expense.... 31,725 6,905 1,049 39,679
</TABLE>
F-68
<PAGE>
EXCEL INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
11. SEGMENT INFORMATION AND MAJOR CUSTOMERS (CONTINUED)
The following table presents revenues by country (in thousands):
<TABLE>
<CAPTION>
1996 1997 1998
---------- ---------- ------------
<S> <C> <C> <C>
United States.......................................... $ 742,047 $ 788,952 $ 786,672
Canada................................................. 106,640 134,801 125,376
Germany................................................ -- -- 111,180
Mexico................................................. 29,863 24,062 23,411
Other.................................................. 9,191 14,518 59,464
---------- ---------- ------------
$ 887,741 $ 962,333 $ 1,106,103
---------- ---------- ------------
---------- ---------- ------------
</TABLE>
The following table presents long-lived assets by country (in thousands):
<TABLE>
<CAPTION>
1996 1997 1998
---------- ---------- ----------
<S> <C> <C> <C>
United States............................................ $ 201,253 $ 209,012 $ 216,230
Germany.................................................. -- -- 39,539
Other.................................................... 3,031 2,924 35,234
---------- ---------- ----------
$ 204,284 $ 211,936 $ 291,003
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
Sales to three major customers, Ford Motor Company, DaimlerChrysler, and
General Motors Corporation, were approximately 47%, 12% and 6%, respectively, of
the Company's net sales in 1996 as compared to 41%, 11% and 7% in 1997 and 36%,
9% and 5% in 1998.
Accounts receivable from Ford Motor Company, DaimlerChrysler, and General
Motors Corporation approximated 60% of trade accounts receivable at December 27,
1997 and 46% at January 2, 1999.
12. CONTINGENCIES
A chemical cleaning compound, trichloroethylene (TCE), was found in the soil
and groundwater on the Company's property in Elkhart, Indiana, and in 1981 TCE
was found in a well field of the City of Elkhart in close proximity to the
Company's facility. On June 9, 1998, the United States District Court for the
Northern District of Indiana accepted a consent decree specifying a payment of
Federal Past Response Costs. Together with amounts due the Indiana Department of
Environmental Management, the Company paid approximately $3.4 million in 1998 to
complete its obligation for the remedial clean-up.
The Company has been named a potentially responsible party for costs at six
disposal sites. The remedial investigations and feasibility studies have been
completed, and the results of those studies have been provided to the
appropriate agencies. The studies indicated a range of viable remedial
approaches, but agreement has not yet been reached with the authorities on the
final remediation approach. Furthermore, the PRPs for these sites have not
reached an agreement on the allocation of costs between the PRPs. The Company
believes it either has no liability as a responsible party or that adequate
provisions have been recorded for current estimates of the Company's liability
and estimated legal costs associated with the settlement of these claims. It is
reasonably possible that the Company's recorded estimate of its obligation may
change in the near term.
F-69
<PAGE>
EXCEL INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
12. CONTINGENCIES (CONTINUED)
There are claims and pending legal proceedings against the Company and its
subsidiaries with respect to taxes, workers' compensation, warranties and other
matters arising out of the ordinary conduct of the business. The ultimate result
of these claims and proceedings at January 2, 1999 is not determinable, but, in
the opinion of management, adequate provision for anticipated costs has been
made or insurance coverage exists to cover such costs.
13. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The following table sets forth in summary form the quarterly results of
operations for the fiscal years ended December 27, 1997 and January 2, 1999 (in
thousands, except per share amounts):
<TABLE>
<CAPTION>
1997
----------------------------------------------
<S> <C> <C> <C> <C>
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
---------- ---------- ---------- ----------
Net sales.................................... $ 251,216 $ 264,474 $ 213,548 $ 233,095
Gross profit................................. 30,998 37,099 21,659 25,587
Net income................................... 6,302 9,067 297 1,898
Net income per share:
Basic...................................... $ .59 $ .85 $ .03 $ .16
Diluted.................................... .53 .75 .03 .16
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
<TABLE>
<CAPTION>
1998
----------------------------------------------
<S> <C> <C> <C> <C>
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
---------- ---------- ---------- ----------
Net sales.................................... $ 230,994 $ 247,237 $ 280,231 $ 347,641
Gross profit................................. 27,580 28,650 20,648 33,243
Net income................................... 5,379 5,756 1,589 4,229
Net income per share:
Basic...................................... $ .43 $ .46 $ .13 $ .35
Diluted.................................... .43 .46 .13 .35
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
14. SUBSEQUENT EVENT
On March 23, 1999, all of the Company's outstanding stock was acquired by
Dura Automotive Systems, Inc. (Dura). In the aggregate, the stockholders of
Excel received consideration of approximately $155.5 million in cash and
approximately 5.1 million shares of Dura's Class A common stock. Upon completion
of this transaction, the Company became a wholly owned subsidiary of Dura.
Dura is a leading designer and manufacturer of driver control systems,
engineered mechanisms and cable-related systems for the global automotive
industry. Their products include parking brake systems, automotive cables,
transmission shifter systems, latches, underbody tire carriers, jacks, brake,
clutch and accelerator pedals and other mechanical assemblies. Their products
are sold to major North American OEMs, including Ford, General Motors and
DaimlerChrysler, as well as Japanese OEMs including Toyota and Honda. Dura's
European and Latin American facilities support Ford, GM, Volkswagen, Mercedes,
BMW, PSA (Peugeot and Citroen) and various other OEMs. Dura's operating
headquarters are in Rochester Hills, MI, and its corporate office is in
Minneapolis, MN.
F-70
<PAGE>
EXCEL INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
15. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION (CONTINUED)
The following consolidating financial information presents balance sheet,
statement of income and cash flow information related to the Company's
businesses. Upon completion of the transaction described in Note 14, each
Guarantor became a direct or indirect wholly owned subsidiary of Dura and fully
and unconditionally guaranteed Dura's 9% senior subordinated notes, on a joint
and several basis. Separate financial statements and other disclosures
concerning the Guarantors have not been presented because management believes
that such information is not material.
EXCEL INDUSTRIES, INC.
CONSOLIDATING STATEMENTS OF INCOME FOR THE YEAR ENDED DECEMBER 28, 1996
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
NON-
GUARANTOR GUARANTOR
COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
----------- ----------- ------------- ------------
<S> <C> <C> <C> <C>
Net sales.................................................... $ 878,037 $ 9,807 $ (103) $ 887,741
Cost of goods sold........................................... 773,972 9,506 (103) 783,375
----------- ----------- ----- ------------
Gross profit............................................... 104,065 301 -- 104,366
Selling, administrative and engineering expenses............. 64,440 1,212 -- 65,652
----------- ----------- ----- ------------
Operating income (loss).................................... 39,625 (911) -- 38,714
Interest expense............................................. 9,785 47 (48) 9,784
Other income, net............................................ (1,691) (93) 48 (1,736)
----------- ----------- ----- ------------
Income (loss) before taxes and minority interest........... 31,531 (865) -- 30,666
Provision for income taxes................................... 11,550 -- -- 11,550
----------- ----------- ----- ------------
Net income (loss).......................................... $ 19,981 $ (865) $ -- $ 19,116
----------- ----------- ----- ------------
----------- ----------- ----- ------------
</TABLE>
F-71
<PAGE>
EXCEL INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
15. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION (CONTINUED)
EXCEL INDUSTRIES, INC.
CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 28, 1996
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
NON-
GUARANTOR GUARANTOR
COMPANIES COMPANIES CONSOLIDATED
----------- ----------- ------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss)........................................................ $ 19,981 $ (865) $ 19,116
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization.......................................... 25,731 515 26,246
Deferred income taxes.................................................. (1,613) -- (1,613)
Other.................................................................. 348 -- 348
Changes in other operating items....................................... 24,594 1,158 25,752
----------- ----------- ------------
Net cash provided by operating activities............................ 69,041 808 69,849
----------- ----------- ------------
Cash flows from investing activities:
Purchase of property, plant and equipment................................ (28,744) (465) (29,209)
Businesses acquired...................................................... (58,984) -- (58,984)
Sale of investments, net................................................. 8,290 -- 8,290
Other.................................................................... 389 540 929
----------- ----------- ------------
Net cash provided by (used for) investing activities................. (79,049) 75 (78,974)
----------- ----------- ------------
Cash flows from financing activities:
Issuance of common shares................................................ 278 -- 278
Payments of long-term debt............................................... (79,934) -- (79,934)
Dividends................................................................ (4,875) -- (4,875)
Purchase of treasury shares.............................................. (155) -- (155)
Issuance of other long-term debt......................................... 100,000 -- 100,000
----------- ----------- ------------
Net cash provided by financing activities............................ 15,314 -- 15,314
----------- ----------- ------------
Net change in cash and short-term investments.............................. 5,306 883 6,189
Cash and short-term investments at beginning of period..................... 39 352 391
----------- ----------- ------------
Cash and short-term investments at end of period........................... $ 5,345 $ 1,235 $ 6,580
----------- ----------- ------------
----------- ----------- ------------
</TABLE>
F-72
<PAGE>
EXCEL INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
15. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION (CONTINUED)
EXCEL INDUSTRIES, INC.
CONSOLIDATING BALANCE SHEETS AS OF DECEMBER 27, 1997
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
NON-
GUARANTOR GUARANTOR
COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and short-term investments............................ $ 590 $ 1,727 $ -- $ 2,317
Marketable securities...................................... 24,420 -- -- 24,420
Accounts receivable--trade................................. 140,380 530 -- 140,910
Customer tooling to be billed.............................. 22,176 180 -- 22,356
Inventories................................................ 40,116 813 -- 40,929
Prepaid expenses........................................... 14,927 2 -- 14,929
----------- ----------- ------------ ------------
Total current assets..................................... 242,609 3,252 -- 245,861
Property, plant & equipment, net............................. 158,044 2,924 -- 160,968
Goodwill, net................................................ 35,960 -- -- 35,960
Other assets................................................. 23,035 -- (8,027) 15,008
----------- ----------- ------------ ------------
$ 459,648 $ 6,176 $ (8,027) $ 457,797
----------- ----------- ------------ ------------
----------- ----------- ------------ ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable........................................... $ 85,160 $ 309 $ -- $ 85,469
Accrued liabilities:
Salaries and wages....................................... 9,249 -- -- 9,249
Employee benefits........................................ 11,136 -- -- 11,136
Other.................................................... 20,032 753 -- 20,785
Current maturities of long-term debt....................... 2,672 -- -- 2,672
----------- ----------- ------------ ------------
Total current liabilities................................ 128,249 1,062 -- 129,311
Long-term debt............................................... 105,943 -- -- 105,943
Long-term employee benefits.................................. 32,934 -- -- 32,934
Other long-term liabilities.................................. 4,294 1,617 (1,617) 4,294
Shareholders' equity......................................... 188,228 3,497 (6,410) 185,315
----------- ----------- ------------ ------------
$ 459,648 $ 6,176 $ (8,027) $ 457,797
----------- ----------- ------------ ------------
----------- ----------- ------------ ------------
</TABLE>
F-73
<PAGE>
EXCEL INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
15. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION (CONTINUED)
EXCEL INDUSTRIES, INC.
CONSOLIDATING STATEMENTS OF INCOME FOR THE YEAR ENDED DECEMBER 27, 1997
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
NON-
GUARANTOR GUARANTOR
COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
----------- ----------- ------------- ------------
<S> <C> <C> <C> <C>
Net sales.................................................... $ 951,611 $ 10,906 $ (184) $ 962,333
Cost of goods sold........................................... 836,634 10,540 (184) 846,990
----------- ----------- ----- ------------
Gross profit............................................... 114,977 366 -- 115,343
Selling, administrative and engineering expenses............. 76,910 2,357 -- 79,267
----------- ----------- ----- ------------
Operating income (loss).................................... 38,067 (1,991) -- 36,076
Interest expense............................................. 10,984 20 (20) 10,984
Other (income) expense, net.................................. (1,987) 37 20 (1,930)
----------- ----------- ----- ------------
Income (loss) before taxes and minority interest........... 29,070 (2,048) -- 27,022
Provision for income taxes................................... 9,458 -- -- 9,458
----------- ----------- ----- ------------
Net income (loss).......................................... $ 19,612 $ (2,048) $ -- $ 17,564
----------- ----------- ----- ------------
----------- ----------- ----- ------------
</TABLE>
F-74
<PAGE>
EXCEL INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
15. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION (CONTINUED)
EXCEL INDUSTRIES, INC.
CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 27, 1997
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
NON-
GUARANTOR GUARANTOR
COMPANIES COMPANIES CONSOLIDATED
----------- ----------- ------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss)........................................................ $ 19,612 $ (2,048) $ 17,564
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization.......................................... 32,822 560 33,382
Deferred income taxes.................................................. 3,093 -- 3,093
Other.................................................................. 2,080 13 2,093
Due (to)/from affiliates............................................... 1,710 (1,710) --
Changes in other operating items....................................... (19,157) 3,502 (15,655)
----------- ----------- ------------
Net cash provided by operating activities............................ 40,160 317 40,477
----------- ----------- ------------
Cash flows from investing activities:
Purchase of property, plant and equipment................................ (39,008) (279) (39,287)
Businesses acquired...................................................... (2,415) -- (2,415)
Purchase of investments, net............................................. (2,471) -- (2,471)
Proceeds from disposal of business....................................... 6,793 -- 6,793
Other.................................................................... (255) 454 199
----------- ----------- ------------
Net cash provided by (used for) investing activities................. (37,356) 175 (37,181)
----------- ----------- ------------
Cash flows from financing activities:
Issuance of common shares................................................ 543 -- 543
Payments of long-term debt............................................... (2,470) -- (2,470)
Dividends................................................................ (5,632) -- (5,632)
----------- ----------- ------------
Net cash used for financing activities............................... (7,559) -- (7,559)
----------- ----------- ------------
Net change in cash and short-term investments.............................. (4,755) 492 (4,263)
Cash and short-term investments at beginning of period..................... 5,345 1,235 6,580
----------- ----------- ------------
Cash and short-term investments at end of period........................... $ 590 $ 1,727 $ 2,317
----------- ----------- ------------
----------- ----------- ------------
</TABLE>
F-75
<PAGE>
EXCEL INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
15. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION (CONTINUED)
EXCEL INDUSTRIES, INC.
CONSOLIDATING BALANCE SHEETS AS OF JANUARY 2, 1999
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
NON-
GUARANTOR GUARANTOR
COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and short-term investments............................ $ 295 $ 15,995 $ -- $ 16,290
Marketable securities...................................... 14,000 -- -- 14,000
Accounts receivable--trade................................. 127,110 40,290 -- 167,400
Customer tooling to be billed.............................. 21,646 9,003 -- 30,649
Inventories................................................ 39,869 19,533 -- 59,402
Prepaid expenses........................................... 15,089 551 -- 15,640
----------- ----------- ------------ ------------
Total current assets..................................... 218,009 85,372 -- 303,381
Property, plant & equipment, net............................. 162,374 70,295 -- 232,669
Goodwill, net................................................ 41,865 -- -- 41,865
Other assets................................................. 47,594 4,478 (35,603) 16,469
----------- ----------- ------------ ------------
$ 469,842 $ 160,145 $ (35,603) $ 594,384
----------- ----------- ------------ ------------
----------- ----------- ------------ ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable........................................... $ 85,188 $ 21,864 $ -- $ 107,052
Accrued liabilities:
Salaries and wages....................................... 16,875 -- -- 16,875
Employee benefits........................................ 14,464 -- -- 14,464
Other.................................................... 9,765 15,674 -- 25,439
Income taxes payable....................................... 1,461 2,138 -- 3,599
Current maturities of long-term debt....................... 2,001 15,155 -- 17,156
----------- ----------- ------------ ------------
Total current liabilities................................ 129,754 54,831 -- 184,585
Long-term debt............................................... 103,928 45,951 -- 149,879
Long-term employee benefits.................................. 44,469 -- -- 44,469
Other long-term liabilities.................................. (695) 20,359 (10,579) 9,085
Minority interest............................................ -- 12,108 -- 12,108
Shareholders' equity......................................... 192,386 26,896 (25,024) 194,258
----------- ----------- ------------ ------------
$ 469,842 $ 160,145 $ (35,603) $ 594,384
----------- ----------- ------------ ------------
----------- ----------- ------------ ------------
</TABLE>
F-76
<PAGE>
EXCEL INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
15. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION (CONTINUED)
EXCEL INDUSTRIES, INC.
CONSOLIDATING STATEMENTS OF INCOME FOR THE YEAR ENDED JANUARY 2, 1999
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
NON-
GUARANTOR GUARANTOR
COMPANIES COMPANIES CONSOLIDATED
----------- ----------- ------------
<S> <C> <C> <C>
Net sales.................................................................. $ 936,940 $ 169,163 $1,106,103
Cost of goods sold......................................................... 844,573 151,409 995,982
----------- ----------- ------------
Gross profit............................................................. 92,367 17,754 110,121
Selling, administrative and engineering expenses........................... 69,272 9,343 78,615
----------- ----------- ------------
Operating income......................................................... 23,095 8,411 31,506
Interest expense........................................................... 11,628 -- 11,628
Other (income) expense, net................................................ (3,772) 1,698 (2,074)
----------- ----------- ------------
Income before taxes and minority interest................................ 15,239 6,713 21,952
Provision for income taxes................................................. 1,029 2,603 3,632
Minority interest.......................................................... -- 1,367 1,367
----------- ----------- ------------
Net income............................................................... $ 14,210 $ 2,743 $ 16,953
----------- ----------- ------------
----------- ----------- ------------
</TABLE>
F-77
<PAGE>
EXCEL INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
15. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION (CONTINUED)
EXCEL INDUSTRIES, INC.
CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED JANUARY 2, 1999
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
NON-
GUARANTOR GUARANTOR
COMPANIES COMPANIES CONSOLIDATED
----------- ----------- ------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income............................................................... $ 14,210 $ 2,743 $ 16,953
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization.......................................... 31,726 7,953 39,679
Deferred income taxes.................................................. (394) 1,176 782
Other.................................................................. (734) 2,855 2,121
Due (to)/from affiliates............................................... (986) 986 --
Changes in other operating items....................................... 19,185 (2,718) 16,467
----------- ----------- ------------
Net cash provided by operating activities............................ 63,007 12,995 76,002
----------- ----------- ------------
Cash flows from investing activities:
Purchase of property, plant and equipment................................ (37,040) (8,918) (45,958)
Businesses acquired...................................................... (608) (9,472) (10,080)
Sale of investments, net................................................. 10,420 -- 10,420
Disposal of business..................................................... (18,605) 18,605 --
Other.................................................................... (3,239) 4,932 1,693
----------- ----------- ------------
Net cash provided by (used for) investing activities................. (49,072) 5,147 (43,925)
----------- ----------- ------------
Cash flows from financing activities:
Issuance of common shares................................................ 916 -- 916
Payments of long-term debt............................................... (5,175) (10,730) (15,905)
Dividends................................................................ (6,165) -- (6,165)
Purchase of treasury shares.............................................. (3,806) -- (3,806)
Issuance of other long-term debt......................................... -- 3,359 3,359
Other.................................................................... -- 3,497 3,497
----------- ----------- ------------
Net cash used for financing activities............................... (14,230) (3,874) (18,104)
----------- ----------- ------------
Net change in cash and short-term investments.............................. (295) 14,268 13,973
Cash and short-term investments at beginning of period..................... 590 1,727 2,317
----------- ----------- ------------
Cash and short-term investments at end of period........................... $ 295 $ 15,995 $ 16,290
----------- ----------- ------------
----------- ----------- ------------
</TABLE>
F-78
<PAGE>
EXCEL INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
15. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION (CONTINUED)
EXCEL INDUSTRIES, INC.
CONSOLIDATING BALANCE SHEETS AS OF MARCH 28, 1998
(UNAUDITED)
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
NON-
GUARANTOR GUARANTOR
COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and short-term investments............................ $ 24,746 $ 809 $ -- $ 25,555
Accounts receivable--trade................................. 147,687 780 -- 148,467
Customer tooling to be billed.............................. 24,723 4 -- 24,727
Inventories................................................ 39,147 848 -- 39,995
Prepaid expenses........................................... 12,181 14 -- 12,195
----------- ----------- ------------ ------------
Total current assets..................................... 248,484 2,455 -- 250,939
Property, plant & equipment, net............................. 161,664 2,867 -- 164,531
Other assets................................................. 59,379 -- (7,941) 51,438
----------- ----------- ------------ ------------
$ 469,527 $ 5,322 $ (7,941) $ 466,908
----------- ----------- ------------ ------------
----------- ----------- ------------ ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable........................................... $ 82,716 $ 304 $ -- $ 83,020
Accrued liabilities........................................ 43,759 409 -- 44,168
Income taxes payable....................................... 4,662 -- -- 4,662
Current maturities of long-term debt....................... 2,712 -- -- 2,712
----------- ----------- ------------ ------------
Total current liabilities................................ 133,849 713 -- 134,562
Long-term debt............................................... 105,317 -- -- 105,317
Other long-term liabilities.................................. 37,546 1,531 (1,531) 37,546
Shareholders' equity......................................... 192,815 3,078 (6,410) 189,483
----------- ----------- ------------ ------------
$ 469,527 $ 5,322 $ (7,941) $ 466,908
----------- ----------- ------------ ------------
----------- ----------- ------------ ------------
</TABLE>
F-79
<PAGE>
EXCEL INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
15. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION (CONTINUED)
EXCEL INDUSTRIES, INC.
CONSOLIDATING STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED MARCH 28, 1998
(UNAUDITED)
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
NON-
GUARANTOR GUARANTOR
COMPANIES COMPANIES CONSOLIDATED
----------- ----------- ------------
<S> <C> <C> <C>
Net sales.................................................................. $ 230,583 $ 411 $ 230,994
Cost of goods sold......................................................... 202,714 700 203,414
----------- ----- ------------
Gross profit (loss)...................................................... 27,869 (289) 27,580
Selling, administrative and engineering expenses........................... 17,110 126 17,236
----------- ----- ------------
Operating income (loss).................................................. 10,759 (415) 10,344
Other expense, net......................................................... 2,190 4 2,194
----------- ----- ------------
Income (loss) before taxes and minority interest......................... 8,569 (419) 8,150
Provision for income taxes................................................. 2,771 -- 2,771
----------- ----- ------------
Net income (loss)........................................................ $ 5,798 $ (419) $ 5,379
----------- ----- ------------
----------- ----- ------------
</TABLE>
F-80
<PAGE>
EXCEL INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
15. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION (CONTINUED)
EXCEL INDUSTRIES, INC.
CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 28, 1998
(UNAUDITED)
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
NON-
GUARANTOR GUARANTOR
COMPANIES COMPANIES CONSOLIDATED
----------- ----------- ------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss)........................................................ $ 5,798 $ (419) $ 5,379
Adjustments to reconcile net income to net cash provided by (used for)
operating activities:
Depreciation and amortization.......................................... 7,735 113 7,848
Deferred income taxes.................................................. 2,246 -- 2,246
Other.................................................................. 206 8 214
Due (to)/from affiliates............................................... 86 (86) --
Changes in other operating items....................................... (575) (470) (1,045)
----------- ----------- ------------
Net cash provided by (used for) operating activities................. 15,496 (854) 14,642
----------- ----------- ------------
Cash flows from investing activities:
Purchase of property, plant and equipment................................ (11,226) (64) (11,290)
Other.................................................................... (2,737) -- (2,737)
----------- ----------- ------------
Net cash used for investing activities............................... (13,963) (64) (14,027)
----------- ----------- ------------
Cash flows from financing activities:
Issuance of common shares................................................ 344 -- 344
Payments of long-term debt............................................... (586) -- (586)
Dividends................................................................ (1,555) -- (1,555)
----------- ----------- ------------
Net cash used for financing activities............................... (1,797) -- (1,797)
----------- ----------- ------------
Net change in cash and short-term investments.............................. (264) (918) (1,182)
Cash and short-term investments at beginning of period..................... 25,010 1,727 26,737
----------- ----------- ------------
Cash and short-term investments at end of period........................... $ 24,746 $ 809 $ 25,555
----------- ----------- ------------
----------- ----------- ------------
</TABLE>
F-81
<PAGE>
INDEPENDENT AUDITORS' REPORT
TO THE BOARD OF DIRECTORS OF ADWEST AUTOMOTIVE PLC
We have audited the accompanying consolidated balance sheets of Adwest
Automotive Plc and its subsidiaries at 30 June 1998 and 1997, and the related
consolidated profit and loss accounts, statements of movements in shareholders'
equity and consolidated cash flow statements for each of the years in the three
year period ended 30 June 1998. These consolidated financial statements are the
responsibility of the management of Adwest Automotive Plc. Our responsibility is
to express an opinion on these consolidated financial statements based on our
audit.
We conducted our audits in accordance with auditing standards generally
accepted in the United Kingdom, which are substantially consistent with those of
the United States of America. 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 audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Adwest
Automotive Plc and its subsidiaries at 30 June 1998 and 1997, and the results of
their operations and their cash flows for each of the years in the three year
period ended 30 June 1998, in conformity with generally accepted accounting
principles in the United Kingdom.
Accounting principles generally accepted in the United Kingdom vary in
certain significant respects from accounting principles generally accepted in
the United States of America. Application of accounting principles generally
accepted in the United States would have affected net profit for the two years
ended 30 June 1998 and shareholders' equity at 30 June 1998 and 1997, to the
extent summarised in Note 31 to the consolidated financial statements.
<TABLE>
<S> <C>
London, England KPMG Audit Plc
7 September 1998 Chartered Accountants
Registered Auditor
</TABLE>
F-82
<PAGE>
ADWEST AUTOMOTIVE PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 JUNE
<TABLE>
<CAPTION>
NOTES 1998 L000 1997 L000 1996 L000
----- --------- --------- ---------
<S> <C> <C> <C> <C>
TURNOVER.................................................................
Continuing operations.................................................. 149,166 150,842 127,345
Acquisitions........................................................... 73,024 -- --
--------- --------- ---------
TOTAL CONTINUING OPERATIONS.............................................. 222,190 150,842 127,345
Discontinued operations................................................ 24,680 40,570 96,305
Discontinued acquisitions.............................................. 2,983 -- --
--------- --------- ---------
2 249,853 191,412 223,650
--------- --------- ---------
OPERATING PROFIT
Continuing operations.................................................. 13,586 14,602 10,221
Acquisitions........................................................... 4,937 -- --
--------- --------- ---------
TOTAL CONTINUING OPERATIONS.............................................. 18,523 14,602 10,221
Discontinued operations................................................ 2,959 3,411 4,729
Discontinued acquisitions.............................................. (124) -- --
--------- --------- ---------
2 21,358 18,013 14,950
EXCEPTIONAL ITEMS........................................................ 3
Continuing operations.................................................. -- -- (3,130)
Discontinued operations................................................ -- -- (1,835)
--------- --------- ---------
OPERATING PROFIT AFTER EXCEPTIONAL ITEMS................................. 4 21,358 18,013 9,985
Associated undertakings................................................ 21 21 86
Profit less losses on disposal of interests in associates.............. -- -- 53
Profit/(losses) and provision for losses on disposal of subsidiaries... 4,051 (791) (9,096)
Goodwill written off on disposal of subsidiaries....................... (17,552) -- (20,173)
6 (13,501) (791) (29,269)
--------- --------- ---------
PROFIT/(LOSS) ON ORDINARY ACTIVITIES BEFORE INTEREST..................... 7,878 17,243 (19,145)
Net interest charge...................................................... 7 (5,199) (2,892) (3,852)
--------- --------- ---------
PROFIT/(LOSS) ON ORDINARY ACTIVITIES BEFORE TAXATION..................... 2,679 14,351 (22,997)
Taxation credit (charge)................................................. 8 (4,529) (4,527) 2,082
--------- --------- ---------
(LOSS)/PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION...................... (1,850) 9,824 (25,079)
Minority interests--equity............................................... (505) (400) (263)
--------- --------- ---------
(LOSS)/PROFIT FOR THE FINANCIAL YEAR..................................... (2,355) 9,424 (25,342)
Dividends................................................................ 9 (6,442) (6,428) (6,400)
--------- --------- ---------
RETAINED PROFIT/(LOSS)................................................... 24 (8,797) 2,996 (31,742)
--------- --------- ---------
--------- --------- ---------
EARNINGS PER SHARE
(Loss)/earnings per share................................................ 10 (2.8)p 11.4p (30.7)p
</TABLE>
F-83
<PAGE>
ADWEST AUTOMOTIVE PLC
CONSOLIDATED BALANCE SHEET
AT 30 JUNE
<TABLE>
<CAPTION>
NOTES 1998 L000 1997 L000
--------- --------- ---------
<S> <C> <C> <C>
FIXED ASSETS
Tangible assets................................................................... 12 61,545 37,336
Investments....................................................................... 14 755 805
--------- ---------
62,300 38,141
--------- ---------
CURRENT ASSETS
Stock and work in progress........................................................ 15 18,969 15,387
Debtors (see note below).......................................................... 16 59,646 45,840
Bank and cash balances............................................................ 19,732 22,272
--------- ---------
98,347 83,499
--------- ---------
CREDITORS: DUE WITHIN ONE YEAR
Bank loans and overdrafts......................................................... 19 9,885 821
Creditors......................................................................... 17 72,159 43,266
Proposed final dividend........................................................... 4,545 4,536
--------- ---------
86,589 48,623
--------- ---------
NET CURRENT ASSETS................................................................ 11,758 34,876
--------- ---------
TOTAL ASSETS LESS CURRENT LIABILITIES............................................. 74,058 73,017
CREDITORS: DUE AFTER MORE THAN ONE YEAR:
Borrowings........................................................................ 18 54,319 33,061
Others............................................................................ 18 8,375 6,320
--------- ---------
62,694 39,381
PROVISIONS FOR LIABILITIES AND CHARGES............................................ 21 (74) 1,533
--------- ---------
NET ASSETS........................................................................ 2 11,438 32,103
--------- ---------
--------- ---------
CAPITAL AND RESERVES
Called up share capital........................................................... 23 20,794 20,746
Share premium account............................................................. 23 486 355
Revaluation reserve............................................................... 24 761 876
Special reserve................................................................... 25 20,561 20,561
Profit and loss account........................................................... 24 38,885 47,235
--------- ---------
EQUITY SHAREHOLDERS' FUNDS BEFORE GOODWILL........................................ 81,487 89,773
Goodwill on acquisition........................................................... 26 73,241 60,322
--------- ---------
SHAREHOLDERS' FUNDS--EQUITY....................................................... 8,246 29,451
MINORITY EQUITY INTERESTS......................................................... 3,192 2,652
--------- ---------
11,438 32,103
--------- ---------
--------- ---------
</TABLE>
Debtors include amounts recoverable after more than one year of L8,655,000
(1997:L7,671,000).
F-84
<PAGE>
ADWEST AUTOMOTIVE PLC
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 JUNE
<TABLE>
<CAPTION>
1998 1997 1996
NOTES L000 L000 L000
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
NET CASH INFLOW FROM OPERATING ACTIVITIES................................ 28A 26,353 25,201 15,769
--------- --------- ---------
DIVIDENDS FROM ASSOCIATES................................................ 5 5 4
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest received........................................................ 427 400 538
Interest paid on loans................................................... (4,961) (3,235) (4,079)
Interest paid on finance leases.......................................... (434) (285) (329)
Dividends paid to minority interest...................................... -- -- (122)
--------- --------- ---------
Net cash outflow from returns on investments and servicing of finance.... (4,968) (3,120) (3,992)
--------- --------- ---------
TAXATION PAID............................................................ (5,762) (3,459) (4,679)
--------- --------- ---------
CAPITAL EXPENDITURE
Purchase of tangible fixed assets........................................ (18,554) (6,708) (9,830)
Disposal of fixed assets................................................. 1,817 792 811
--------- --------- ---------
Net cash outflow from capital expenditure................................ (16,737) (5,916) (9,019)
--------- --------- ---------
ACQUISITIONS AND DISPOSALS
Receipts from sale of subsidiaries and businesses........................ 28F 21,141 12,373 28,445
Overdrafts and cash balances transferred as part of sale of
subsidiaries........................................................... -- 1,191 (44)
Receipts from sale of interest in associated undertaking................. -- -- 1,221
Purchase of subsidiary undertakings...................................... 28G (35,172) (1,809) (34,282)
Cash acquired with subsidiary acquired................................... 28G 2,697 -- 508
Additional investment in associate....................................... (38) -- --
--------- --------- ---------
Net cash flow from acquisitions and disposals............................ (11,372) 11,755 (4,152)
--------- --------- ---------
EQUITY DIVIDENDS PAID.................................................... (6,440) (6,418) (6,398)
--------- --------- ---------
MANAGEMENT OF LIQUID RESOURCES
Cash withdrawn from/(paid into) short term deposits...................... 12,811 (12,811) --
Monies paid into escrow account.......................................... (1,822) -- --
--------- --------- ---------
Net cash flow from management of liquid resources........................ 10,989 (12,811) (12,467)
--------- --------- ---------
NET CASH FLOW BEFORE FINANCING........................................... (7,932) 5,237 (12,467)
--------- --------- ---------
FINANCING
Receipts from issue of ordinary share capital............................ 179 188 352
Additional capital contribution from minority interest................... -- -- 1,346
New loans................................................................ 34,813 -- --
Repayment of loans....................................................... (23,951) (9,853) (1,455)
Finance lease capital repayments......................................... (875) (344) (321)
Movement on loan with associated undertaking............................. -- -- 420
--------- --------- ---------
Net cash flow from financing............................................. 10,166 (10,009) 342
--------- --------- ---------
Increase/(decrease) in cash.............................................. 28B 2,234 (4,772) (12,125)
--------- --------- ---------
--------- --------- ---------
</TABLE>
F-85
<PAGE>
ADWEST AUTOMOTIVE PLC
CONSOLIDATED CASH FLOW STATEMENT (CONTINUED)
<TABLE>
<CAPTION>
1998 1997 1996
NOTES L000 L000 L000
--------- --------- --------- ---------
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT (NOTE 28D)
<S> <C> <C> <C> <C>
Increase/(decrease) in cash in the year.................................. 2,234 (4,772) (12,125)
Cash outflow from reduction in debt and lease financing.................. 24,826 10,369 1,732
Cash inflow from new loans............................................... (34,813) (172) --
Cash flow from (decrease)/increase in liquid resources................... (10,989) 12,811 --
--------- --------- ---------
Change in net debt resulting from cash flows............................. (18,742) 18,236 (10,393)
--------- --------- ---------
Finance leases sold with subsidiaries.................................... 435 -- --
Loans and finance leases acquired with subsidiaries...................... (15,297) -- (537)
New finance leases....................................................... (1,840) (4,641) (78)
Translation difference................................................... 1,266 2,607 --
--------- --------- ---------
Movement in net debt in the year......................................... (34,178) 16,202 (11,008)
Net debt at 1 July....................................................... (17,959) (34,161) (23,153)
--------- --------- ---------
Net debt at 30 June...................................................... (52,137) (17,959) (34,161)
--------- --------- ---------
--------- --------- ---------
</TABLE>
F-86
<PAGE>
ADWEST AUTOMOTIVE PLC
STATEMENT OF CONSOLIDATED RECOGNISED GAINS AND LOSSES
FOR THE YEAR ENDED 30 JUNE
<TABLE>
<CAPTION>
1998 1997 1996
L000 L000 L000
--------- --------- ---------
<S> <C> <C> <C>
(Loss)/profit for the financial year.............................................. (2,355) 9,424 (25,342)
Unrealised deficit on revaluation of properties................................... -- -- (50)
Currency translation differences on net investments............................... 332 (2,219) (462)
--------- --------- ---------
TOTAL RECOGNISED (LOSSES)/GAINS FOR THE FINANCIAL YEAR............................ (2,023) 7,205 (25,854)
--------- --------- ---------
--------- --------- ---------
</TABLE>
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
FOR THE YEAR ENDED 30 JUNE
<TABLE>
<CAPTION>
1998 1997 1996
L000 L000 L000
<S> <C> <C> <C>
(Loss)/profit for the financial year.............................................. (2,355) 9,424 (25,342)
Ordinary dividends................................................................ (6,442) (6,428) (6,400)
--------- --------- ---------
Retained (loss)/profit for the year............................................... (8,797) 2,996 (31,742)
Goodwill on disposal of subsidiaries included in the profit and loss account for
the year but previously written off............................................. 17,552 -- 20,173
Other recognised gains and losses................................................. 332 (2,219) (512)
New share capital issued.......................................................... 179 188 352
Goodwill in the year on acquisitions (see note 26)................................ (30,471) (1,329) (29,289)
--------- --------- ---------
Net reductions to shareholders' funds............................................. (21,205) (364) (41,018)
--------- --------- ---------
Shareholders' funds brought forward............................................... 29,451 29,815 70,833
--------- --------- ---------
Shareholders' funds carried forward............................................... 8,246 29,451 29,815
--------- --------- ---------
--------- --------- ---------
</TABLE>
F-87
<PAGE>
ADWEST AUTOMOTIVE PLC
NOTES TO THE ACCOUNTS
1 PRINCIPAL ACCOUNTING POLICIES
(a) The financial statements have been prepared under the historical cost
convention modified by the revaluation of certain properties, the Companies
Act 1985 and in accordance with applicable accounting standards.
(b) The consolidated accounts incorporate the accounts of the holding company
and its subsidiaries, together with the group's share of the results of its
associated undertakings.
Results of subsidiaries acquired are included from the effective date of
acquisition. Results of subsidiary and business disposals are included up to
the effective date of disposal.
(c) Premiums for goodwill and discounts on the acquisition of businesses,
subsidiary and associated undertakings are dealt with through reserves at
the time of purchase. The profit or loss on disposal of previously acquired
businesses reflects the attributable amount of premium or discount on
acquisition relating to that business.
(d) Depreciation and amortisation of fixed assets is on a straight line basis
calculated at the annual rates set out below which are estimated to write
off each asset over the term of its useful life to its residual value.
<TABLE>
<S> <C>
Freehold buildings.............. 2-2 1/2% Plant and equipment............... 10-15%
Long leasehold property........... 2 1/2% Vehicles............................. 25%
Short leasehold property.... over term of
lease
</TABLE>
(e) Deferred taxation is calculated using the liability method in respect of the
taxation effect of all timing differences to the extent that it is probable
that provisions will crystallise in the foreseeable future.
(f) Assets held under finance leases are capitalised as tangible fixed assets
and depreciated in line with group policy. The corresponding liability, net
of interest charges, is categorised under creditors due within one year and
after one year, as appropriate.
The interest element of the lease instalments is allocated over the life of
each lease so as to produce a constant periodic rate of charge.
(g) Operating leases are accounted for by charging the instalments as an expense
in the profit and loss account, on a straight line basis.
(h) Exchange rates
(i) Transactions denominated in foreign currencies are recorded at the rate
of exchange ruling at the date of the transaction. Balances denominated
in foreign currencies are translated into sterling at the exchange rate
ruling on the balance sheet date. Differences on exchange are dealt with
through the profit and loss account.
(ii) Exchange differences on translation of the net investment in overseas
subsidiaries and associated undertakings are taken to reserves. To the
extent that such net investment is matched by a corresponding currency
borrowing, the matching exchange difference is also taken to reserves.
(iii) Profits and losses of overseas subsidiaries are translated at average
rates of exchange during the year. The adjustment to financial year end
rates is taken to reserves.
(i) Research and development expenditure is charged to the profit and loss
account as incurred.
F-88
<PAGE>
ADWEST AUTOMOTIVE PLC
NOTES TO THE ACCOUNTS (CONTINUED)
1 PRINCIPAL ACCOUNTING POLICIES (CONTINUED)
(j) Estimated current pension scheme surpluses are spread over the expected
average working lifetime of current pension scheme members after deducting
the regular cost of providing pension benefits.
(k) Stock and work in progress
(i) Stock and work in progress is stated at the lower of cost, including
factory overheads, and net realisable value.
(ii) Any significant pre-production costs on new products which are not
pre-funded by the customer are carried forward in work in progress. These
costs are then written off on a unit of production basis over the life of
the contract with the customer.
2 SEGMENTAL ANALYSIS
Turnover of the group, operating profit and net assets are analysed as
follows:
<TABLE>
<CAPTION>
1998 1997 1996
L000 L000 L000
--------- --------- ---------
<S> <C> <C> <C>
CLASS OF BUSINESS
TURNOVER
Automotive:
UK............................................................................... 79,696 77,347 45,649
Rest of Europe................................................................... 134,384 65,315 70,871
USA.............................................................................. 8,110 8,180 10,825
--------- --------- ---------
Continuing operations............................................................ 222,190 150,842 127,345
Discontinued operations.......................................................... 27,663 40,570 96,305
--------- --------- ---------
249,853 191,412 223,650
--------- --------- ---------
--------- --------- ---------
OPERATING PROFIT
Automotive:
UK............................................................................... 7,281 6,637 3,827
Rest of Europe................................................................... 11,864 7,547 2,242
USA.............................................................................. (622) 418 1,022
--------- --------- ---------
Continuing operations............................................................ 18,523 14,602 7,091
Discontinued operations.......................................................... 2,835 3,411 2,894
--------- --------- ---------
21,358 18,013 9,985
--------- --------- ---------
--------- --------- ---------
NET ASSETS
Automotive continuing operations................................................. 62,545 35,028
Discontinued operations.......................................................... (501) 13,704
--------- ---------
62,044 48,732
--------- ---------
--------- ---------
</TABLE>
F-89
<PAGE>
ADWEST AUTOMOTIVE PLC
NOTES TO THE ACCOUNTS (CONTINUED)
2 SEGMENTAL ANALYSIS (CONTINUED)
<TABLE>
<CAPTION>
TURNOVER BY DESTINATION TURNOVER BY ORIGIN
------------------------------- -------------------------------
1998 1997 1996 1998 1997 1996
L000 L000 L000 L000 L000 L000
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
GEOGRAPHICAL SEGMENTS
United Kingdom.................................. 76,193 84,583 98,189 79,696 91,895 112,316
Rest of Europe.................................. 140,542 72,736 64,905 137,367 65,315 81,697
USA............................................. 29,627 31,167 39,003 32,790 34,202 29,637
Rest of the World............................... 3,491 2,926 21,553 -- -- --
--------- --------- --------- --------- --------- ---------
249,853 191,412 223,650 249,853 191,412 223,650
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
</TABLE>
<TABLE>
<CAPTION>
OPERATING PROFIT NET ASSETS
------------------------------- --------------------
1998 1997 1996 1998 1997
L000 L000 L000 L000 L000
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
GEOGRAPHICAL SEGMENTS
United Kingdom............................................. 7,281 7,397 5,348 26,708 24,570
Rest of Europe............................................. 11,740 7,547 2,242 28,964 9,209
USA........................................................ 2,337 3,069 2,395 6,372 14,953
Rest of the World.......................................... -- -- -- -- --
--------- --------- --------- --------- ---------
21,358 18,013 9,985 62,044 48,732
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
</TABLE>
<TABLE>
<CAPTION>
1998 1997
L000 L000
--------- ---------
<S> <C> <C>
RECONCILIATION OF CONSOLIDATED NET ASSETS
Net assets as shown above.................................................................... 62,044 48,732
Associated undertaking....................................................................... 114 81
Proposed dividend............................................................................ (4,545) (4,536)
Net borrowings............................................................................... (44,472) (11,610)
Net taxation payable and deferred taxation................................................... (1,703) (564)
--------- ---------
Net assets per consolidated balance sheet.................................................... 11,438 32,103
--------- ---------
--------- ---------
</TABLE>
3 EXCEPTIONAL ITEMS
<TABLE>
<CAPTION>
1998 1997 1996
L000 L000 L000
--------- --------- ---------
<S> <C> <C> <C>
ONGOING ACTIVITIES:
Reorganisation and redundancy costs within the Automotive Division including
reduction of French Productive capacity................................................ -- -- 3,130
DISCONTINUED AND TO BE DISCONTINUED ACTIVITIES
Reorganisation and redundancy cost re Power Systems Division............................. -- -- 607
Redundancy, disruption and related costs with US electronics following
cancellation of customer order......................................................... -- -- 1,228
--------- --------- ---------
-- -- 4,965
--------- --------- ---------
--------- --------- ---------
</TABLE>
F-90
<PAGE>
ADWEST AUTOMOTIVE PLC
NOTES TO THE ACCOUNTS (CONTINUED)
4 OPERATING PROFIT
Operating profit can be analysed as follows:
<TABLE>
<CAPTION>
1998 1997 1996
L000 L000 L000
<S> <C> <C> <C>
Turnover....................................................................... 249,853 191,412 223,650
Cost of sales.................................................................. (210,178) (156,799) 188,046
---------- ---------- ---------
Gross profit................................................................... 39,675 34,613 35,604
Distribution costs............................................................. (6,197) (4,404) (7,274)
Administration expenses........................................................ (12,120) (12,196) (18,345)
---------- ---------- ---------
Operating profit after exceptional items....................................... 21,358 18,013 9,985
---------- ---------- ---------
---------- ---------- ---------
</TABLE>
Included above in 1996 is cost of sales of L670,000 and administration costs of
L4,295,000 relating to exceptional items.
<TABLE>
<CAPTION>
1998 1997 1996
L000 L000 L000
--------- --------- ---------
<S> <C> <C> <C>
OPERATING PROFIT IS AFTER CREDITING
Rents receivable..................................................................... 378 127 2,437
Pension credit (note 5).............................................................. 1,200 1,050 876
Industrial development government grant.............................................. 36 68 80
AND AFTER CHARGING:
Hire of plant and machinery.......................................................... 269 125 560
Other operating leases............................................................... 428 220 1,937
Depreciation of fixed assets--owned.................................................. 9,193 7,481 8,691
Depreciation of fixed assets held under finance leases............................... 402 174 159
Auditors' remuneration--audit........................................................ 257 274 358
Auditors' remuneration--other........................................................ 79 142 438
Research and development............................................................. 4,283 3,988 4,140
--------- --------- ---------
--------- --------- ---------
</TABLE>
F-91
<PAGE>
ADWEST AUTOMOTIVE PLC
NOTES TO THE ACCOUNTS (CONTINUED)
5 EMPLOYEES OF THE GROUP AND PENSIONS COST
<TABLE>
<CAPTION>
1998 1997 1996
NUMBER NUMBER NUMBER
----------- ----------- -----------
<S> <C> <C> <C>
THE AVERAGE NUMBER OF PERSONS EMPLOYED BY THE GROUP WAS AS FOLLOWS:
Production.......................................................................... 3,270 2,290 3,219
Distribution........................................................................ 85 49 106
Administration...................................................................... 418 398 446
----------- ----------- -----------
3,773 2,737 3,771
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
<TABLE>
<CAPTION>
1998 1997 1996
L000 L000 L000
----------- ----------- -----------
<S> <C> <C> <C>
THE AGGREGATE PAYROLL COSTS OF THESE PERSONS WERE AS FOLLOWS:
Wages and salaries.................................................................. 55,506 40,207 53,413
Social security costs............................................................... 11,149 7,950 9,711
Pension costs....................................................................... 138 70 278
----------- ----------- -----------
66,793 48,227 63,402
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
The Adwest Group 1988 Pension and Assurance Plan is a defined benefit scheme for
employees of the company and its UK subsidiaries who qualify for membership. The
assets of the scheme are held in separate trustee administered funds. Other
small pension schemes exist in certain subsidiaries.
Pension costs are determined in accordance with the recommendations of
independent actuaries using the projected unit method, so as to spread the cost
of pensions over employees' working lives with the group. Actuarial valuations
are completed every three years, the most recent being at 6 April 1995. The
assumptions which have the most significant effect on the results of the
valuation are those relating to the rate of return on investments and the rates
of increase in salaries and pensions. It was assumed that the average investment
return would exceed by 2% per annum the average rate of salary increase and that
present and future pensions would increase at a rate of 4% per annum.
At 6 April 1995 the assets of the plan amounted to L36,646,000, with investments
taken at market value. At that date, the actuarial value of the assets was
sufficient to cover 128% of the benefits that had accrued to members, after
allowing for expected future increases in earnings and pensions. Accordingly,
the actuaries have indicated that no company contributions were required and
therefore the Trustees have not called for, and the group has not paid, any
contributions during the year. The actuaries are currently carrying out a
valuation of the Plan as at 6 April 1998.
Using the same assumptions as in previous years, the credit to profits for the
year in respect of pensions would have been L1,600,000. In the light of recent
changes to tax credits available to exempt funds and until the actuarial
valuation at 6 April 1998 is available, it has been decided based on actuarial
advice, to limit the effect of pensions on the profit and loss account for the
year to a credit of L1,200,000 (1997: L1,050,000, 1996: L876,000). This credit
represents the amortisation of surpluses over the expected average working
lifetime of the current membership less the regular cost of providing pension
benefits.
The consolidated balance sheet recognises a prepayment of L7,948,000 (1997:
L6,748,000) representing the excess of the amortisation of surpluses over the
accumulated regular cost of providing benefits.
F-92
<PAGE>
ADWEST AUTOMOTIVE PLC
NOTES TO THE ACCOUNTS (CONTINUED)
6 DISPOSALS
<TABLE>
<CAPTION>
1998 1997 1996
L000 L000 L000
--------- --------- ---------
<S> <C> <C> <C>
Discontinued:
Property Division.................................................................... (689) -- (1,574)
Automotive Division.................................................................. -- -- 15
UK Power Systems..................................................................... (558) (791) (5,742)
Profit on disposal of US Electronics before goodwill write off....................... 5,891 -- --
Loss on disposal of Heidemann Oberflachentechnik GmbH................................ (593) -- --
Cost of disposal..................................................................... -- -- (1,795)
--------- --- ---------
4,051 (791) (9,096)
Goodwill on disposal................................................................. (17,552) -- (20,173)
--------- --- ---------
(13,501) (791) (29,269)
--------- --- ---------
--------- --- ---------
</TABLE>
7 NET INTEREST CHARGE
<TABLE>
<CAPTION>
1998 1997 1996
L000 L000 L000
--------- --------- ---------
<S> <C> <C> <C>
Payable on bank loans and overdrafts repayable within five years...................... (4,250) (2,390) (1,991)
Payable on loans repayable after more than five years................................. (916) (852) (2,162)
Payable on finance leases............................................................. (434) (309) (329)
--------- --------- ---------
(5,600) (3,551) (4,482)
Bank and other interest receivable.................................................... 401 659 630
--------- --------- ---------
(5,199) (2,892) (3,852)
--------- --------- ---------
--------- --------- ---------
</TABLE>
8 TAXATION ON ORDINARY ACTIVITIES
<TABLE>
<CAPTION>
1998 1997 1996
L000 L000 L000
--------- --------- ---------
<S> <C> <C> <C>
TAXATION OF PROFITS ON ORDINARY ACTIVITIES IS MADE UP AS FOLLOWS:
UK corporation tax at 31% (1997:32.5%; 1996:33%)........................................ 2,901 1,258 1,906
Overseas taxation....................................................................... 1,994 2,112 1,320
Associated undertakings (including overseas taxation of L2,000 (1997: L8,000, 1996:
L12,000))............................................................................. 2 8 31
Deferred taxation (note 21)............................................................. (332) 1,133 (1,878)
Prior year adjustments.................................................................. (36) 16 (297)
ACT written off......................................................................... -- -- 1,000
--------- --------- ---------
4,529 4,527 2,082
--------- --------- ---------
--------- --------- ---------
</TABLE>
Total loss on disposals included in the Profit and Loss account, including
goodwill, is L13.5 million (1997 L791,000, 1996 L29.3 million) and the related
taxation charge is nil (1997 nil, 1996 nil).
F-93
<PAGE>
ADWEST AUTOMOTIVE PLC
NOTES TO THE ACCOUNTS (CONTINUED)
9 DIVIDENDS
<TABLE>
<CAPTION>
1998 1997 1996
L000 L000 L000
--------- --------- ---------
<S> <C> <C> <C>
Interim paid 2.3p per share.............................................................. 1,897 1,892 1,877
Final proposed 5.5p per share............................................................ 4,545 4,536 4,523
--------- --------- ---------
6,442 6,428 6,400
--------- --------- ---------
--------- --------- ---------
</TABLE>
Shareholders holding 468,009 (1997: 533,792, 1996: 554,678) shares at 30 June
1998 have waived their entitlement to dividends and have been paid no dividends
during the year.
10 EARNINGS PER SHARE
(Loss)/earning per share are based on losses of L2,355,000 (1997 earnings of
L9,424,000, 1996 losses of L25,342,000) and on 83,057,054 (1997: 82,863,578,
1996: 82,504,902) ordinary shares in issue in the year weighted on a time basis.
11 NOTE OF HISTORICAL COST PROFITS/(LOSSES)
<TABLE>
<CAPTION>
1998 1997 1996
L000 L000 L000
--------- --------- ---------
<S> <C> <C> <C>
Profit/(loss) on ordinary activities before taxation................................ 2,679 14,351 (22,997)
Realisation of property revaluation gains of prior years............................ -- 433 14,845
Difference between the historical cost depreciation charge and the actual
depreciation for the year calculated on the revalued amount....................... 100 75 21
--------- --------- ---------
Historical cost profit/(loss) on ordinary activities before taxation................ 2,779 14,859 (8,131)
--------- --------- ---------
Historical cost (loss)/profit retained after taxation, minority interest and
dividends......................................................................... (8,697) 3,504 (16,876)
--------- --------- ---------
--------- --------- ---------
</TABLE>
F-94
<PAGE>
ADWEST AUTOMOTIVE PLC
NOTES TO THE ACCOUNTS (CONTINUED)
12 FIXED ASSETS: TANGIBLE ASSETS
<TABLE>
<CAPTION>
ASSETS IN
LAND AND PLANT VEHICLES COURSE
BUILDINGS AND EQUIPMENT OF CONSTRUCTION TOTAL
L000 L000 L000 L000
----------- --------------- --------------- ---------
<S> <C> <C> <C> <C>
COST OR VALUATION
At 1 July 1997............................................. 11,155 62,758 2,763 76,676
Exchange rate adjustments.................................. (966) (2,462) -- (3,428)
Additions.................................................. 2,353 17,639 -- 19,992
Disposals.................................................. (2,192) (7,334) -- (9,526)
Transfers between categories............................... 3,255 (492) (2,763) --
Acquisition of subsidiaries................................ 12,267 35,277 -- 47,544
Disposal of fixed assets with subsidiaries sold............ (1,206) (6,162) -- (7,368)
----------- ------ ------ ---------
At 30 June 1998............................................ 24,666 99,224 -- 123,890
----------- ------ ------ ---------
DEPRECIATION
At 1 July 1997............................................. 2,403 36,937 -- 39,340
Exchange rate adjustments.................................. (146) (1,816) -- (1,962)
Disposals.................................................. (692) (5,936) -- (6,628)
Transfer between categories................................ 158 (158) -- --
Acquisition of subsidiaries................................ 1,406 24,738 -- 26,144
Disposal of subsidiaries................................... (945) (3,199) -- (4,144)
Charge for the year........................................ 671 8,924 -- 9,595
----------- ------ ------ ---------
At 30 June 1998............................................ 2,855 59,490 -- 62,345
----------- ------ ------ ---------
NET BOOK VALUES AT 30 JUNE 1998............................ 21,811 39,734 -- 61,545
----------- ------ ------ ---------
Net book values at 30 June 1997............................ 8,752 25,821 2,763 37,336
----------- ------ ------ ---------
----------- ------ ------ ---------
</TABLE>
<TABLE>
<CAPTION>
INVESTMENT OTHER
PROPERTIES PROPERTIES TOTAL
L000 L000 L000
------------- ----------- ---------
<S> <C> <C> <C>
ANALYSIS OF LAND AND BUILDINGS
BY TENURE AT NET BOOK VALUE:
Freehold........................................................................ -- 19,103 19,103
Long lease...................................................................... 434 -- 434
Short lease..................................................................... 137 2,137 2,274
--- ----------- ---------
571 21,240 21,811
--- ----------- ---------
--- ----------- ---------
BY COST OR VALUATION:
Cost............................................................................ -- 23,014 23,014
Professional valuation--1989 to 1997............................................ -- 1,050 1,050
Directors' valuation--1998...................................................... 602 -- 602
--- ----------- ---------
602 24,064 24,666
--- ----------- ---------
--- ----------- ---------
</TABLE>
F-95
<PAGE>
ADWEST AUTOMOTIVE PLC
NOTES TO THE ACCOUNTS (CONTINUED)
12 FIXED ASSETS: TANGIBLE ASSETS (CONTINUED)
<TABLE>
<CAPTION>
1998 1997
L000 L000
--------- ---------
<S> <C> <C>
HISTORICAL COST OF LAND AND BUILDINGS:
Cost........................................................................................... 23,843 10,276
Depreciation................................................................................... 2,793 2,400
--------- ---------
21,050 7,876
--------- ---------
--------- ---------
</TABLE>
The net book value for the group included L6,578,000 (1997: L4,462,000) in
respect of land and buildings and assets in the course of construction and
L1,222,000 (1997: L551,000) in respect of plant, vehicles and equipment held
under finance leases. The depreciation included above in respect of these assets
is L402,000 (1997: L174,000).
The net book value of land and buildings includes amounts of L571,000 (1997:
L1,945,000) relating to investment properties and L1,110,000 (1997: L486,000)
relating to the value of land in other freehold property on which no
depreciation is charged.
<TABLE>
<CAPTION>
1998 1997 1996
L000 L000 L000
--------- --------- ---------
<S> <C> <C> <C>
CAPITAL COMMITMENTS:
Contracts placed......................................................................... 3,298 3,494 2,718
--------- --------- ---------
--------- --------- ---------
</TABLE>
13 SHARE OPTION TRUST
As at 30 June 1998, the total market value of own shares within the share
option trust was L62,000 below the original total cost. The directors do not
consider this diminution in value to be permanent and therefore no provision has
been made.
At 30 June 1998 the nominal value of own shares with the share option trust
was L114,392 (1997: L133,448).
14 INVESTMENTS
<TABLE>
<CAPTION>
1998 1997
L000 L000
----- -----
<S> <C> <C>
Investment in associated undertaking................................................................ 114 81
Investment in own shares............................................................................ 641 724
--- ---
755 805
--- ---
--- ---
</TABLE>
F-96
<PAGE>
ADWEST AUTOMOTIVE PLC
NOTES TO THE ACCOUNTS (CONTINUED)
14 INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
1998 1997
L000 L000
----- -----
<S> <C> <C>
THE GROUP'S INVESTMENTS IN ASSOCIATED UNDERTAKING IS AS FOLLOWS:
Investments in shares of associated undertaking at cost
Share of post acquisition retained profits.......................................................... 53 15
Share of net assets................................................................................. 61 66
--
---
114 81
--
--
---
---
</TABLE>
<TABLE>
<CAPTION>
UNLISTED SHARES
L000
-----------------
<S> <C>
At July 1997...................................................................................... 81
Exchange differences.............................................................................. (19)
Share of profit before taxation................................................................... 21
Share of taxation................................................................................. (2)
Dividends......................................................................................... (5)
Additional investments in year.................................................................... 38
---
At 30 June 1998................................................................................... 114
---
---
</TABLE>
The results included for the associate are for the year ended 31 March 1998, the
latest available audited accounts.
Details of associated undertakings are set out in note 30.
15 STOCK AND WORK IN PROGRESS
<TABLE>
<CAPTION>
1998 1997
L000 L000
--------- ---------
<S> <C> <C>
Raw materials.................................................................................. 7,756 5,866
Work in progress............................................................................... 8,709 6,142
Finished goods................................................................................. 2,504 3,379
--------- ---------
18,969 15,387
--------- ---------
--------- ---------
</TABLE>
16 DEBTORS
<TABLE>
<CAPTION>
1998 1997
L000 L000
--------- ---------
<S> <C> <C>
Trade debtors.................................................................................. 38,384 32,925
Other debtors.................................................................................. 7,738 2,843
Taxation recoverable........................................................................... 1,395 923
Prepayments and accrued income................................................................. 12,129 9,149
--------- ---------
59,646 45,840
--------- ---------
--------- ---------
</TABLE>
Included in group prepayments is a sum of L7,948,000 (1997: L6,748,000)
attributable to advanced pension contributions extending beyond one year (note
5).
F-97
<PAGE>
ADWEST AUTOMOTIVE PLC
NOTES TO THE ACCOUNTS (CONTINUED)
16 DEBTORS (CONTINUED)
Taxation recoverable in the group includes advanced corporation tax recoverable
after more than one year of L502,000 (1997: L923,000) which is expected to be
offset against mainstream corporation tax.
17 CREDITORS
<TABLE>
<CAPTION>
1998 1997
L000 L000
--------- ---------
<S> <C> <C>
Trade creditors................................................................................ 37,952 26,077
Finance lease obligations (note 20)............................................................ 891 643
Other creditors................................................................................ 11,505 1,702
PAYE and social security....................................................................... 4,553 3,543
Taxation payable............................................................................... 3,551 3,158
Accruals and deferred income................................................................... 13,707 8,143
--------- ---------
72,159 43,266
--------- ---------
--------- ---------
</TABLE>
Taxation payable in the Group includes advance corporation tax amounting to
L1,136,000 (1997: L1,132,000) attributable to the proposed final dividend.
18 CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
<TABLE>
<CAPTION>
1998 1997
L000 L000
--------- ---------
<S> <C> <C>
Borrowings (note 19)........................................................................... 54,319 33,061
Finance lease obligations (note 20)............................................................ 6,774 5,706
Retirement indemnity provision................................................................. 1,601 614
--------- ---------
62,694 39,381
--------- ---------
--------- ---------
</TABLE>
19 BORROWINGS
<TABLE>
<CAPTION>
1998 1997
L000 L000
--------- ---------
<S> <C> <C>
Bank overdrafts................................................................................ 6,842 298
Bank and other loans repayable within one year................................................. 3,043 523
--------- ---------
9,885 821
--------- ---------
Bank and other loans repayable:
Between one and two years.................................................................... 14,503 150
Between two and five years................................................................... 25,358 23,292
In five years or more........................................................................ 14,458 9,619
--------- ---------
54,319 33,061
--------- ---------
--------- ---------
</TABLE>
In 1998, loans repayable after one year represent:
/ / Loans from two financial institutions totalling US $40,000,000. These US
notes are repayable in six annual instalments commencing in March 2000 and
bear interest at a fixed rate of 8.6%.
F-98
<PAGE>
ADWEST AUTOMOTIVE PLC
NOTES TO THE ACCOUNTS (CONTINUED)
19 BORROWINGS (CONTINUED)
/ / A FF 85,000,000 loan from a UK bank, which is repayable in December 1999
and bears interest at a fixed rate of 4.99%.
/ / A DM 30,000.000 loan from a UK bank, which bears interest at a fixed rate
of 5.51%, and is repayable in five annual instalments commencing in October
1998.
/ / A DM 20,000,000 loan which bears interest at a fixed rate of 5.47%, and is
repayable in January 2003.
/ / A DM 20,000,000 loan which bears interest at a fixed rate of 5.84%, and is
repayable in twenty quarterly instalments commencing in March 2003.
Other bank borrowing bear interest at fluctuating rates, linked to the London
Inter-Bank Market rate.
There are no borrowings in the associated undertaking.
At 30 June 1998, the Group had forward contracts outstanding in Japanese Yen
amounting to the equivalent of L1,124,798 (1997: L1,415,000).
20 OBLIGATIONS UNDER FINANCE LEASES
<TABLE>
<CAPTION>
1998 1997
L000 L000
--------- ---------
<S> <C> <C>
THE FUTURE FINANCE LEASES PAYMENTS, TO WHICH THE GROUP WERE COMMITTED
AT 30 JUNE, WERE AS FOLLOWS:
Within one year.................................................................................. 891 643
Between one and five years....................................................................... 2,810 3,599
Over five years.................................................................................. 3,964 2,107
--------- ---------
7,665 6,349
--------- ---------
--------- ---------
</TABLE>
F-99
<PAGE>
ADWEST AUTOMOTIVE PLC
NOTES TO THE ACCOUNTS (CONTINUED)
21 PROVISIONS FOR LIABILITIES AND CHARGES
<TABLE>
<CAPTION>
PROVISION FOR LOSS ON
DISPOSAL OF REORGANISATION DEFERRED
SUBSIDIARIES PROVISION TAXATION TOTAL
L000 L000 L000 L000
--------------------- --------------- ----------- ---------
<S> <C> <C> <C> <C>
At 1 July 1997........................................... 400 2,804 (1,671) 1,533
Exchange rate adjustments................................ -- (26) (32) (58)
Acquisition of subsidiaries.............................. -- -- 17 17
Charge to profit and loss account........................ -- 279 (332) (53)
Provisions utilised...................................... (300) (1,895) -- (2,195)
Advance corporation tax and other movements.............. -- -- 867 867
Disposal of subsidiaries and business.................... -- (883) 698 (185)
--- ------ ----------- ---------
At 30 June 1998.......................................... 100 279 (453) (74)
--- ------ ----------- ---------
--- ------ ----------- ---------
</TABLE>
<TABLE>
<CAPTION>
AMOUNTS AMOUNTS
NOT PROVIDED FOR PROVIDED FOR
IN THESE ACCOUNTS IN THESE ACCOUNTS
-------------------- --------------------
1998 1997 1998 1997
L000 L000 L000 L000
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
BALANCES FOR THE PROVISION OF DEFERRED TAXATION ARE ANALYSED AS
FOLLOWS:
Accelerated capital allowances................................. -- -- (1,650) 2,097
Other timing differences....................................... 349 163 1,432 (1,247)
--------- --------- --------- ---------
349 163 (218) 850
Advanced corporation tax recoverable........................... -- -- (235) (2,521)
--------- --------- --------- ---------
349 163 (453) (1,671)
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
F-100
<PAGE>
ADWEST AUTOMOTIVE PLC
NOTES TO THE ACCOUNTS (CONTINUED)
22 LEASE OBLIGATIONS
<TABLE>
<CAPTION>
LAND AND BUILDINGS
OTHER
-------------------- ------------------------
1998 L000 1997 L000 1998 L000 1997 L000
--------- --------- ----- -----
<S> <C> <C> <C> <C>
OPERATING LEASE RENTALS PAYABLE WITHIN ONE YEAR RELATING TO
COMMITMENTS EXPIRING:
Within one year.............................................................. -- 77 271 121
Within two and five years.................................................... 97 384 443 475
After five years............................................................. 945 884 -- --
--------- --------- --- ---
1,042 1,345 714 596
--------- --------- --- ---
--------- --------- --- ---
</TABLE>
23 SHARE CAPITAL AND SHARE PREMIUM ACCOUNT
<TABLE>
<CAPTION>
CALLED UP AND FULLY
AUTHORISED PAID
-------------------- --------------------
1998 L000 1997 L000 1998 L000 1997 L000
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Ordinary shares of 25p each.......................................... 25,000 25,000 20,794 20,746
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
<TABLE>
<CAPTION>
NOMINAL VALUE SHARE PREMIUM
NUMBER L000 L000
------------ ------------- -----------------
<S> <C> <C> <C>
At 1 July 1997...................................................... 82,983,820 20,746 355
Shares issued under option schemes.................................. 190,088 48 131
------------ ------ ---
At 30 June 1998..................................................... 83,173,908 20,794 486
------------ ------ ---
------------ ------ ---
</TABLE>
24 RESERVES
<TABLE>
<CAPTION>
PROFIT AND LOSS
REVALUATION COMPANY AND PROFIT AND LOSS PROFIT AND
RESERVE SUBSIDIARIES ASSOCIATED LOSS TOTAL
L000 L000 UNDERTAKING L000 L000
------------- --------------- ----------------- -----------
<S> <C> <C> <C> <C>
At 1 July 1997........................................... 876 47,169 66 47,235
Retained (loss)/profit for the year...................... -- (8,811) 14 (8,797)
Exchange rate adjustments................................ (15) 366 (19) 347
Depreciation on revalued assets.......................... (100) 100 -- 100
--
--- ------ -----------
At 30 June 1998.......................................... 761 38,824 61 38,885
--
--
--- ------ -----------
--- ------ -----------
</TABLE>
25 SPECIAL RESERVE
The special reserve was created on 31 January 1996 when court permission was
obtained for the cancellation of the share premium account, which had a value at
that date of L20,561,000. The special reserve is non distributable.
F-101
<PAGE>
ADWEST AUTOMOTIVE PLC
NOTES TO THE ACCOUNTS (CONTINUED)
26 GOODWILL
<TABLE>
<CAPTION>
1998 L000 1997 L000 1996 L000
--------- --------- ---------
<S> <C> <C> <C>
At start of year................................................................... 60,322 58,993 49,877
Purchase of Conversion Devices Inc................................................. -- -- 3,498
Purchase of Rearsby Automotive Limited............................................. -- -- 25,539
Transferred to profit and loss account on disposal of subsidiaries................. (17,552) -- (20,173)
Additional goodwill re Conversion Devices Inc...................................... -- 734 --
Additional goodwill re Rearsby Automotive Limited.................................. -- 595 --
Purchase of Heidemann Verwatungsgesellschaft mit beschranker Haftung............... 29,318 -- --
Other adjustments.................................................................. 1,153 -- 252
--------- --------- ---------
At end of year..................................................................... 73,241 60,322 58,993
--------- --------- ---------
--------- --------- ---------
</TABLE>
27 DIRECTORS' EMOLUMENTS AND SHARE INTERESTS
<TABLE>
<CAPTION>
1998 L000 1997 L000 1996 L000
----- ----- -----
<S> <C> <C> <C>
TOTAL DIRECTORS' EMOLUMENTS:
Fees and benefits to non-executive directors................................................. 99 121 130
Remuneration (including pension contributions)............................................... 621 498 622
Performance related emoluments............................................................... 95 217 100
--- --- ---
815 836 852
--- --- ---
--- --- ---
</TABLE>
28 CONSOLIDATED CASH FLOW STATEMENT
<TABLE>
<CAPTION>
1998 L000 1997 L000 1996 L000
--------- --------- ---------
<S> <C> <C> <C>
(A) RECONCILIATION OF OPERATING PROFIT TO NET CASH FLOW FROM
OPERATING ACTIVITIES
Operating profit................................................................ 21,358 18,013 9,985
Depreciation.................................................................... 9,595 7,655 8,850
Loss/(profit) on disposal of fixed assets....................................... 247 (86) --
Acquisition provisions utilised................................................. -- -- (272)
(Increase)/decrease in stocks................................................... (3,688) 5,241 (2,093)
(Increase)/decrease in debtors.................................................. (3,726) (1,145) (2,102)
Increase/(decrease) in creditors................................................ 2,567 (4,477) 1,401
--------- --------- ---------
Net cash flow from operating activities......................................... 26,353 25,201 15,769
--------- --------- ---------
--------- --------- ---------
</TABLE>
F-102
<PAGE>
ADWEST AUTOMOTIVE PLC
NOTES TO THE ACCOUNTS (CONTINUED)
28 CONSOLIDATED CASH FLOW STATEMENT (CONTINUED)
<TABLE>
<CAPTION>
SHARE CAPITAL SHARE PREMIUM
CASH L000 L000 L000
--------- ------------- -----------------
<S> <C> <C> <C>
(B) ANALYSIS OF CHANGES IN CASH AND FINANCING DURING THE YEAR
At 1 July 1996........................................................... 12,073 20,695 218
Non-cash movements....................................................... 3,000 -- --
Exchange movements....................................................... (1,138) -- --
Net cash inflows......................................................... (4,772) 51 137
--------- ------ ---
Change in the year....................................................... (2,910) 51 137
--------- ------ ---
At 1 July 1997........................................................... 9,163 20,746 355
Exchange movements....................................................... (305) -- --
Net cash inflows......................................................... 2,234 48 131
--------- ------ ---
Change in the year....................................................... 1,929 48 131
--------- ------ ---
At 30 June 1998.......................................................... 11,092 20,794 486
--------- ------ ---
--------- ------ ---
</TABLE>
<TABLE>
<CAPTION>
1998 L000 1997 L000
--------- ---------
<S> <C> <C>
(C) ANALYSIS OF CASH
Cash at bank and in hand.................................................................... 17,934 9,461
Bank overdrafts............................................................................. (6,842) (298)
--------- ---------
11,092 9,163
--------- ---------
--------- ---------
</TABLE>
F-103
<PAGE>
ADWEST AUTOMOTIVE PLC
NOTES TO THE ACCOUNTS (CONTINUED)
28 CONSOLIDATED CASH FLOW STATEMENT (CONTINUED)
<TABLE>
<CAPTION>
ACQUISITION OTHER NON
AT 1 JULY (EXCL CASH & CASH DISPOSAL OF EXCHANGE
1996 CASH FLOW OVERDRAFTS) MOVEMENTS SUBSIDIARIES MOVEMENT
L000 L000 L000 L000 L000 L000
---------- ---------- ----------------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
(D) RECONCILIATION OF NET DEBT
Cash at bank and in hand...................... 13,515 (2,864) -- -- -- (1,190)
Bank overdrafts............................... (1,442) (1,908) -- 3,000 -- 52
----------
(4,772)
Borrowings due after one year................. (26,572) 263 -- (9,489) -- 2,737
Borrowings due within one year................ (16,741) 9,590 -- 6,489 -- 139
Finance leases................................ (2,921) 344 -- (4,641) -- 869
----------
10,197
Current asset investments..................... -- 12,811 -- -- -- --
--
---------- ---------- ----------- ----- -----------
(34,161) 18,236 -- (4,641) -- 2,607
--
--
---------- ---------- ----------- ----- -----------
---------- ---------- ----------- ----- -----------
<CAPTION>
AT 30 JUNE
1997
L000
-----------
<S> <C>
(D) RECONCILIATION OF NET DEBT
Cash at bank and in hand...................... 9,461
Bank overdrafts............................... (298)
Borrowings due after one year................. (33,061)
Borrowings due within one year................ (523)
Finance leases................................ (6,349)
Current asset investments..................... 12,811
-----------
(17,959)
-----------
-----------
</TABLE>
Current asset investments at 30 June 1997 represent cash balances on one month
and three months deposit.
<TABLE>
<CAPTION>
ACQUISITION
(EXCL CASH OTHER NON
AT 1 JULY & CASH DISPOSAL OF EXCHANGE
1997 CASH FLOW OVERDRAFTS) MOVEMENTS SUBSIDIARIES MOVEMENT
L000 L000 L000 L000 L000 L000
----------- ----------- ----------- ----------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Cash at bank and in hand.............. 9,461 8,897 -- -- -- (514)
Bank overdrafts....................... (298) (6,753) -- -- -- 209
-----------
2,234
Borrowings due after one year......... (33,061) (9,453) (13,152) 83 -- 1,264
Borrowings due within one year........ (523) (1,409) (1,129) (83) -- 101
Finance leases........................ (6,349) 875 (1,016) (1,840) 435 230
-----------
(9,987)
Current asset investments............. 12,811 (10,989) -- -- -- (24)
----------- ----------- ----------- ----------- --- -----------
(17,959) (18,742) (15,297) (1,840) 435 1,266
----------- ----------- ----------- ----------- --- -----------
----------- ----------- ----------- ----------- --- -----------
<CAPTION>
AT 30 JUNE
1998
L000
-----------
<S> <C>
Cash at bank and in hand.............. 17,934
Bank overdrafts....................... (6,842)
Borrowings due after one year......... (54,319)
Borrowings due within one year........ (3,043)
Finance leases........................ (7,665)
Current asset investments............. 1,798
-----------
(52,137)
-----------
-----------
</TABLE>
Current asset investments at 30 June 1998 represent part of the sale proceeds
from the sale of the US Electronics companies, which are being held in an escrow
account until May 2001.
F-104
<PAGE>
ADWEST AUTOMOTIVE PLC
NOTES TO THE ACCOUNTS (CONTINUED)
28 CONSOLIDATED CASH FLOW STATEMENT (CONTINUED)
(E) MAJOR NON-CASH TRANSACTIONS
During 1998 the Group entered into finance lease arrangements in respect of
assets with a total capital value at the inception of the leases of L1,840,000
(1997:L4,641,000).
<TABLE>
<CAPTION>
US ELECTRONICS
COMPANIES
L000
<S> <C>
(F) SALE OF SUBSIDIARY UNDERTAKINGS
Net assets sold excluding cash:
Fixed assets...................................................................................... 3,224
Stock............................................................................................. 8,157
Other working capital............................................................................. 3,741
------
Total net assets sold............................................................................. 15,122
Disposal costs paid out in cash................................................................... 1,937
Disposal costs accrued............................................................................ 128
Profit on sale.................................................................................... 5,891
------
23,078
------
------
SATISFIED BY:
Receipt of cash................................................................................... 21,256
Receipt of escrow monies.......................................................................... 1,822
------
Net inflow of cash................................................................................ 23,078
------
------
</TABLE>
The US Electronics subsidiaries sold during the year contributed L1,432,000 to
the group's net operating cash flows, paid L715,000 in respect of net returns on
investments and serving of finance, paid L731,000 in respect of taxation and
utilised L815,000 for capital expenditure.
F-105
<PAGE>
ADWEST AUTOMOTIVE PLC
NOTES TO THE ACCOUNTS (CONTINUED)
28 CONSOLIDATED CASH FLOW STATEMENT (CONTINUED)
<TABLE>
<CAPTION>
FAIR VALUE
ADJUSTMENTS
HEIDEMANN ACCOUNTING POLICY FAIR VALUE
COMPANIES REVALUATIONS ADJUSTMENTS OTHER ADJUSTMENTS BALANCE SHEET
L000 L000 L000 L000 L000
----------- ------------- ------------------- ------------------- -------------
<S> <C> <C> <C> <C> <C>
(G) PURCHASE OF SUBSIDIARY
UNDERTAKINGS
Provisional net assets acquired:
Fixed assets...................... 22,549 (1,149) -- -- 21,400
Stock............................. 9,122 -- (316) -- 8,806
Other working capital............. (11,716) -- -- -- (11,716)
Provisions........................ -- -- (101) (562) (663)
Net borrowings.................... (14,281) -- -- -- (14,281)
----------- ------ --- --- -------------
5,674 (1,149) (417) (562) 3,546
Provisional goodwill (note 26).... 29,318
-------------
32,864
-------------
-------------
SATISFIED BY:
Purchase consideration............ 31,127
Acquisition costs................. 3,217
Cash acquired..................... (2,733)
-------------
Net outflow of cash (i)........... 31,611
Purchase consideration accrued.... 1,253
-------------
32,864
-------------
-------------
</TABLE>
The net assets acquired above exclude 5% of the net assets of Adwest Heidemann
Iberica SA which are held by a third party.
Certain fixed assets have been written down in the revaluation column to reflect
their value based upon current earnings and cash generation. The accounting
policy adjustments are to bring stock, warranty and repairs and maintenance
provisions in line with UK GAAP requirements. Other adjustments represent
provisions in respect of potential environmental liabilities at the time of
acquisition.
F-106
<PAGE>
ADWEST AUTOMOTIVE PLC
NOTES TO THE ACCOUNTS (CONTINUED)
28 CONSOLIDATED CASH FLOW STATEMENT (CONTINUED)
<TABLE>
<CAPTION>
PURCHASE OF
SUBSIDIARY CASH ACQUIRED WITH
UNDERTAKINGS SUBSIDIARY ACQUIRED TOTAL
L000 L000 L000
------------ ------------------- ---------
<S> <C> <C> <C>
Net cash outflow of cash as above (i)................................ (34,344) 2,733 (31,611)
Minority interest in Adwest Heidemann Iberica SA cash................ -- (36) (36)
Deferred consideration re Electronics Division....................... (767) -- (767)
Other................................................................ (61) -- (61)
------------ ----- ---------
Per cash flow statement.............................................. (35,172) 2,697 (32,475)
------------ ----- ---------
------------ ----- ---------
</TABLE>
Heidemann Verwaltungsgesellschaft mit beschranker Haftung and its subsidiary
undertakings were acquired on 11 September 1997, and have been accounted for
using the acquisition method.
The subsidiary undertakings acquired during the year contributed L2,963,000 to
the group's net operating cash flows, paid L1,425,000 in respect of net returns
on investments and servicing of finance, received L372,000 in respect of
taxation and utilised L6,620,000 for capital expenditure.
In the year ended 31 January 1997, the latest available statutory accounts
before acquisition, the Heidemann group of companies had profit after tax of
L1,073,000 and minority interests of L281,000.
In the period 1 February 1997 to 11 September 1997 -- the date of acquisition by
Adwest, the unaudited results for the company showed the following.
<TABLE>
<CAPTION>
L000
<S> <C>
Turnover................................................................................................. 54,530
Operating profit......................................................................................... 2,788
Profit before taxation................................................................................... 1,954
Taxation charge.......................................................................................... 974
Minority interests....................................................................................... 97
---------
---------
</TABLE>
There were no material recognised gains or losses, other than the results for
the period shown above.
F-107
<PAGE>
ADWEST AUTOMOTIVE PLC
NOTES TO THE ACCOUNTS (CONTINUED)
29 PRINCIPAL SUBSIDIARY UNDERTAKINGS
<TABLE>
<S> <C> <C> <C>
Adwest Steering Ltd. Woodley Power steering gears, precision UK
plastic parts
Adwest Bowden TSK Ltd. Llanelli Control cables, gearshifters UK
Adwest Bowden France SA Cauvigny, Boynes Control cables, gearshifters, France
handbrakes, jacks
Adwest Dauphinoise Thomson SA Grenoble Engine thermostats, wax element France
regulators
Adwest OCI SA La Talaudiere Gearshifters France
Adwest Driver Systems Ltd. Rearsby Pedal boxes, gearshifters, UK
handbrakes, suspension links
Adwest Western Automotive Inc. Michigan Precision tubular components and USA
engine thermostats
Adwest Western Thomson Ltd. Woodley, Chard Engine thermostats, radiator UK
caps
Adwest Heidemann Einbeck GmbH Einbeck Gearshifters, steering columns, Germany
tubular structures
Adwest Heidemann Rotenburg Rotenburg Valve spring retainers, fine Germany
GmbH blanked parts, tubular
structures
Adwest Heidemann Iberica SA Valencia, Pamplona Gearshifters, steering columns Spain
Adwest Kohler GmbH Lippstadt Fuel caps, precision pressed Germany
parts
Adwest Heidemann do Brasil Curitiba Gearshifters Brazil
</TABLE>
The Company owns 100% of the ordinary share capital of all subsidiaries, with
the exception of Adwest Bowden TSK Ltd of which 35% of the ordinary share
capital is owned by Nippon Cable Systems Inc. (TSK), a Japanese company, and
Adwest Heidemann Iberica SA, of which 5% of the ordinary share capital is owned
by local management.
The subsidiaries operate principally in the country in which they are
incorporated.
A full list of subsidiaries will be included within the next annual return.
30 ASSOCIATED UNDERTAKING
<TABLE>
<CAPTION>
ISSUED SHARE CAPITAL ACTIVITIES HOLDING INCORPORATED
------------------------------ ------------------- ----------- ---------------
<S> <C> <C> <C> <C>
Western Thomson (India) Ltd. (1) 295,878 shares (10 rupees p.s) Engine thermostats 49% India
</TABLE>
- --------------------------
(1) Held by Adwest Western Thomson Ltd. and located in Madras, India.
31 SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN UNITED KINGDOM AND UNITED STATES
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
The Group's accounts are prepared in conformity with generally accepted
accounting principles applicable in the United Kingdom (UK GAAP), which differ
in certain significant respects from those applicable in the United States (US
GAAP). These differences, together with the approximate effects of the
adjustments on net profit and shareholders' funds, relate principally to the
items set out below:
F-108
<PAGE>
ADWEST AUTOMOTIVE PLC
NOTES TO THE ACCOUNTS (CONTINUED)
31 SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN UNITED KINGDOM AND UNITED STATES
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (CONTINUED)
GOODWILL AND OTHER INTANGIBLE ASSETS
Under UK GAAP goodwill arising on acquisition has been charged to reserves.
Under US GAAP goodwill is capitalised and amortised by charges against income
over the period, not to exceed 40 years, over which the benefit arises. For US
GAAP, goodwill has been amortised by the Group over 40 years.
Under UK GAAP the profit and loss on the disposal of all or part of a previously
acquired business has been calculated after taking account of the gross amount
of any goodwill previously charged to reserves. Under US GAAP an adjustment to
profit or loss on disposal is required in respect of goodwill previously
amortised.
CUMULATIVE EXCHANGE LOSS ON SALE OF FOREIGN SUBSIDIARIES
Under UK GAAP gains or loss arising on the sale or liquidation of a foreign
subsidiary does not include the related cumulative exchange gain or loss,
previously recorded as a separate component of shareholders' equity for that
investment. Under US GAAP, the gain or loss on sale or liquidation includes the
related cumulative exchange gain or loss.
DIVIDENDS
Under UK GAAP dividends proposed after the end of an accounting period in
respect of that accounting period are deducted in arriving at retained earnings
for that period. Under US GAAP such dividends are not deducted until declared.
DEFERRED TAXATION
Under UK GAAP provision is made for deferred taxation only to the extent that it
is probable that an actual liability or asset will crystallise in the
foreseeable future. US GAAP requires full provision for deferred income taxes
under the liability method on all temporary differences and, if required, a
valuation allowance is established to reduce gross deferred taxation assets to
the amount which is more likely than not to be realised.
Deferred taxation also arises in relation to the tax effect of other US GAAP
differences.
PENSION COSTS
Under UK GAAP, the cost of providing pensions is charged against profits on a
systematic basis, with pension surpluses and deficits being amortised over the
expected remaining service lives of current employees. Under US GAAP, costs and
surpluses are similarly spread over the expected remaining service lives but
based on prescribed actuarial assumptions, allocation of costs and valuation
methods, which differ in certain respects from those used for UK GAAP.
DEFERRED PROFIT ON SALE OF PROPERTY
In 1996, properties were disposed of which had previously been revalued under UK
GAAP. No profit arose on this transaction under UK GAAP. A profit arises under
US GAAP on the basis that US GAAP does not permit the revaluation of property.
Under US GAAP, the element of the profit in respect of property subsequently
leased back on an operating lease basis is amortised in equal instalments over
the life of the lease.
F-109
<PAGE>
ADWEST AUTOMOTIVE PLC
NOTES TO THE ACCOUNTS (CONTINUED)
31 SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN UNITED KINGDOM AND UNITED STATES
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (CONTINUED)
EMPLOYEE SHARE TRUST ARRANGEMENTS
Employee share trusts have been established in order to hedge obligations in
respect of options issued under certain employee share option schemes. Under UK
GAAP the Company's ordinary shares held by the employee share trusts are
included at cost in fixed asset investments. Dividends receivable on such shares
are included in the statement of income. Under US GAAP, such shares and
dividends receivable from those shares are treated as treasury stock and
included in shareholders' equity.
REVALUATION OF FIXED ASSETS
Under UK GAAP the Group has revalued certain fixed assets. This is not permitted
under US GAAP.
PRE-PRODUCTION COSTS
Under UK GAAP, certain significant pre-production costs on new products which
are not prefunded by the customer are carried forward in work in progress. These
costs are then written off on a unit of production basis over the life of the
contract with the customer. Under US GAAP these costs are generally expensed as
incurred.
CURRENT ASSETS AND LIABILITIES
Under UK GAAP current assets include amounts which fall due after more than one
year. Under US GAAP such assets would be reclassified as non-current assets.
Also under UK GAAP provisions for liabilities and charges include amounts due
within one year which would be reclassified to current liabilities under US
GAAP.
EARNINGS PER ORDINARY SHARE
Under UK GAAP earnings per share is based on profit for the financial year and
computed using the weighted average number of Ordinary Shares in issue during
the year. Under US GAAP basic earnings per share is based on net income and
computed using the weighted average number of Ordinary Shares in issue during
the year. US GAAP also requires the presentation of diluted earnings per share
which is based upon net income, as adjusted, computed using the weighted average
shares and the effect of other dilutive instruments.
CASH FLOWS
The principal difference between UK GAAP and US GAAP is in respect of
classification. Under UK GAAP, the Group presents its cash flows for operating
activities, returns on investments and servicing of finance, taxation, capital
expenditures and financial investments, acquisition and disposals, equity
dividends paid, management of liquid resources, and financing. US GAAP requires
only three categories of cash flow activities which are operating, investing and
financing.
Cash flows arising from taxation and returns on investments and servicing of
finance under UK GAAP would, with the exception of dividends paid, be included
as operating activities under US GAAP; dividend payments would be included as a
financing activity under US GAAP. In addition, capital expenditures and
financial investment, acquisition and disposals, and management of liquid
resources under UK GAAP would be presented as investing activities under US
GAAP.
F-110
<PAGE>
ADWEST AUTOMOTIVE PLC
NOTES TO THE ACCOUNTS (CONTINUED)
31 SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN UNITED KINGDOM AND UNITED STATES
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (CONTINUED)
UK GAAP defines cash as cash in hand and deposits repayable on demand. Short
term deposits which are readily convertible into known amounts of cash at, or
close to, their carrying value are classified as liquid resources. US GAAP
defines cash and cash equivalents as cash in hand and short term highly liquid
investments with original maturities of three months or less. Cash flows in
respect of short term deposits with original maturities exceeding three months
are included in investing activities under US GAAP and are included in capital
expenditure and financial investment under UK GAAP.
Under US GAAP, the following amounts would be reported:
<TABLE>
<CAPTION>
1998 1997
L'000 L'000
--------- ---------
<S> <C> <C>
Net cash provided by operating activities.................................................... 15,628 18,627
Net cash used in investing activities........................................................ (29,931) 5,839
Net cash provided by/(used in) financing activities.......................................... 10,479 (14,519)
Effect of changes in exchange rate........................................................... (514) (1,190)
--------- ---------
Net (decrease)/increase in cash and cash equivalents......................................... (4,338) 8,757
Cash and cash equivalents at beginning of year............................................... 22,272 13,515
--------- ---------
Cash and cash equivalents at end of year..................................................... 17,934 22,272
--------- ---------
--------- ---------
</TABLE>
Effect on (loss)/profit attributable to shareholders of differences between UK
and US GAAP
<TABLE>
<CAPTION>
1998 1997
L'000 L'000
--------- ---------
<S> <C> <C>
(Loss)/profit attributable to shareholders as reported under UK GAAP......................... (2,355) 9,424
US GAAP adjustments:
Goodwill................................................................................... (1,377) (1,467)
Impact of goodwill previously amoritised on sale of subsidiary............................. 2,905 --
Cumulative exchange loss on sale of foreign subsidiaries................................... (1,182) --
Pension costs.............................................................................. 16 331
Deferred taxation--full provision.......................................................... (143) (168)
Tax effect of other US GAAP reconciling items.............................................. (30) (266)
Fixed asset revaluations................................................................... 100 508
Deferred profit on sale of property........................................................ 303 303
Pre-production costs....................................................................... (1,200) --
Other...................................................................................... 21 (16)
Minority interests......................................................................... -- (5)
--------- ---------
Net (loss)/income under US GAAP.............................................................. (2,942) 8,644
--------- ---------
--------- ---------
Net (loss)/income under US GAAP
Continuing................................................................................. 6,001 6,015
Discontinued............................................................................... (8,943) 2,629
--------- ---------
(2,942) 8,644
--------- ---------
--------- ---------
</TABLE>
<TABLE>
<CAPTION>
PENCE PER SHARE PENCE PER SHARE
1998 1997
----------------- -----------------
<S> <C> <C>
Basic and diluted earnings per share under US GAAP...............................
Continuing..................................................................... 7.3 7.2
Discontinued................................................................... (10.9) 3.3
----- ---
(3.6) 10.5
----- ---
----- ---
</TABLE>
F-111
<PAGE>
ADWEST AUTOMOTIVE PLC
NOTES TO THE ACCOUNTS (CONTINUED)
31 SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN UNITED KINGDOM AND UNITED STATES
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (CONTINUED)
Effect on shareholders' funds of differences between UK and US GAAP
<TABLE>
<CAPTION>
1998 1997
L'000 L'000
--------- ---------
<S> <C> <C>
Shareholders' funds as reported under UK GAAP.................................................. 8,246 29,451
US GAAP adjustments:
Goodwill..................................................................................... 64,744 52,109
Pension costs................................................................................ 4,930 4,913
Deferred taxation--full provision............................................................ (310) (168)
Tax effect of other US GAAP reconciling items................................................ (1,285) (1,283)
Fixed asset revaluations..................................................................... (761) (876)
Proposed dividends........................................................................... 4,545 4,536
Deferred profit on sale of property.......................................................... (4,127) (4,430)
Pre-production costs......................................................................... (1,200) --
Employee share trust arrangements............................................................ (641) (724)
Other........................................................................................ 99 86
Minority interests........................................................................... (149) (146)
--------- ---------
Shareholders' funds under US GAAP.............................................................. 74,091 83,468
--------- ---------
--------- ---------
</TABLE>
NEW US ACCOUNTING STANDARDS AND PRONOUNCEMENTS NOT YET ADOPTED
SFAS 133--In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133 ("SFAS 133"), "Accounting
for Derivative Instruments and Hedging Activities". This statement establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts (collectively referred to as
derivatives) and for hedging activities. It requires that an entity recognise
all derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. This statement is
effective for all fiscal quarters of fiscal years beginning after June 15, 1999.
Management has not determined the effect of the adoption of SFAS 133.
SOP 98-1--During January 1998, the American Institute of Certified Public
Accountants (AICPA) issued Statement of Position 98-1 ACCOUNTING FOR THE COSTS
OF COMPUTER SOFTWARE DEVELOPED OR OBTAINED FOR INTERNAL USE ("SOP 98-1") which
becomes effective for all fiscal years beginning after December 15, 1998. Under
SOP 98-1, computer software costs that are incurred in the preliminary project
stage are expensed as incurred. Once specific capitalisation criteria have been
met, external direct costs of materials and service consumed in developing or
obtaining internal-use computer software, certain personnel costs, and interest
costs incurred when developing computer software for internal use are
capitalised. Training costs and data conversion costs are generally expensed as
incurred. Such capitalised costs are amortised over the estimated useful life of
the software. The company is evaluating the effect of the pronouncement.
NEW UK ACCOUNTING STANDARDS NOT YET ADOPTED
FRS 10 - Goodwill and Intangible Assets: In December 1997, the Accounting
Standard Board in the United Kingdom issued Financial Reporting Standard No. 10
"Goodwill and Intangible Assets" (FRS 10). FRS 10 requires that purchased
goodwill and intangible assets should be capitalised as assets and amortised
over the life of the assets. Goodwill and intangible assets need not be
amortised if it can be
F-112
<PAGE>
ADWEST AUTOMOTIVE PLC
NOTES TO THE ACCOUNTS (CONTINUED)
31 SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN UNITED KINGDOM AND UNITED STATES
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (CONTINUED)
demonstrated that the current market value of the goodwill or intangible is not
below its carrying value. FRS 10 is effective for accounting periods ending on
or after 23 December 1998. The standard does not require reinstatement of
goodwill previously eliminated against retained surplus.
FRS 11--Impairment of fixed assets and goodwill: In July 1998, the Accounting
Standards Board in the United Kingdom issued Financial Reporting Standard No. 11
"Impairment of fixed assets and goodwill" (FRS 11). The standard requires that
any impairment in the carrying value of fixed assets should be recognised in the
profit and loss account in the current period and requires that impairment
reviews be undertaken when there is some indication of impairment. The review
should be performed on individual income generating units based on discounted
cash flows. FRS 11 covers not only tangible fixed assets, intangible fixed
assets and goodwill but also investments in subsidiaries, associates and joint
ventures to the extent that they are not covered by other standards. FRS 11 is
effective for accounting periods ending on or after 23 December 1998.
FRS 12--Provisions, contingent liabilities and contingent assets: In September
1998, the Accounting Standard Board in the United Kingdom issued Financial
Reporting Standard No. 12 "Provisions, contingent liabilities and contingent
assets" (FRS 12). The principal feature of the standard is that it requires that
a provision is recognised when there is a legal or constructive obligation
arising from past events and it is probable (ie, more likely than not) that
there will be an outflow of benefits and the amount can be reliably estimated.
FRS 12 is effective for accounting periods ending on or after 23 March 1999.
FRS 13--Derivatives and other financial instruments--disclosures: In September
1998, the Accounting Standards Board in the United Kingdom issued Financial
Reporting Standard No. 13 "Derivatives and other financial instruments:
disclosures" (FRS 13). FRS 13 is concerned only with disclosure and the
requirements comprise both narrative and numerical disclosures. FRS 13 is
effective for accounting periods ending on or after 23 March 1999.
FRS 14--Earnings per share: In October 1998, the Accounting Standards Board in
the United Kingdom issued Financial Reporting Standard No. 14 "Earnings per
share" (FRS 14). The standard applies to all entities whose ordinary or
potential ordinary shares are currently publicly traded, or are in the process
of becoming so, and to any other entity providing earnings per share (eps)
information voluntarily. FRS 14 is effective for accounting periods ending on or
after 23 December 1998.
COMPANIES ACT 1985
These consolidated financial statements do not constitute "statutory accounts"
within the meaning of the Companies Act 1985 of Great Britain for any of the
periods presented. Statutory accounts for the years ended 30 June 1997 and 30
June 1998 have been filed with the United Kingdom's Registrar of Companies. The
auditor has reported on these accounts. The reports were unqualified and did not
contain statements under Section 237 (2) or (3) of the Act.
These consolidated financial statements exclude certain parent company
statements and other information required by the Companies Act 1985, however,
they include all material disclosures required by generally accepted accounting
principles in the United Kingdom including those Companies Act 1985 disclosures
relating to the statement of income and balance sheet items.
F-113
<PAGE>
ADWEST AUTOMOTIVE PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT--UK GAAP
FOR THE SIX MONTHS ENDED 31 DECEMBER
<TABLE>
<CAPTION>
1998 1997
----------- -----------
L000 L000
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
TURNOVER
Continuing operations................................................................... 118,155 99,203
Discontinued operations................................................................. -- 12,987
----------- -----------
118,155 112,190
----------- -----------
OPERATING PROFIT
Continuing operations................................................................... 8,326 7,587
Discontinued operations................................................................. -- 1,867
----------- -----------
PROFIT ON ORDINARY ACTIVITIES BEFORE INTEREST........................................... 8,326 9,454
Net interest charge..................................................................... (2,924) (2,196)
----------- -----------
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION........................................... 5,402 7,258
Taxation charge......................................................................... (1,536) (2,249)
----------- -----------
PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION............................................ 3,866 5,009
Profit attributable to minority shareholders--equity.................................... (133) (246)
----------- -----------
PROFIT FOR THE PERIOD................................................................... 3,733 4,763
Dividends:
Interim 0p per share (1997 2.3p)...................................................... -- (1,897)
----------- -----------
RETAINED PROFIT FOR THE PERIOD.......................................................... 3,733 2,866
----------- -----------
----------- -----------
Earnings per share--UK GAAP............................................................. 4.5p 5.7p
</TABLE>
F-114
<PAGE>
ADWEST AUTOMOTIVE PLC
CONSOLIDATED BALANCE SHEET--UK GAAP
AT 31 DECEMBER
<TABLE>
<CAPTION>
1998 1997
L000 L000
----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
FIXED ASSETS
Tangible assets....................................................... 70,822 61,513
Investments........................................................... 755 770
----------- -----------
71,577 62,283
----------- -----------
CURRENT ASSETS
Stock and work in progress............................................ 22,314 26,295
Debtors............................................................... 53,214 56,004
Bank and cash balances................................................ 11,005 12,459
----------- -----------
86,533 94,758
----------- -----------
CREDITORS: DUE WITHIN ONE YEAR
Borrowings............................................................ (17,916) (9,143)
Other creditors....................................................... (70,906) (72,133)
----------- -----------
(88,822) (81,276)
----------- -----------
NET CURRENT (LIABILITIES) / ASSETS.................................... (2,289) 13,482
CREDITORS: DUE AFTER ONE YEAR
Borrowings............................................................ (45,593) (60,542)
Provisions and other creditors........................................ (8,782) (7,718)
----------- -----------
(54,375) (68,260)
----------- -----------
NET ASSETS............................................................ 14,913 7,505
----------- -----------
----------- -----------
CAPITAL AND RESERVES
Called up share capital............................................... 20,794 20,758
Reserves.............................................................. 63,464 72,503
----------- -----------
Equity shareholders' funds before goodwill............................ 84,258 93,261
Goodwill on acquisition............................................... (72,681) (88,890)
----------- -----------
Shareholders' funds--equity........................................... 11,577 4,371
MINORITY INTEREST--EQUITY............................................. 3,336 3,134
----------- -----------
14,913 7,505
----------- -----------
----------- -----------
</TABLE>
F-115
<PAGE>
ADWEST AUTOMOTIVE PLC
CONSOLIDATED CASH FLOW STATEMENT--UK GAAP
FOR THE SIX MONTHS ENDED 31 DECEMBER
<TABLE>
<CAPTION>
1997
1998 (RESTATED)
L000 L000
----------- -----------
<S> <C> <C>
(UNAUDITED) (UNAUDITED)
Net cash inflow from operating activities............................................... 8,391 17,807
Return on investments and servicing of finance.......................................... (2,947) (1,821)
Taxation paid........................................................................... (1,075) (3,180)
Capital expenditure..................................................................... (7,977) (7,594)
Equity dividends paid................................................................... (4,551) (4,536)
Acquisitions and disposals.............................................................. 2,872 (32,095)
Management of liquid resources.......................................................... -- 12,811
----------- -----------
Net cash flow before financing.......................................................... (5,287) (18,608)
Financing............................................................................... (2,946) 20,015
----------- -----------
(Decrease)/increase in cash............................................................. (8,233) 1,407
----------- -----------
----------- -----------
</TABLE>
<TABLE>
<CAPTION>
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT L000 L000
- ---------------------------------------------------------------------------------------- ----------- -----------
<S> <C> <C>
(Decrease)/increase in cash in the period............................................... (8,233) 1,407
Cash outflow from reduction in debt and lease financing................................. 2,946 2,464
Cash inflow from new loans.............................................................. -- (22,420)
Cash inflow/(outflow) from movement in liquid resources................................. -- (12,811)
----------- -----------
Change in net debt resulting from cash flows............................................ (5,287) (31,360)
Loans and finance leases acquired with subsidiary....................................... -- (14,848)
New finance leases...................................................................... (2,038) (410)
Translation difference.................................................................. (2,576) 420
----------- -----------
Movement in net debt in the period...................................................... (9,901) (46,198)
Net debt at beginning of period......................................................... (52,137) (17,959)
----------- -----------
Net debt at end of period............................................................... (62,038) (64,157)
----------- -----------
----------- -----------
</TABLE>
F-116
<PAGE>
ADWEST AUTOMOTIVE PLC
RECONCILIATION OF MOVEMENTS IN CONSOLIDATED
SHAREHOLDERS' FUNDS
FOR THE SIX MONTHS ENDED 31 DECEMBER
<TABLE>
<CAPTION>
1998 1997
L000 L000
----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Profit for the period................................................. 3,733 4,763
Ordinary dividends.................................................... -- (1,897)
----------- -----------
Retained profit for the period........................................ 3,733 2,866
Currency translation differences on net investments................... (374) 562
Prior year adjustment................................................. (588) --
New share capital issued.............................................. -- 60
Goodwill in the period on acquisitions................................ 560 (28,568)
----------- -----------
NET ADDITIONS/(REDUCTIONS) TO SHAREHOLDERS' FUNDS..................... 3,331 (25,080)
SHAREHOLDERS' FUNDS AT BEGINNING OF PERIOD............................ 8,246 29,451
----------- -----------
SHAREHOLDERS' FUNDS AT END OF PERIOD.................................. 11,577 4,371
----------- -----------
----------- -----------
</TABLE>
RECONCILIATION OF OPERATING PROFIT TO NET CASH FLOW FROM OPERATING ACTIVITIES
FOR THE SIX MONTHS ENDED 31 DECEMBER
<TABLE>
<CAPTION>
1998 1997
L000 L000
----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Operating profit...................................................... 8,326 9,454
Depreciation.......................................................... 4,931 4,508
Increase in stocks.................................................... (1,893) (2,105)
Decrease in debtors................................................... 5,811 3,794
(Decrease)/increase in creditors...................................... (8,784) 2,156
----------- -----------
NET CASH FLOW FROM OPERATING ACTIVITIES............................... 8,391 17,807
----------- -----------
----------- -----------
</TABLE>
F-117
<PAGE>
ADWEST AUTOMOTIVE PLC
ANALYSIS OF NET DEBT
<TABLE>
<CAPTION>
AT 1 JULY CASH FLOW OTHER EXCHANGE AT 31
1998 ----------- NON CASH MOVEMENT DECEMBER
----------- MOVEMENTS ----------- 1998
L000 L000 ----------- L000 -----------
L000 L000
<S> <C> <C> <C> <C> <C>
Cash at bank and in hand................................ 17,934 (10,143) -- 1,411 9,202
Bank overdraft.......................................... (6,842) 1,910 -- (535) (5,467)
-----------
(8,233)
-----------
Borrowings due after one year........................... (54,319) 10 11,083 (2,367) (45,593)
Borrowings due within one year.......................... (3,043) 2,185 (11,083) (508) (12,449)
Finance leases.......................................... (7,665) 751 (2,038) (582) (9,534)
-----------
2,946
-----------
Current asset investments............................... 1,798 -- -- 5 1,803
----------- ----------- ----------- ----------- -----------
(52,137) (5,287) (2,038) (2,576) (62,038)
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
</TABLE>
F-118
<PAGE>
ADWEST AUTOMOTIVE PLC
SEGMENTAL INFORMATION
FOR THE SIX MONTHS ENDED 31 DECEMBER
<TABLE>
<CAPTION>
1998 1997
L000 L000
----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
TURNOVER
- ----------------------------------------------------------------------
CLASS OF BUSINESS
Automotive: UK........................................................ 32,460 36,004
Rest of Europe............................................. 80,327 59,274
USA........................................................ 5,368 3,925
----------- -----------
Continuing operations................................................. 118,155 99,203
Discontinued operations............................................... -- 12,987
----------- -----------
118,155 112,190
----------- -----------
----------- -----------
GEOGRAPHICAL SEGMENTS (BY DESTINATION)
- ----------------------------------------------------------------------
UK.................................................................... 30,841 34,437
Rest of Europe........................................................ 80,337 62,127
USA................................................................... 5,628 14,664
Rest of the World..................................................... 1,349 962
----------- -----------
118,155 112,190
----------- -----------
----------- -----------
OPERATING PROFIT
- ----------------------------------------------------------------------
CLASS OF BUSINESS
Automotive: UK........................................................ 928 3,147
Rest of Europe............................................. 7,933 4,649
USA........................................................ (535) (209)
----------- -----------
Continuing operations................................................. 8,326 7,587
----------- -----------
Operating profit as % of turnover..................................... 7.1% 7.7%
Discontinued operations............................................... -- 1,867
----------- -----------
Operating profit as % of turnover..................................... -- 14.4%
----------- -----------
8,326 9,454
----------- -----------
----------- -----------
</TABLE>
F-119
<PAGE>
ADWEST AUTOMOTIVE PLC
NOTES TO THE ACCOUNTS
(UNAUDITED)
1 PREPARATION OF INTERIM FINANCIAL REPORT
The accompanying Condensed Consolidated Financial Statements present the
financial position and results of operations of the Group and have been prepared
in accordance with UK GAAP, which differ in certain significant respects from
U.S. GAAP. See Note 5 for a discussion and quantifications of the principal
differences between UK GAAP affecting the Group.
The interim financial information included in these Condensed Consolidated
Financial Statements is unaudited but reflects all adjustments (consisting only
of normal recurring accruals) which are in the opinion of management necessary
for a fair presentation of the results for interim periods presented. The
interim Condensed Consolidated Financial Statements should be read in
conjunction with the Consolidated Financial Statements and notes thereto
included herein.
2 TAXATION CHARGE
The taxation charge before disposals is at an effective rate of 29%. This
compares to an effective rate of 31% for the half year to 31 December 1997.
3 EARNINGS PER SHARE
Earnings per share is calculated on earnings of L3,733,000 (L4,763,000 for
the half year to 31 December 1997) and on 83,173,908 (83,025,820 for the half
year to 31 December 1997) shares in issue, weighted on a time basis. Fully
diluted earnings per share based on the exercise of options under the employee
share schemes show no material dilution.
4 ACQUISITIONS AND DISPOSALS
Heidemann Verwaltungsgesellschaft mit beschrankter Haftung was acquired on
11 September 1997. The US Electronics division was sold in May 1998.
5 SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN UNITED KINGDOM AND UNITED STATES
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
These accounts are prepared in conformity with generally accepted accounting
principles applicable in the United Kingdom (UK GAAP). These differ in certain
significant respects from those applicable in the United States (US GAAP). These
differences, together with the approximate effects of the adjustments on net
profits and shareholders' funds, relate principally to the items set out below:
GOODWILL AND OTHER INTANGIBLE ASSETS
Under UK GAAP goodwill arising on acquisition has been charged to reserves.
Under US GAAP goodwill is capitalised and amortised by charges against income
over the period, not to exceed 40 years, over which the benefit arises. For US
GAAP, goodwill has been amortised by the Group over 40 years.
PRIOR YEAR ADJUSTMENT
Under UK GAAP the introduction of a new accounting standard, FRS12, has been
treated as a prior year adjustment. Under US GAAP the charge is recognized in
the period in which the new accounting policy is implemented.
F-120
<PAGE>
ADWEST AUTOMOTIVE PLC
NOTES TO THE ACCOUNTS (CONTINUED)
(UNAUDITED)
5 SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN UNITED KINGDOM AND UNITED STATES
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (CONTINUED)
DIVIDENDS
Under UK GAAP dividends proposed after the end of an accounting period in
respect of that accounting period are deducted in arriving at retained earnings
for that period. Under US GAAP such dividends are not deducted until declared.
DEFERRED TAXATION
Under UK GAAP provision is made for deferred taxation only to the extent
that it is probable that an actual liability or asset will crystallise in the
foreseeable future. US GAAP requires full provision for deferred income taxes
under the liability method on all temporary differences and, if required, a
valuation allowance is established to reduce gross deferred taxation assets to
the amount which is more likely than not to be realised.
Deferred taxation also arises in relation to the tax effect of other US GAAP
differences.
PENSION COSTS
Under UK GAAP, the cost of providing pensions is charged against profits on
a systematic basis, with pension surpluses and deficits being amortised over the
expected remaining service lives of current employees. Under US GAAP, costs and
surpluses are similarly spread over the expected remaining service lives but
based on prescribed actuarial assumptions, allocation of costs and valuation
methods, which differ in certain respects from those used for UK GAAP.
DEFERRED PROFIT ON SALE OF PROPERTY
In 1996, properties were disposed of which had previously been revalued
under UK GAAP. No profit arose on this transaction under UK GAAP. A profit
arises under US GAAP on the basis that US GAAP does not permit the revaluation
of property. Under US GAAP, the element of the profit in respect of property
subsequently leased back on an operating lease basis is amortised in equal
instalments over the life of the lease.
EMPLOYEE SHARE TRUST ARRANGEMENTS
Employee share trusts have been established in order to hedge obligations in
respect of options issued under certain employee share option schemes. Under UK
GAAP the Company's ordinary shares held by the employee share trusts are
included at cost in fixed asset investments. Dividends receivable on such shares
are included in the statement of income. Under US GAAP, such shares and
dividends receivable from those shares are treated as treasury stock and
included in shareholders' equity.
REVALUATION OF FIXED ASSETS
Under UK GAAP the Group has revalued certain fixed assets. This is not
permitted under US GAAP.
F-121
<PAGE>
ADWEST AUTOMOTIVE PLC
NOTES TO THE ACCOUNTS (CONTINUED)
(UNAUDITED)
5 SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN UNITED KINGDOM AND UNITED STATES
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (CONTINUED)
PRE-PRODUCTION COSTS
Under UK GAAP, certain significant pre-production costs on new products
which are not pre-funded by the customer are carried forward in work in
progress. These costs are then written off on a unit of production basis over
the life of the contract with the customer. Under US GAAP these costs are
generally expensed as incurred.
CURRENT ASSETS AND LIABILITIES
Under UK GAAP current assets include amounts which fall due after more than
one year. Under US GAAP such assets would be re-classified as non-current
assets. Also under UK GAAP provisions for liabilities and charges include
amounts due within one year which would be re-classified to current liabilities
under US GAAP.
EARNINGS PER ORDINARY SHARE
Under UK GAAP earnings per share is based on profit for the financial year
and computed using the weighted average number of Ordinary Shares in issue
during the year. US GAAP also requires the presentation of diluted earnings per
share which is based upon net income, as adjusted, computed using the weighted
average shares and the effect of other dilutive instruments.
CASH FLOWS
The principal difference between UK GAAP and US GAAP is in respect of
classification. Under UK GAAP, the Group presents its cash flows for operating
activities, returns on investments and servicing of finance, taxation, capital
expenditures and financial investments, acquisition and disposals, equity
dividends paid, management of liquid resources, and financing. US GAAP requires
only three categories of cash flow activities which are operating, investing and
financing.
Cash flows arising from taxation and returns on investments and servicing of
finance under UK GAAP would, with the exception of dividends paid, be included
as operating activities under US GAAP; dividend payments would be included as a
financing activity under US GAAP. In addition, capital expenditures and
financial investment, acquisition and disposals, and management of liquid
resources under UK GAAP would be presented as investing activities under US
GAAP.
UK GAAP defines cash as cash in hand and deposits repayable on demand. Short
term deposits which are readily convertible into cash, into known amounts of
cash at, or close to, their carrying value are classified as liquid resources.
US GAAP defines cash and cash equivalents as cash in hand and short term highly
liquid investments with original maturities of three months or less. Cash flows
in respect of short term deposits with original maturities of three months or
less. Cash flows in respect of short term deposits with original maturities
exceeding three months are included in investing activities under US GAAP and
are included in capital expenditure and financial investment under UK GAAP.
F-122
<PAGE>
ADWEST AUTOMOTIVE PLC
NOTES TO THE ACCOUNTS (CONTINUED)
(UNAUDITED)
5 SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN UNITED KINGDOM AND UNITED STATES
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (CONTINUED)
Under US GAAP, the following amounts would be reported:
<TABLE>
<CAPTION>
HALF YEAR
TO
31 DEC 1997
HALF YEAR -----------
TO
31 DEC 1998 L'000
-----------
L'000
<S> <C> <C>
Net cash provided by operating activities.............................................. 4,368 12,806
Net cash used in investing activities.................................................. (5,105) (39,689)
Net cash (used in)/provided by financing activities.................................... (9,406) 17,242
Effect of changes in exchange rate..................................................... 1,411 (172)
----------- -----------
Net decrease in cash & cash equivalents................................................ (8,732) (9,813)
Cash & cash equivalents at beginning of year........................................... 17,934 22,272
----------- -----------
Cash & cash equivalents at end of year................................................. 9,202 12,459
----------- -----------
----------- -----------
</TABLE>
Effect on (loss)/profit attributable to shareholders of differences between
UK and US GAAP
<TABLE>
<CAPTION>
HALF YEAR
TO
31 DEC 1997
HALF YEAR -----------
TO
31 DEC 1998 L'000
-----------
L'000
<S> <C> <C>
Profit attributable to shareholders as reported under UK GAAP.......................... 3,733 4,763
US GAAP adjustments:
Goodwill............................................................................. (908) (519)
Pension costs........................................................................ (249) 9
Deferred taxation--full provision.................................................... (132) (91)
Tax effect of other US GAAP reconciling items........................................ 54 (5)
Fixed asset revaluations............................................................. 50 50
Deferred profit on sale of property.................................................. 152 152
Pre-production costs................................................................. (1,262) (383)
Other................................................................................ (36) (8)
Reverse prior year adjustment........................................................ (588) --
Minority interests................................................................... 8 (2)
----------- -----------
Net income under US GAAP............................................................... 822 3,966
----------- -----------
----------- -----------
</TABLE>
<TABLE>
<CAPTION>
EARNINGS
PER SHARE
1997
EARNINGS -----------
PER SHARE
1998 PENCE
-----------
PENCE
<S> <C> <C>
Basic and diluted earnings per share under US GAAP
Continuing........................................................................... 1.7 2.5
Discontinued......................................................................... (0.7) 2.3
----------- -----------
1.0 4.8
----------- -----------
----------- -----------
</TABLE>
F-123
<PAGE>
ADWEST AUTOMOTIVE PLC
NOTES TO THE ACCOUNTS (CONTINUED)
(UNAUDITED)
5 SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN UNITED KINGDOM AND UNITED STATES
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (CONTINUED)
Effect on shareholders' funds of differences between UK and US GAAP
<TABLE>
<CAPTION>
AS AT
31 DEC 1997
AS AT -----------
31 DEC 1998 L'000
-----------
L'000
<S> <C> <C>
Shareholders' funds as reported under UK GAAP.......................................... 11,577 4,371
US GAAP adjustments:
Goodwill............................................................................. 66,323 80,545
Pension costs........................................................................ 4,681 4,922
Deferred taxation--full provision.................................................... (442) (259)
Tax effect of other US GAAP reconciling items........................................ (1,231) (1,288)
Fixed asset revaluations............................................................. (711) (819)
Proposed dividends................................................................... -- 1,897
Deferred profit on sale of property.................................................. (3,976) (4,278)
Pre-production costs................................................................. (2,462) (383)
Employee share trust arrangements.................................................... (641) (651)
Other................................................................................ (134) (94)
Minority interests................................................................... (141) (148)
----------- -----------
Shareholders' funds under US GAAP...................................................... 72,843 83,815
----------- -----------
----------- -----------
</TABLE>
F-124
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Trident Automotive plc:
We have audited the accompanying consolidated balance sheets of Trident
Automotive plc (a company registered under the laws of England) and subsidiaries
as of December 31, 1998 and March 31, 1998, and the related consolidated
statements of operations, stockholders' investment and cash flows for the period
from inception (September 19, 1997) to March 31, 1998, the one month period
ended April 30, 1998 and the eight month period ended December 31, 1998. These
consolidated 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 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 audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Trident Automotive plc and
subsidiaries as of December 31, 1998 and March 31, 1998, and the results of
their operations and their cash flows for the period from inception (September
19, 1997) to March 31, 1998, the one month period ended April 30, 1998 and the
eight month period ended December 31, 1998 in conformity with generally accepted
accounting principles.
ARTHUR ANDERSEN LLP
Minneapolis, Minnesota,
March 26, 1999
F-125
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
FKI
COMPANY PREDECESSOR
DECEMBER 31, MARCH 31,
1998 1998
------------- -----------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents........................................................... $ 8,368 $ 11,415
Accounts receivable, net of allowance for doubtful
accounts of $2,238 and $1,745..................................................... 55,735 48,875
Inventories......................................................................... 15,758 18,798
Other current assets................................................................ 21,281 10,526
------------- -----------
Total current assets.............................................................. 101,142 89,614
Property, Plant and Equipment, net.................................................... 57,332 64,873
Goodwill, net of accumulated amortization of $3,908 and $679.......................... 215,425 88,945
Other Assets, net of accumulated amortization of $1,010 and $564...................... 9,074 15,398
------------- -----------
$ 382,973 $ 258,830
------------- -----------
------------- -----------
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current Liabilities:
Current portion of long-term debt................................................... $ 7,059 $ 1,500
Accounts payable.................................................................... 33,796 37,018
Accrued expenses.................................................................... 54,068 28,570
------------- -----------
Total current liabilities......................................................... 94,923 67,088
Noncurrent Liabilities:
Long-term debt, less current portion................................................ 136,799 126,300
Accrued pension and other postretirement liabilities................................ 12,957 12,891
Other noncurrent liabilities........................................................ 37,200 11,536
------------- -----------
Total liabilities................................................................. 281,879 217,815
------------- -----------
------------- -----------
Minority Interest..................................................................... 786 1,170
Redeemable U.S. Dollar Ordinary Shares................................................ -- 740
Stockholders' Investment:
Common stock--Sterling ordinary shares; $1.70 par value; 50,000 shares issued and
outstanding....................................................................... 85 85
Common stock--U.S. dollar ordinary shares; $1.00 par Value; 25,000,000 shares
authorized; 17,000,000 and 16,704,000 shares issued and outstanding............... 17,000 16,704
Additional paid-in capital.......................................................... 78,157 23,556
Retained earnings................................................................... 5,876 123
Accumulated other comprehensive income (loss)--cumulative translation adjustment.... (810) (1,363)
------------- -----------
Total stockholders' investment.................................................... 100,308 39,105
------------- -----------
$ 382,973 $ 258,830
------------- -----------
------------- -----------
</TABLE>
The accompanying notes are an integral part of these consolidated balance
sheets.
F-126
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS)
<TABLE>
<CAPTION>
FKI
TRIDENT PREDECESSOR
PREDECESSOR -------------------
COMPANY ------------- PERIOD FROM
----------------- ONE MONTH INCEPTION
EIGHT MONTH PERIOD ENDED (SEPTEMBER 19,
PERIOD ENDED APRIL 30, 1997) TO MARCH 31,
DECEMBER 31, 1998 1998 1998
----------------- ------------- -------------------
<S> <C> <C> <C>
Revenues.................................................. $ 187,526 $ 26,475 $ 86,342
Cost of sales............................................. 151,302 26,184 71,295
-------- ------------- -------
Gross profit............................................ 36,224 291 15,047
Selling, general and administrative expenses.............. 14,314 4,009 9,634
Amortization expense...................................... 4,236 389 --
-------- ------------- -------
Operating income (loss)................................. 17,674 (4,107) 5,413
Interest expense, net..................................... (7,703) (952) (3,887)
Exchange gain (loss)...................................... -- 341 (922)
Other income (expense).................................... (82) 62 24
-------- ------------- -------
Income (loss) before provision (benefit) for income
taxes and minority interest........................... 9,889 (4,656) 628
Provision (benefit) for income taxes...................... 4,084 (1,656) 505
Minority interest in profit of subsidiary................. (71) (69) --
-------- ------------- -------
Net income (loss)....................................... $ 5,876 $ (2,931) $ 123
-------- ------------- -------
-------- ------------- -------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-127
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' INVESTMENT
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
COMMON STOCK
------------------------------------------------
U.S. ACCUMULATED
STERLING DOLLARS ADDITIONAL OTHER
ORDINARY ORDINARY PAID-IN- RETAINED COMPREHENSIVE
SHARES DOLLARS SHARES DOLLARS CAPITAL EARNINGS INCOME (LOSS)
----------- ----------- ----------- --------- ----------- ----------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Initial capitalization of
Trident Automotive plc..... 50,000 $ 85 -- $ -- $ -- $ -- $ --
Issuance of U.S. Dollar
ordinary shares............ -- -- 16,704,000 16,704 23,556 -- --
Net income................... -- -- -- -- -- 123 --
Other comprehensive income--
translation adjustment -- -- -- -- -- -- (1,363)
Total comprehensive income...
----------- --- ----------- --------- ----------- ----------- ------
Balance, March 31, 1998...... 50,000 85 16,704,000 16,704 23,556 123 (1,363)
Net income................... -- -- -- -- -- (2,931) --
Other comprehensive income--
translation adjustment -- -- -- -- -- -- (1,895)
Total comprehensive income...
----------- --- ----------- --------- ----------- ----------- ------
Balance, April 30, 1998...... 50,000 85 16,704,000 16,704 23,556 (2,808) (3,258)
Purchase by Dura............. -- -- 296,000 296 54,601 2,808 3,258
Net income................... -- -- -- -- -- 5,876 --
Other comprehensive income--
translation adjustment -- -- -- -- -- -- (810)
Total comprehensive income...
----------- --- ----------- --------- ----------- ----------- ------
Balance, December 31, 1998... 50,000 $ 85 17,000,000 $ 17,000 $ 78,157 $ 5,876 $ (810)
----------- --- ----------- --------- ----------- ----------- ------
----------- --- ----------- --------- ----------- ----------- ------
<CAPTION>
TOTAL
STOCKHOLDERS'
INVESTMENT
-------------
<S> <C>
Initial capitalization of
Trident Automotive plc..... $ 85
Issuance of U.S. Dollar
ordinary shares............ 40,260
Net income...................
Other comprehensive income--
translation adjustment
Total comprehensive income... (1,240)
-------------
Balance, March 31, 1998...... 39,105
Net income...................
Other comprehensive income--
translation adjustment
Total comprehensive income... (4,826)
-------------
Balance, April 30, 1998...... 34,279
Purchase by Dura............. 60,963
Net income...................
Other comprehensive income--
translation adjustment
Total comprehensive income... 5,066
-------------
Balance, December 31, 1998... $ 100,308
-------------
-------------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-128
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
FKI
TRIDENT PREDECESSOR
COMPANY PREDECESSOR -----------------
------------ ------------- PERIOD FROM
EIGHT MONTH ONE MONTH INCEPTION
PERIOD ENDED PERIOD ENDED (SEPTEMBER 19,
DECEMBER 31, APRIL 30, 1997) TO
1998 1998 MARCH 31, 1998
------------ ------------- -----------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss).............................................. $ 5,876 $ (2,931) $ 123
Adjustments to reconcile net income (loss) to net cash provided
by (used in) operating activities--
Depreciation and amortization................................ 9,582 1,456 3,547
Deferred tax................................................. 5,200 (1,681) (2,865)
Exchange (gain) loss......................................... -- (341) 922
Minority interest............................................ (71) (69) (24)
Changes in other operating items............................. (32,263) 6,896 4,511
------------ ------------- --------
Net cash provided by (used in) operating activities........ (11,676) 3,330 6,214
------------ ------------- --------
INVESTING ACTIVITIES:
Capital expenditures, net...................................... (8,939) (2,454) (7,786)
Purchase of Predecessor, net................................... -- -- (155,490)
Acquisition and sale of subsidiaries........................... 8,446 -- --
------------ ------------- --------
Net cash provided by (used in) investing activities........ (493) (2,454) (163,276)
------------ ------------- --------
FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt....................... 50,000 -- 125,000
Proceeds from borrowings on revolving credit facility.......... 11,706 2,000 7,763
Repayment of debt.............................................. (52,800) (1,300) (4,963)
Receipt of capital from Investor Group......................... -- -- 42,585
Equity fees paid to affiliates of Investor Group............... -- -- (1,500)
------------ ------------- --------
Net cash provided by financing activities.................. 8,906 700 168,885
------------ ------------- --------
EFFECT OF EXCHANGE RATES ON CASH................................. (810) (550) (408)
------------ ------------- --------
NET CHANGE IN CASH AND CASH EQUIVALENTS.......................... (4,073) 1,026 11,415
CASH AND CASH EQUIVALENTS, beginning of period................... 12,441 11,415 --
------------ ------------- --------
CASH AND CASH EQUIVALENTS, end of period......................... $ 8,368 $ 12,441 $ 11,415
------------ ------------- --------
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for -
Interest..................................................... $ 9,388 $ 361 $ 1,546
Income taxes................................................. 3,490 -- 510
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-129
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND BASIS OF PRESENTATION:
Trident Automotive PLC (the "Company") incorporated in the UK, and its
subsidiaries were formed on September 19, 1997 to acquire the net assets of the
FKI Automotive Group (the "FKI Acquisition") from FKI plc ("FKI"). The FKI
Acquisition occurred on December 12, 1997. The aggregate purchase price,
including transaction costs, was approximately $170 million. The FKI Acquisition
was financed with $42.5 million in equity contributions, $75 million in proceeds
from a private placement of the Company's 10% Senior Subordinated Notes due 2005
(the "Notes") and borrowings under a $105 million secured credit facility.
On April 30, 1998, DURA UK, LTD. ("Dura Ltd.") acquired the Company. Dura
Ltd. is a wholly owned subsidiary of Dura Automotive Systems, Inc., a Delaware
corporation, which is a leading designer and manufacturer of driver control
systems, engineered mechanical components and cable-related systems for the
global automotive industry.
The FKI and Dura Acquisitions were accounted for using the purchase method
of accounting and, accordingly, the assets acquired and liabilities assumed have
been recorded at their fair values as of the dates of the acquisitions. The
excess of the purchase price over the fair value of the assets acquired and
liabilities assumed has been recorded as goodwill and is being amortized over 40
years. The assets acquired and liabilities have been recorded based upon
preliminary estimates of fair value as of the dates of acquisition. The Company
does not believe the final allocation of purchase price will be materially
different from preliminary allocations. Any changes to the preliminary estimates
will be reflected as an adjustment to goodwill. Additional purchase liabilities
recorded in conjunction with these acquisitions included approximately $44
million for costs associated with the shutdown and consolidation of certain
acquired facilities and $15 million for associated severance and other related
costs. At December 31, 1998, liabilities for approximately $32 million for costs
associated with the shutdown and consolidation of certain acquired facilities
and $13 million in severance costs are recorded on the consolidated balance
sheet. Results of operations for these acquisitions have been included in the
accompanying consolidated financial statements since the dates of acquisition.
Included in these reserves are amounts associated with businesses to be
exited in conjunction with the acquisition by Dura. The accompanying
consolidated statements of operations include revenues and operating losses from
these businesses as follows (in thousands):
<TABLE>
<CAPTION>
PERIOD ENDED
------------------------------------------------
APRIL 30,
MARCH 31, 1998 1998 DECEMBER 31, 1998
-------------- ------------- -----------------
<S> <C> <C> <C>
Revenues................................... $ 23,912 $ 7,179 $ 50,222
Operating income (loss).................... $ 1,164 $ (954) $ 3,650
</TABLE>
These dispositions are anticipated to be completed by the end of the second
quarter of 1999.
The following unaudited consolidated pro forma results of operations for the
year ended March 31, 1998 give effect to the FKI Acquisition as if such
transactions had occurred at the beginning of the period (in thousands):
<TABLE>
<CAPTION>
1998
----------
<S> <C>
Revenues.......................................................................... $ 297,500
Operating income.................................................................. 14,526
Net loss.......................................................................... (442)
</TABLE>
F-130
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1. ORGANIZATION AND BASIS OF PRESENTATION: (CONTINUED)
The unaudited pro forma consolidated financial information does not purport
to represent what the respective entity's financial position or results of
operations would actually have been if these transactions had occurred at such
dates or to project the Company's future results of operations.
2. SIGNIFCANT ACCOUNTING POLICIES:
PRINCIPLES OF CONSOLIDATION:
The accompanying consolidated financial statements include the accounts of
the Company and its wholly-owned subsidiaries. All significant intercompany
accounts and transactions have been eliminated in consolidation.
FISCAL YEAR:
Effective December 31, 1998, the Company changed its fiscal year end from
March 31 to December 31. The Company reports its operating results based on a
52-/53-week fiscal year. For presentation purposes, the Company uses December 31
as its fiscal year-end.
CASH EQUIVALENTS:
Cash equivalents consist of money market instruments with original
maturities of three months or less and are stated at cost which approximates
fair value.
INVENTORIES:
Inventories are valued at the lower of first-in, first-out ("FIFO") cost or
market.
Inventories consisted of the following (in thousands):
<TABLE>
<CAPTION>
COMPANY FKI
------------ PREDECESSOR
DEC. 31, --------------
1998 MARCH 31, 1998
------------ --------------
<S> <C> <C>
Finished products.............................................. $ 5,797 $ 4,158
Work-in-process................................................ 3,470 6,755
Raw materials.................................................. 6,491 7,885
------------ -------
Total.......................................................... $ 15,758 $ 18,798
------------ -------
------------ -------
</TABLE>
F-131
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2. SIGNIFCANT ACCOUNTING POLICIES: (CONTINUED)
OTHER CURRENT ASSETS:
Other current assets consisted of the following (in thousands):
<TABLE>
<CAPTION>
COMPANY FKI
------------ PREDECESSOR
DEC. 31, --------------
1998 MARCH 31, 1998
------------ --------------
<S> <C> <C>
Deferred income taxes.......................................... $ 15,639 $ 4,885
Prepaid expenses............................................... 2,600 2,856
Excess of cost over billings on uncompleted tooling projects... 2,300 651
Taxes receivable............................................... 742 2,134
------------ -------
$ 21,281 $ 10,526
------------ -------
------------ -------
</TABLE>
PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment are stated at cost. For financial reporting
purposes, depreciation is provided on the straight-line method over the
following estimated useful lives:
<TABLE>
<S> <C>
10 to 15
Land and Improvements........................................ years
Buildings.................................................... 30 years
Machinery and equipment...................................... 5 to 15 years
</TABLE>
Accelerated depreciation methods are used for tax reporting purposes.
Maintenance and repairs are charged to expense as incurred. Major
betterments and improvements which extend the useful life of the item are
capitalized and depreciated. The cost and accumulated depreciation of property,
plant and equipment retired or otherwise disposed of are removed from the
related accounts, and any residual values are charged or credited to income.
GOODWILL AND OTHER ASSETS:
Goodwill represents the excess of the purchase price over the fair value of
the net assets acquired and is being amortized on a straight-line basis over 40
years. Other assets principally consist of debt financing costs which are being
amortized over the term of the applicable agreement.
The Company periodically evaluates whether events and circumstances have
occurred which may affect the estimated useful life or the recoverability of the
remaining balance of its goodwill and other long-lived assets. If such events or
circumstances were to indicate that the carrying amount of these assets would
not be recoverable, the Company would estimate the future cash flows expected to
result from the use of the assets and their eventual disposition. If the sum of
the expected future cash flows (undiscounted and without interest charges) were
less than the carrying amount of goodwill and other long-lived assets, the
Company would recognize an impairment loss.
F-132
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2. SIGNIFCANT ACCOUNTING POLICIES: (CONTINUED)
ACCRUED LIABILITIES:
Accrued liabilities consisted of the following (in thousands):
<TABLE>
<CAPTION>
COMPANY FKI
------------ PREDECESSOR
DEC. 31, --------------
1998 MARCH 31, 1998
------------ --------------
<S> <C> <C>
Income taxes................................................... $ 5,385 $ 3,695
Plant closure and consolidation costs.......................... 29,635 4,363
Compensation and benefits...................................... 6,589 9,737
Medical insurance.............................................. 557 --
Legal and environmental........................................ 1,873 3,332
Interest....................................................... 1,764 2,271
Other.......................................................... 8,265 5,172
------------ -------
$ 54,068 $ 28,570
------------ -------
------------ -------
</TABLE>
OTHER NONCURRENT LIABILITIES:
Other noncurrent liabilities consisted of the following (in thousands):
<TABLE>
<CAPTION>
COMPANY FKI
------------ PREDECESSOR
DEC. 31, --------------
1998 MARCH 31, 1998
------------ --------------
<S> <C> <C>
Plant closure and consolidation costs.......................... $ 15,840 $ 4,858
Loss contracts................................................. 5,657 4,202
Legal and environmental........................................ 2,210 --
Deferred income taxes.......................................... 13,493 --
Other.......................................................... -- 2,476
------------ -------
$ 37,200 $ 11,536
------------ -------
------------ -------
</TABLE>
REVENUE RECOGNITION AND SALES COMMITMENTS:
The Company recognizes revenue as its products are shipped to its customers.
The Company enters into agreements with its customers at the beginning of a
given vehicle's life to produce products. Once such agreements are entered into
by the Company, fulfillment of the customers' purchasing requirements is the
obligation of the Company for the entire production life of the vehicle, with
terms of up to seven years, and the Company has no provisions to terminate such
contracts. In certain instances, the Company may be committed under existing
agreements to supply product to its customers at selling prices which are not
sufficient to cover the direct cost to produce such product. In such situations,
the Company records a liability for the estimated future amount of such losses.
Such losses are recognized at the time that the loss is probable and reasonably
estimable and is recorded at the minimum amount necessary to fulfill the
Company's obligations to its customers.
INCOME TAXES:
The Company accounts for income taxes following the provisions of Statement
of Financial Accounting Standards ("SFAS") No. 109, which requires recognition
of deferred tax assets and
F-133
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2. SIGNIFCANT ACCOUNTING POLICIES: (CONTINUED)
liabilities for the expected future tax consequences of events that have been
included in the financial statements or tax returns. Under this method, deferred
tax assets and liabilities are determined based on the difference between the
financial statement and tax bases of assets and liabilities using currently
enacted tax rates.
COMPREHENSIVE INCOME:
Effective January 1, 1998, the Company adopted the provisions of SFAS No.
130, "Reporting Comprehensive Income." This statement established standards for
reporting and display of comprehensive income and its components. Comprehensive
income reflects the change in equity of a business enterprise during a period
from transactions and other events and circumstances from non-owner sources. For
the Company, comprehensive income represents net income adjusted for foreign
currency translation adjustments. In accordance with SFAS No. 130, the Company
has chosen to disclose comprehensive income in the consolidated statements of
stockholders' investment. Prior years have been restated to conform to the SFAS
No. 130 requirements.
FAIR VALUE OF FINANCIAL INSTRUMENTS:
The carrying amount of cash and cash equivalents, accounts receivable,
accounts payable and revolving credit facilities approximates fair value because
of the short maturity of these instruments. The carrying amount of the Company's
long-term debt approximates fair value because of the variability of the
interest cost associated with these instruments. The Notes were recorded at fair
value in connection with the Dura acquisition in April 1998, and the Company
believes there has been no material change in the estimated fair value since
such date.
SEGMENT REPORTING:
In 1998, the Company adopted SFAS No. 131, "Disclosure About Segments of an
Enterprise and Related Information." SFAS No. 131 supersedes SFAS No. 14,
replacing the "industry segment" approach with the "management" approach. The
management approach designates the internal organization that is used by
management for making operating decisions and assessing performance as the
source of the Company's reportable segments. SFAS No. 131 also requires
disclosures about products and services, geographic areas and major customers.
The adoption of SFAS No. 131 did not affect results of operations or financial
position but did affect the disclosure of segment information (see Note 5).
USE OF ESTIMATES:
The preparation of consolidated 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 revenues and expenses during the
reporting period. Ultimate results could differ from those estimates.
F-134
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2. SIGNIFCANT ACCOUNTING POLICIES: (CONTINUED)
FOREIGN CURRENCY TRANSLATION:
Assets and liabilities of the Company's foreign operations are translated
using the year-end rates of exchange. Results of operations are translated using
the average rates prevailing throughout the period. Translation gains or losses
are accumulated as a separate component of stockholders' investment.
RECLASSIFICATIONS:
Certain amounts in the prior period financial statements have been
reclassified to conform to the current presentation. These reclassifications
were not material to the Company's financial position or results of operations.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS:
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities," effective for
years beginning after June 15, 1999. SFAS No. 133 establishes accounting and
reporting standards requiring that every derivative instrument, including
certain derivative instruments embedded in other contracts, be recorded in the
balance sheet as either an asset or liability measured at its fair value. SFAS
No. 133 requires that changes in the derivative's fair value be recognized
currently in earnings unless specific hedge criteria are met. Special accounting
for qualifying hedges allow a derivative's gains or losses to offset related
results on the hedged item in the income statement and requires that a company
must formally document, designate and assess the effectiveness of transactions
that receive hedge accounting. The Company has not yet quantified the impacts of
adopting SFAS No. 133 and has not yet determined the timing of adoption.
In April 1998, the Financial Accounting Standards Board issued Statement of
Position (SOP) No. 98-5, "Reporting on the Costs of Start-Up Activities,"
effective for fiscal years beginning after December 15, 1998. SOP 98-5 requires
the expensing of start-up activities as incurred, versus capitalizing and
expensing them over a period of time. The Company will adopt this new
pronouncement in the first quarter of 1999 and does not estimate a material
impact upon adoption.
3. DEBT:
Debt consisted of the following (in thousands):
<TABLE>
<CAPTION>
COMPANY FKI
------------ PREDECESSOR
DECEMBER 31, --------------
1998 MARCH 31, 1998
------------ --------------
<S> <C> <C>
Bank Credit Agreement:
Term loan...................................................... $ 43,500 $ 50,000
Revolving credit facility...................................... 18,894 2,800
Capital leases................................................. 314 --
Notes.......................................................... 81,150 75,000
------------ --------------
143,858 127,800
Less--current portion.......................................... (7,059) (1,500)
------------ --------------
Total long-term debt........................................... $ 136,799 $ 126,300
------------ --------------
------------ --------------
</TABLE>
F-135
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
3. DEBT: (CONTINUED)
Future maturities of long-term debt as of December 31, 1998 are as follows
(in thousands):
<TABLE>
<S> <C>
1999.............................................................. $ 7,059
2000.............................................................. 7,525
2001.............................................................. 11,529
2002.............................................................. 12,529
Thereafter........................................................ 81,293
---------
$ 143,858
---------
---------
</TABLE>
On April 30, 1998, in connection with the Dura Acquisition, Dura and the
Company entered into a new $402.5 million credit agreement (the "Credit
Agreement"). This Credit Agreement was used to replace the Company's credit
facility. The Credit Agreement provided Dura with total revolving credit
facilities of $225 million, term loans of $100 million, an acquisition facility
of $30 million and a twelve-month interim loan of $47.5 million. The Credit
Agreement made available to the Company, as a sub-facility, a $50 million term
loan, a $25 million revolving credit and letter-of-credit facility and a $30
million acquisition facility (the "Trident Sub-Facility"). The Credit Agreement
has a term of five years and borrowings bear interest at the lender's reference
rate or the Eurocurrency rate. The interest rate on borrowings outstanding under
the Trident Sub Facility ranged from 5.775% to 7.9625% as of December 31, 1998.
The Credit Agreement requires the Company to maintain certain financial ratios
including minimum liquidity and interest coverage. Pursuant to the terms of the
Credit Agreement, Dura and certain of its subsidiaries will provide guarantees
and collateral to support obligations owing under the Trident Sub-Facility; but,
so long as the Notes remain outstanding, neither the Company nor any of its
subsidiaries have guaranteed any obligations that are not borrowed pursuant to
the Trident Sub-Facility. Under the terms of the Credit Agreement, an event of
default by Dura also causes an event of default under the Trident Sub-Facility.
The Company and Dura were in compliance with the covenants as of December 31,
1998. The assets of the Company have been pledged as collateral to secure
borrowings under the Trident Sub-Facility.
The Trident Sub-Facility provides the Company with the ability to denominate
its revolving credit borrowings in foreign currencies. As of December 31, 1998,
$51.6 million of borrowings were denominated in U.S. dollars, $4.7 million were
denominated in British pound sterling, $1.4 million were denominated in Canadian
dollars and $4.7 million were denomination in French francs.
The Notes, with a face value of $75 million, were issued on December 12,
1997, concurrent with the FKI Acquisition, and are due in December 2005.
Interest is payable semi-annually on June 15 and December 15 of each year. As
further discussed in Note 9, the Notes are guaranteed by certain subsidiaries of
the Company. The Notes were recorded at their fair value of $81.150 million as
part of the Dura Acquisition. The premium in excess of face value will be
amortized over the life of the Notes using the effective interest method. The
Notes contain various restrictive covenants which the Company was in compliance
with as of December 31, 1998.
The Dura Acquisition constituted a change of control as defined by the
Company's Notes Indenture (the "Indenture"). Upon the occurrence of a change of
control, each holder of the Notes may require the Company to repurchase all or
any part of the Notes held by such holder at an offer price in cash equal to
101% of the aggregate principal amount thereof, plus accrued interest and other
F-136
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
3. DEBT: (CONTINUED)
specified costs to the date of repurchase. Pursuant to the terms of the
Indenture, Dura initiated a change of control offer to the holders of the Notes
on May 8, 1998. No holders tended their Notes.
Subsequent to year-end, Dura and the Company entered into a new credit
facility (the "New Credit Facility"). The New Credit Facility provides for
borrowings aggregating up to approximately $1.15 billion, including a $275
million term loan A, a $275 million term loan B, a $400 million revolving credit
facility and a $200 million interim term loan. The New Credit Facility contains
the same sub-facilities for Trident as the Credit Agreement.
4. INCOME TAXES:
The provision for income taxes consisted of the following (in thousands):
<TABLE>
<CAPTION>
FKI
PREDECESSOR
TRIDENT ---------------
PREDECESSOR PERIOD FROM
COMPANY ------------- INCEPTION
------------- ONE MONTH (SEPT. 19,
EIGHT MONTH PERIOD ENDED 1997)
PERIOD ENDED APRIL 30, TO MAR. 31,
DEC. 31, 1998 1998 1998
------------- ------------- ---------------
<S> <C> <C> <C>
Current............................................................ $ (1,116) $ 25 $ 3,370
Deferred........................................................... 5,200 (1,681) (2,865)
------------- ------------- ------
Total............................................................ $ 4,084 $ (1,656) $ 505
------------- ------------- ------
------------- ------------- ------
</TABLE>
A reconciliation of the provision for income taxes at the U.S. statutory
rates of 35% to the reported income tax provision is as follows (in thousands):
<TABLE>
<CAPTION>
TRIDENT FKI
PREDECESSOR PREDECESSOR
COMPANY ------------- -----------------
------------- ONE MONTH PERIOD FROM
EIGHT MONTH PERIOD ENDED INCEPTION
PERIOD ENDED APRIL 30, (SEPT. 19, 1997)
DEC. 31, 1998 1998 TO MAR. 31, 1998
------------- ------------- -----------------
<S> <C> <C> <C>
Federal provision at statutory rates............................... $ 3,461 $ (1,630) $ 220
State taxes, net of federal benefit................................ -- -- 15
Foreign provision in excess of U.S. tax rate....................... 29 (164) 155
Unbenefitted foreign losses........................................ 793 79 --
Other.............................................................. (199) 59 115
------------- ------------- -----
Total............................................................ $ 4,084 $ (1,656) $ 505
------------- ------------- -----
------------- ------------- -----
</TABLE>
F-137
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
4. INCOME TAXES: (CONTINUED)
A summary of deferred tax assets (liabilities) is as follows (in thousands):
<TABLE>
<CAPTION>
FKI
COMPANY PREDECESSOR
------------ -----------
DECEMBER 31, MARCH 31,
1998 1998
------------ -----------
<S> <C> <C>
Net operating loss carryforwards...................................................... $ 3,705 $ --
Accrued plant closure and consolidation costs......................................... 11,120 3,281
Inventory valuation adjustments....................................................... -- 1,503
Capitalized reserves and accruals..................................................... 814 2,894
Long-term basis differences, including goodwill....................................... (13,493) --
Other................................................................................. -- 439
------------ -----------
$ 2,146 $ 8,117
------------ -----------
------------ -----------
</TABLE>
5. GEOGRAPHIC AND PRODUCT LINE INFORMATION:
In 1998, the Company adopted SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information." The Company manufactures engineered
mechanisms for the global automotive industry and operates in a single
reportable business segment, automotive products. The Company internally
evaluates its business principally by product category; however, because of the
similar economic characteristics of the operations, including the nature of
products, production processes and customers, those operations have been
aggregated following the provisions of SFAS No. 131 for segment reporting
purposes.
The following is a summary of revenues and long-lived assets by geographic
location (in thousands):
<TABLE>
<CAPTION>
EIGHT MONTH PERIOD ONE MONTH PERIOD ENDED PERIOD FROM INCEPTION
ENDED (SEPTEMBER 19, 1997)
DECEMBER 31, 1998 APRIL 30, 1998 TO MARCH 31, 1998
---------------------- ---------------------- ----------------------
LONG-LIVED LONG-LIVED LONG-LIVED
REVENUES ASSETS REVENUES ASSETS REVENUES ASSETS
--------- ----------- --------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
North America........................... $ 122,472 $ 32,643 $ 18,150 $ 37,987 $ 58,513 $ 38,499
Europe.................................. 58,574 22,041 7,384 23,305 24,717 23,386
Other foreign countries................. $ 6,480 $ 2,648 $ 941 $ 2,601 3,112 2,988
--------- ----------- --------- ----------- --------- -----------
$ 187,526 $ 57,332 $ 26,475 $ 63,893 $ 86,342 $ 64,873
--------- ----------- --------- ----------- --------- -----------
--------- ----------- --------- ----------- --------- -----------
</TABLE>
Revenues are attributed to geographic locations based on the location of
product production.
F-138
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
5. GEOGRAPHIC AND PRODUCT LINE INFORMATION: (CONTINUED)
The following is a summary of the approximate composition by product
category of the Company's revenues (in thousands):
<TABLE>
<CAPTION>
PERIOD FROM
EIGHT-MONTH ONE-MONTH INCEPTION
PERIOD ENDED PERIOD ENDED (SEPTEMBER 19,
DEC. 31, APRIL 30, 1997)
1998 1998 TO MARCH 31, 1998
------------ ------------- -------------------
<S> <C> <C> <C>
Automotive fixtures............................................ $ 50,222 $ 7,179 $ 23,912
Automotive cables.............................................. 137,304 19,296 62,430
------------ ------------- -------
$ 187,526 $ 26,475 $ 86,342
------------ ------------- -------
------------ ------------- -------
</TABLE>
The Company sells its products directly to automobile manufacturers.
Customers that accounted for a significant portion of consolidated revenues in
the eight month period ended December 31, 1998, the one month period ended April
30, 1998 and the period from inception (September 19, 1997) to March 31, 1998
were as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1998 APRIL 30, 1998 MARCH 31, 1998
----------------------- ----------------- -------------------
<S> <C> <C> <C>
Ford........................................................... 16% 16% 16%
GM............................................................. 17 17 17
DaimlerChrysler................................................ 19 19 19
</TABLE>
As of December 31, 1998 and March 31, 1998, receivables from these customers
represented 42% and 45% of total accounts receivable.
6. EMPLOYEE BENEFIT PLANS:
PENSION PLANS AND POSTRETIREMENT BENEFITS:
The Company sponsors six defined benefit pension plans which cover certain
hourly and salary employees. The Company's policy is to make annual
contributions to the plans to fund the normal cost and the unfunded frozen
initial liability over 11.5 years. In addition, the Company has various
postretirement medical benefit plans for certain employee groups and has
recorded a liability for its estimated obligation under these plans.
F-139
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
6. EMPLOYEE BENEFIT PLANS: (CONTINUED)
The change in benefit obligation and plan assets consisted of the following
(in thousands):
<TABLE>
<CAPTION>
POSTRETIREMENT BENEFITS
PENSION BENEFITS OTHER THAN PENSIONS
------------------------- -------------------------
DECEMBER 31, MARCH 31, DECEMBER 31, MARCH 31,
1998 1998 1998 1998
------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
CHANGE IN BENEFIT OBLIGATION:
Benefit obligation at beginning of the period................ $ 23,926 $ 22,911 $ 9,473 $ 9,374
Service cost................................................. 1,287 526 166 69
Interest cost................................................ 1,264 519 506 209
Plan participants' contributions............................. -- 29 -- --
Actuarial gain............................................... 4,672 -- 1,994 --
Acquisition of Trident....................................... -- -- -- --
Benefits paid................................................ -- (59) (616) (179)
------------ ----------- ------------ -----------
Benefit obligation at end of the period...................... $ 31,149 $ 23,926 $ 11,523 $ 9,473
------------ ----------- ------------ -----------
------------ ----------- ------------ -----------
CHANGE IN PLAN ASSETS:
Fair value at plan assets at beginning of the period......... 21,258 20,625 -- --
Actual return on plan assets................................. 1,312 604 -- --
Acquisition of Trident....................................... -- -- -- --
Employer contributions....................................... 344 59 -- --
Plan participants contributions.............................. -- 29 -- --
Benefits paid................................................ -- (59) -- --
------------ ----------- ------------ -----------
Fair value of plan assets at end of the period............... $ 22,914 $ 21,258 $ -- $ --
------------ ----------- ------------ -----------
------------ ----------- ------------ -----------
</TABLE>
All of the Company's plans have benefit obligations in excess of their
respective plan assets. The funded status of the Company's plans is as follows
(in thousands):
<TABLE>
<CAPTION>
POSTRETIREMENT
BENEFITS
PENSION BENEFITS OTHER THAN PENSIONS
------------------------ ----------------------
DEC. 31, MARCH 31, DEC. 31, MARCH 31,
1998 1998 1998 1998
----------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Funded status
Unrecognized actuarial gain.......................................... $ 8,235 $ 2,668 $ 11,523 $ 9,473
Unrecognized prior service cost...................................... -- -- (1,995) --
Adjustment to recognize minimum liability............................ -- -- -- --
----------- ----------- --------- -----------
Accrued benefit cost................................................. $ 8,235 $ 2,668 $ 9,528 $ 9,473
----------- ----------- --------- -----------
----------- ----------- --------- -----------
</TABLE>
F-140
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
6. EMPLOYEE BENEFIT PLANS: (CONTINUED)
The following weighted average assumptions were used to account for the
plans:
<TABLE>
<CAPTION>
POSTRETIREMENT BENEFITS
PENSION BENEFITS OTHER THAN PENSIONS
-------------------------- ------------------------
DEC. 31, MARCH 31, DEC. 31, MARCH 31,
1998 1998 1998 1998
------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Discount rate.......................................... 5.750-7.375% 6.00-6.375% 6.75-7.375% 7.375%
Expected return on plan assets......................... 9-9.5% 9-9.5% N/A N/A
Rate of compensation increase.......................... 4-6% 4.5-6% N/A N/A
</TABLE>
For measurement purposes, a 7% annual rate of increase in the per capita
cost of covered health care benefits was assumed for 1998. The rate was assumed
to decrease .5% per year in 1999 to 5% in 2003.
The components of net periodic benefit costs are as follows (amounts in
thousands):
<TABLE>
<CAPTION>
POSTRETIREMENT BENEFITS
PENSION BENEFITS OTHER THAN PENSIONS
-------------------------------- ------------------------------------
PERIOD FROM PERIOD FROM
INCEPTION INCEPTION
(SEPT. 19, (SEPT. 19,
NINE MONTH PERIOD 1997) 1997)
ENDED DEC. 31, TO MARCH 31, NINE MONTH PERIOD TO MARCH 31,
1998 1998 ENDED DEC. 31, 1998 1998
----------------- ------------- ------------------- ---------------
<S> <C> <C> <C> <C>
Service cost..................... $ 1,287 $ 526 166 $ 69
Interest cost.................... 1,264 519 506 209
Expected return on plan assets... (1,464) (603) -- --
Amortization of prior service
cost........................... -- -- -- --
Recognized actuarial (gain)
loss........................... -- -- -- --
------- ----- ----- -----
Net periodic benefit cost........ $ 1,087 $ 442 $ 672 $ 278
------- ----- ----- -----
------- ----- ----- -----
</TABLE>
Assumed health care cost trend rates have a significant effect on the
amounts reported for the post retirement medical benefit plans. A one
percentage-point change in assumed health care cost trend rates would have the
following effects:
<TABLE>
<CAPTION>
1-PERCENTAGE-POINT 1-PERCENTAGE-POINT
INCREASE DECREASE
------------------- -------------------
<S> <C> <C>
Effect on total of service and interest cost
components............................................ $ 13 $ (12)
----- -----
----- -----
Effect on the post retirement benefit obligation........ $ 182 $ (164)
----- -----
----- -----
</TABLE>
F-141
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
7. COMMITMENTS AND CONTINGENCIES:
LEASES:
The Company leases office and manufacturing space and certain equipment
under operating lease agreements which require it to pay maintenance, insurance,
taxes and other expenses in addition to annual rentals. Future annual rental
commitments at December 31, 1998 under these operating leases are as follows (in
thousands):
<TABLE>
<CAPTION>
YEAR AMOUNT
- --------------------------------------- ---------
<S> <C>
1999................................... $ 2,153
2000................................... 2,099
2001................................... 1,998
2002................................... 1,779
2003................................... 1,642
Thereafter............................. 1,425
</TABLE>
LITIGATION:
The Company is from time to time subject to various legal actions and claims
incidental to its business, including those arising out of alleged defects,
product warranties, employment-related matters and environmental matters.
Litigation is subject to many uncertainties, and the outcome of individual
litigated matters is not predictable with assurance. After discussions with
counsel, it is the opinion of management that the Company has provided adequate
reserves to cover these matters, and the ultimate outcome of such matters will
not have a material adverse impact on the consolidated financial position,
results of operations or cash flows of the Company.
8. COMBINED HISTORICAL FINANCIAL RESULTS (UNAUDITED):
The results of operations for the nine months ended December 31, 1997 were
as follows:
<TABLE>
<S> <C>
Revenues.......................................... $ 219,465
Gross profit...................................... 35,740
Net income........................................ 5,339
</TABLE>
These represent the results of operations for the historical period under
FKI ownership from April 1, 1997 to December 12, 1997, combined with the results
of the Company for the period from December 13, 1997 to December 31, 1997.
9. RELATED PARTY TRANSACTIONS:
In December 1998, the Company sold its investment in its German subsidiary
to Dura for approximately $4 million. The selling price was based on book value
and, therefore, no gain or loss resulted from the sale.
In December 1998, the Company purchased 100% of the common stock of the
French brake subsidiary of Dura at book value. The Company paid approximately
$45,000 in cash and assumed $4.9 million in debt.
F-142
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
9. RELATED PARTY TRANSACTIONS: (CONTINUED)
Dura provides certain services on behalf of the Company. These services
include accounting and treasury functions, maintenance of management information
systems, legal services and assistance with other legal matters. Dura does not
charge Trident for any of these services.
10. SUBSEQUENT EVENT (UNAUDITED):
On June 24, 1999, the Company completed a cash tender offer related to the
Notes. The total consideration paid was approximately $84 million in Note
principal and premium and was funded through borrowings under the Dura Credit
Agreement. The Company will record an extraordinary loss on the early
extinguishment of debt, net of income tax benefit, of $2.7 million in the second
quarter of 1999.
11. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION:
The following consolidating financial information presents balance sheet,
statement of operations and cash flow information related to the Company's
businesses. Each Guarantor is a direct or indirect wholly owned subsidiary of
Trident Automotive plc and has fully and unconditionally guaranteed the Notes,
on a joint and several basis. The Company has not presented separate financial
statements and other disclosures concerning the Guarantors because management
believes that such information is not material.
F-143
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
11. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION: (CONTINUED)
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEETS AS OF DECEMBER 31, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
NON-
TRIDENT GUARANTOR GUARANTOR
AUTOMOTIVE PLC COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
-------------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents.................. $ 272 $ 1,719 $ 6,377 $ -- $ 8,368
Accounts receivable, net................... -- 40,217 15,518 -- 55,735
Inventories................................ -- 12,265 3,493 -- 15,758
Due from affiliates........................ 649 18,708 707 (20,064) --
Other current assets....................... -- 16,995 4,286 -- 21,281
-------------- ----------- ----------- ------------ ------------
Total current assets................... 921 89,904 30,381 (20,064) 101,142
Property, Plant and Equipment, net........... -- 48,223 9,109 -- 57,332
Note Receivable From Subsidiaries............ -- 27,032 -- (27,032) --
Deferred Financing Costs..................... -- -- -- -- --
Investment in Subsidiaries................... 163,815 12,145 -- (175,960) --
Goodwill, net................................ 74,896 119,542 25,763 (4,776) 215,425
Other Assets, net............................ 4,236 3,368 1,470 -- 9,074
-------------- ----------- ----------- ------------ ------------
$ 243,868 $ 300,214 $ 66,723 $ (227,832) $ 382,973
-------------- ----------- ----------- ------------ ------------
-------------- ----------- ----------- ------------ ------------
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current Liabilities:
Current portion of long-term debt.......... $ 7,059 $ -- $ -- $ -- $ 7,059
Accounts payable........................... -- 22,878 10,918 -- 33,796
Accrued expenses........................... 1,903 44,859 7,316 (10) 54,068
Due to affiliates.......................... 18,344 351 1,359 (20,054) --
-------------- ----------- ----------- ------------ ------------
Total current liabilities.............. 27,306 68,088 19,593 (20,064) 94,923
-------------- ----------- ----------- ------------ ------------
Non-Current Liabilities:
Long-term debt, less current portion....... 121,650 15,123 226 -- 136,799
Note payable to Parent..................... (3,476) 649 31,495 (28,668) --
Accrued pension and other postretirement
liabilities.............................. -- 11,891 1,066 -- 12,957
Other noncurrent liabilities............... -- 34,767 2,433 -- 37,200
-------------- ----------- ----------- ------------ ------------
Total liabilities...................... 145,480 130,318 54,813 (48,732) 281,879
-------------- ----------- ----------- ------------ ------------
Minority Interest in Subsidiary Company...... -- -- 786 -- 786
Stockholders' Investment..................... 98,388 169,896 11,124 (179,100) 100,308
-------------- ----------- ----------- ------------ ------------
$ 243,868 $ 300,214 $ 66,723 $ (227,832) $ 382,973
-------------- ----------- ----------- ------------ ------------
</TABLE>
F-144
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
11. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION: (CONTINUED)
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
CONSOLIDATING STATEMENTS OF OPERATIONS FOR THE EIGHT-MONTH PERIOD ENDED
DECEMBER 31, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
NON-
TRIDENT GUARANTOR GUARANTOR
AUTOMOTIVE PLC COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
--------------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues..................................... $ -- $ 151,568 $ 42,232 $ (6,274) $ 187,526
Cost of sales................................ -- 123,499 34,077 (6,274) 151,302
------ ----------- ----------- ------------ ------------
Gross profit............................... -- 28,069 8,155 -- 36,224
Selling, general and administrative
expenses................................... 31 9,953 4,332 (2) 14,314
Amortization expense......................... 1,451 2,349 517 (81) 4,236
------ ----------- ----------- ------------ ------------
Operating income (loss).................... (1,482) 15,767 3,306 83 17,674
Interest expense............................. (7,389) (309) (249) -- (7,947)
Interest expense-intercompany................ -- (5,746) (1,088) 6,834 --
Interest income.............................. -- 112 132 -- 244
Interest income--intercompany................ 1 6,753 -- (6,754) --
Exchange gain (loss)......................... -- -- -- -- --
Equity in net income of subsidiary........... 10,596 1,083 -- (11,679) --
Other income (expense)....................... -- -- -- (82) (82)
------ ----------- ----------- ------------ ------------
Net income (loss) before provision for
income taxes and minority interest....... 1,726 17,660 2,101 (11,598) 9,889
Provision (benefit) for income taxes......... (2,230) 5,145 1,169 -- 4,084
Minority interest in profit of subsidiary.... -- -- (71) -- (71)
------ ----------- ----------- ------------ ------------
Net income (loss).......................... $ 3,956 $ 12,515 $ 1,003 $ (11,598) $ 5,876
------ ----------- ----------- ------------ ------------
------ ----------- ----------- ------------ ------------
</TABLE>
F-145
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
11. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION: (CONTINUED)
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE EIGHT-MONTH PERIOD ENDED
DECEMBER 31, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
NON-
TRIDENT GUARANTOR GUARANTOR
AUTOMOTIVE PLC COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
-------------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss).......................... $ 3,956 $ 12,515 $ 1,003 $ (11,598) $ 5,876
Adjustments to reconcile net income
(loss) to net cash provided by (used
in) operating activities
Depreciation and amortization.......... 1,451 6,344 1,787 -- 9,582
Loss (income) from investment in
subsidiaries......................... (10,596) (1,083) -- 11,679 --
Exchange gain (loss)................... -- -- -- -- --
Minority interest...................... -- -- (71) -- (71)
Deferred taxes......................... (3,254) 9,143 (689) -- 5,200
Due to/from affiliates................. 17,277 (22,331) 3,965 1,089 --
Changes in other operating items....... (1,800) (27,185) (4,238) 960 (32,263)
------- ----------- ----------- ------------ ------------
Net cash provided by (used in)
operating activities............... 7,034 (22,597) 1,757 2,130 (11,676)
------- ----------- ----------- ------------ ------------
INVESTING ACTIVITIES:
Capital expenditures, net................ -- (6,913) (1,945) (81) (8,939)
Acquisition and sale of subsidiaries..... -- 8,454 (8) -- 8,446
------- ----------- ----------- ------------ ------------
Net cash provided by (used in) investing
activities............................. -- 1,541 (1,953) (81) (493)
------- ----------- ----------- ------------ ------------
FINANCING ACTIVITIES:
Proceeds from issuance of long-term
debt................................... 50,000 -- -- -- 50,000
Proceeds from borrowings under revolving
credit facility........................ (3,200) 14,906 -- -- 11,706
Repayment of debt........................ (52,800) -- -- -- (52,800)
------- ----------- ----------- ------------ ------------
Net cash provided by (used in)
financing activities................. (6,000) 14,906 -- -- 8,906
------- ----------- ----------- ------------ ------------
EFFECT OF EXCHANGE RATES ON CASH........... (810) 928 1,121 (2,049) (810)
------- ----------- ----------- ------------ ------------
NET CHANGE IN CASH AND CASH EQUIVALENTS.... 224 (5,222) 925 -- (4,073)
CASH AND CASH EQUIVALENTS, beginning of
period................................... 48 6,941 5,452 -- 12,441
------- ----------- ----------- ------------ ------------
CASH AND CASH EQUIVALENTS, end of period... $ 272 $ 1,719 $ 6,377 $ -- $ 8,368
------- ----------- ----------- ------------ ------------
------- ----------- ----------- ------------ ------------
</TABLE>
F-146
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
11. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION: (CONTINUED)
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEETS AS OF APRIL 30, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
NON-
TRIDENT GUARANTOR GUARANTOR
AUTOMOTIVE PLC COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
-------------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents................. $ 48 $ 6,941 $ 5,452 $ -- $ 12,441
Accounts receivable, net.................. -- 35,046 15,337 -- 50,383
Inventories............................... -- 14,410 3,813 -- 18,223
Due from affiliates....................... 2,292 7,303 480 (10,075) --
Other current assets...................... 997 2,703 3,204 -- 6,904
-------------- ----------- ----------- ------------ ------------
Total current assets.................... 3,337 66,403 28,286 (10,075) 87,951
Property, Plant and Equipment, net.......... -- 52,562 11,331 63,893
Note Receivable from Subsidiaries........... -- 22,281 -- (22,281) --
Deferred Financing Costs.................... 6,527 -- -- -- 6,527
Investment in Subsidiaries.................. 154,041 14,301 -- (168,342) --
Goodwill, net............................... 3,789 65,105 22,640 -- 91,534
Other Assets, net........................... -- 13,585 666 -- 14,251
-------------- ----------- ----------- ------------ ------------
$ 167,694 $ 234,237 $ 62,923 $ (200,698) $ 264,156
-------------- ----------- ----------- ------------ ------------
-------------- ----------- ----------- ------------ ------------
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current Liabilities:
Current portion of long-term debt......... $ 1,500 $ -- $ -- $ -- $ 1,500
Accounts payable.......................... -- 28,988 9,128 -- 38,116
Accrued expenses.......................... 4,119 23,253 9,133 503 37,008
Due to affiliates......................... 3,532 2,121 884 (6,537) --
-------------- ----------- ----------- ------------ ------------
Total current liabilities............... 9,151 54,362 19,145 (6,034) 76,624
Non-Current Liabilities:
Long-term debt, less current portion...... 127,000 -- -- -- 127,000
Note payable to Parent.................... (3,476) 3,276 24,152 (23,952) --
Accrued pension and other postretirement
liabilities............................. -- 13,271 992 -- 14,263
Other noncurrent liabilities.............. -- 6,918 3,230 -- 10,148
Total liabilities....................... 132,675 77,827 47,519 (29,986) 228,035
-------------- ----------- ----------- ------------ ------------
Minority Interest in Subsidiary Company..... -- -- 1,101 -- 1,101
Stockholders' Investment.................... 35,019 156,410 14,303 (170,712) 35,020
-------------- ----------- ----------- ------------ ------------
$ 167,694 $ 234,237 $ 62,923 $ (200,698) $ 264,156
-------------- ----------- ----------- ------------ ------------
-------------- ----------- ----------- ------------ ------------
</TABLE>
F-147
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
11. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION: (CONTINUED)
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
CONSOLIDATING STATEMENTS OF OPERATIONS FOR THE ONE-MONTH PERIOD
ENDED APRIL 30, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
TRIDENT NON-
AUTOMOTIVE GUARANTOR GUARANTOR
PLC COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Revenues.............................. $ -- $ 20,931 $ 5,544 $ -- $ 26,475
Cost of sales......................... -- 21,474 4,710 -- 26,184
----------- ----------- ----------- ----------- -----------
Gross profit........................ -- (543) 834 -- 291
Selling, general and administrative
expenses............................ 16 3,228 765 -- 4,009
Amortization.......................... 47 266 76 -- 389
----------- ----------- ----------- ----------- -----------
Operating income.................... (63) (4,037) (7) -- (4,107)
Interest expense...................... (955) (1,188) (198) 1,365 (976)
Interest income....................... -- 1,376 8 (1,360) 24
Exchange (loss) gain.................. -- (267) 613 (5) 341
Equity in net earnings of
subsidiaries........................ (2,307) 385 -- 1,922 --
Other income.......................... -- 51 11 -- 62
----------- ----------- ----------- ----------- -----------
Income before provision for income
taxes............................. (3,325) (3,680) 427 1,922 (4,656)
Provision (benefit) for income
taxes............................... (394) (1,373) 111 -- (1,656)
Minority interest in profit of
subsidiary.......................... -- -- (69) -- (69)
----------- ----------- ----------- ----------- -----------
Net income.......................... $ (2,931) $ (2,307) $ 385 $ 1,922 $ (2,931)
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
</TABLE>
F-148
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
11. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION: (CONTINUED)
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE ONE-MONTH PERIOD ENDED
APRIL 30, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
TRIDENT NON-
AUTOMOTIVE GUARANTOR GUARANTOR
PLC COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss)................... $ (2,931) $ (2,307) $ 385 $ 1,922 $ (2,931)
Adjustments to reconcile net
income (loss) to net cash
provided by (used in) operating
activities--
Depreciation and amortization..... 47 1,183 226 -- 1,456
Loss (income) from investment in
subsidiaries.................... 2,307 (385) -- (1,922) --
Deferred income taxes............. -- (1,679) (2) -- (1,681)
Unrealized exchange gain (loss)... -- 267 (608) -- (341)
Minority interest................. -- -- (69) -- (69)
Changes in other operating
items........................... 52 5,639 843 362 6,896
------------- ----------- ----------- ----------- -----------
Net cash provided by (used in)
operating activities.......... (525) 2,718 775 362 3,330
------------- ----------- ----------- ----------- -----------
INVESTING ACTIVITIES:
Capital expenditures, net......... -- (2,293) (161) -- (2,454)
------------- ----------- ----------- ----------- -----------
FINANCING ACTIVITIES:
Proceeds from issuance of
long-term debt.................. -- -- -- -- --
Proceeds from borrowings under
revolving credit facility....... 2,000 -- -- -- 2,000
Repayment of debt................. (1,300) -- -- -- (1,300)
------------- ----------- ----------- ----------- -----------
Net cash provided by financing
activities.................... 700 -- -- -- 700
------------- ----------- ----------- ----------- -----------
EFFECT OF EXCHANGE RATES ON CASH.... (422) 216 18 (362) (550)
------------- ----------- ----------- ----------- -----------
NET CHANGE IN CASH AND CASH
EQUIVALENTS....................... (247) 641 632 -- 1,026
CASH AND CASH EQUIVALENTS, beginning
of period......................... 295 6,300 4,820 -- 11,415
------------- ----------- ----------- ----------- -----------
CASH AND CASH EQUIVALENTS, end of
period............................ $ 48 $ 6,941 $ 5,452 $ -- $ 12,441
------------- ----------- ----------- ----------- -----------
------------- ----------- ----------- ----------- -----------
</TABLE>
F-149
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
11. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION: (CONTINUED)
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEETS AS OF MARCH 31, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
TRIDENT NON-
AUTOMOTIVE GUARANTOR GUARANTOR
PLC COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents............. $ 295 $ 6,300 $ 4,820 $ -- $ 11,415
Accounts receivable, net.............. -- 34,330 14,545 -- 48,875
Inventories........................... -- 15,020 3,778 -- 18,798
Due from affiliates................... 4,592 5,207 1,394 (11,193) --
Other current assets.................. 603 6,589 3,334 -- 10,526
------------ ----------- ----------- ----------- -----------
Total current assets................ 5,490 67,446 27,871 (11,193) 89,614
------------ ----------- ----------- ----------- -----------
Property, Plant and Equipment, net...... -- 53,804 11,069 -- 64,873
Note Receivable from Subsidiaries....... -- 22,281 -- (22,281) --
Goodwill, net........................... 3,796 62,996 22,153 -- 88,945
Deferred financing lists................ 6,426 -- -- -- 6,426
Investment in subsidiaries.............. 158,232 13,984 -- (172,216) --
Other Assets, net....................... 11 7,571 1,390 -- 8,972
------------ ----------- ----------- ----------- -----------
$ 173,955 $ 228,082 $ 62,483 $(205,690) $ 258,830
------------ ----------- ----------- ----------- -----------
------------ ----------- ----------- ----------- -----------
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current Liabilities:
Current portion of long-term debt..... $ 1,500 $ -- $ -- $ -- $ 1,500
Accounts payable...................... -- 28,546 8,472 -- 37,018
Accrued expenses...................... 3,539 15,748 9,283 -- 28,570
Due to affiliates..................... 2,771 5,003 3,366 (11,140) --
------------ ----------- ----------- ----------- -----------
Total current liabilities........... 7,810 49,297 21,121 (11,140) $ 67,088
------------ ----------- ----------- ----------- -----------
Non-Current Liabilities:
Long-term debt, less current
portion............................. 126,300 -- -- -- 126,300
Note payable to Parent................ -- -- 22,278 (22,278) --
Accrued pension and other
postretirement liabilities.......... -- 11,920 971 -- 12,891
Other noncurrent liabilities.......... -- 8,300 3,236 -- 11,536
------------ ----------- ----------- ----------- -----------
Total liabilities................... 134,110 69,517 47,606 (33,418) 217,815
------------ ----------- ----------- ----------- -----------
Minority Interest in Subsidiary
Company............................... -- -- 1,170 -- 1,170
Redeemable U.S. Dollar Ordinary Shares.. 740 -- -- -- 740
Stockholders' Investment................ 39,105 158,565 13,707 (172,272) 39,105
------------ ----------- ----------- ----------- -----------
$ 173,955 $ 228,082 $ 62,483 $(205,690) $ 258,830
------------ ----------- ----------- ----------- -----------
------------ ----------- ----------- ----------- -----------
</TABLE>
F-150
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
11. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION: (CONTINUED)
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
CONSOLIDATING STATEMENTS OF OPERATIONS FOR THE PERIOD FROM INCEPTION
(SEPTEMBER 19, 1997) TO MARCH 31, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
NON-
TRIDENT GUARANTOR GUARANTOR
AUTOMOTIVE PLC COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
-------------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues....................................... $ -- $ 69,293 $ 17,755 $ (706) $ 86,342
Cost of sales.................................. -- 57,249 14,752 (706) 71,295
------- ----------- ----------- ------------ ------------
Gross profit................................. -- 12,044 3,003 -- 15,047
Selling, general and administrative expenses... 49 7,056 2,529 -- 9,634
------- ----------- ----------- ------------ ------------
Operating income............................. (49) 4,988 474 -- 5,413
Interest expense............................... 4,022 3,611 799 (4,340) 4,092
Interest income................................ (2,481) (1,932) (132) 4,340 (205)
Exchange loss.................................. -- 1 921 -- 922
Other income (expense)......................... (1,188) 792 (24) 396 (24)
------- ----------- ----------- ------------ ------------
Income before provision for income taxes..... (402) 2,516 (1,090) (396) 628
Provision (benefit) for income taxes........... (525) 1,328 (298) -- 505
Minority interest in profit of subsidiary...... -- -- -- -- --
------- ----------- ----------- ------------ ------------
Net income................................... $ 123 $ 1,188 $ (792) $ (396) $ 123
------- ----------- ----------- ------------ ------------
------- ----------- ----------- ------------ ------------
</TABLE>
F-151
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
11. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION: (CONTINUED)
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE PERIOD FROM INCEPTION
(SEPTEMBER 19, 1997) TO MARCH 31, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
NON-
TRIDENT GUARANTOR GUARANTOR
AUTOMOTIVE PLC COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
-------------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss)..................................... $ 123 $ 1,188 $ (792) $ (396) $ 123
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities-
Depreciation and amortization..................... 301 2,364 882 -- 3,547
(Income) loss from investment subsidiaries........ (1,188) 792 -- 396 --
Exchange gain..................................... -- 1 921 -- 922
Minority interest................................. -- -- (24) -- (24)
Changes in other operating items.................. (6,304) 6,763 1,134 53 1,646
-------------- ----------- ----------- ------------ ------------
Net cash provided by (used in) operating
activities.................................... (7,068) 11,108 2,121 53 6,214
-------------- ----------- ----------- ------------ ------------
INVESTING ACTIVITIES:
Capital expenditures, net........................... -- (6,279) (1,507) -- (7,786)
Purchase of Predecessor, net of cash acquired....... (3,315) (118,321) (33,854) -- (155,490)
Investment in subsidiaries.......................... (42,508) (15,897) -- 58,405 --
-------------- ----------- ----------- ------------ ------------
Net cash provided by (used in) investing
activities.................................... (45,823) (140,497) (35,361) 58,405 (163,276)
-------------- ----------- ----------- ------------ ------------
FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt............ 125,000 -- -- -- 125,000
Proceeds from borrowings on revolving credit
facility.......................................... 7,263 500 -- -- 7,763
Payments on revolving credit facility............... (4,463) (500) -- -- (4,963)
Receipt of capital from Investor Group.............. 42,585 -- -- -- 42,585
Equity fees paid to affiliates of Investor Group.... (1,500) -- -- -- (1,500)
Notes (issued to subsidiary) received from parent... (115,699) 91,983 23,716 -- --
Payments received (made) on intercompany notes...... -- 1,435 (1,435) -- --
Equity contribution from parent..................... -- 42,500 15,905 (58,405) --
-------------- ----------- ----------- ------------ ------------
Net cash provided by (used in) financing
activities.................................... 53,186 135,918 38,186 (58,405) 168,885
-------------- ----------- ----------- ------------ ------------
EFFECT OF EXCHANGE RATES ON CASH...................... -- (229) (126) (53) (408)
-------------- ----------- ----------- ------------ ------------
NET CHANGE IN CASH AND CASH EQUIVALENTS............... 295 6,300 4,820 -- 11,415
CASH AND CASH EQUIVALENTS, beginning of period........ -- -- --
----
-------------- ----------- ----------- ------------
------------
CASH AND CASH EQUIVALENTS, end of period.............. $ 295 $ 6,300 $ 4,820 $ -- $ 11,415
-------------- ----------- ----------- ------------ ------------
-------------- ----------- ----------- ------------ ------------
</TABLE>
F-152
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER
MARCH 31, 31,
1999 1998
----------- -----------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.......................................... $ 5,860 $ 8,368
Accounts receivable, net........................................... 47,479 55,735
Inventories........................................................ 14,380 15,758
Other current assets............................................... 23,393 21,281
----------- -----------
Total current assets............................................. 91,112 101,142
----------- -----------
Property, plant and equipment, net................................... 53,466 57,332
Goodwill, net........................................................ 213,617 215,425
Other assets, net.................................................... 11,240 9,074
----------- -----------
$ 369,435 $ 382,973
----------- -----------
----------- -----------
LIABILITIES AND STOCKHOLDER'S INVESTMENT
Current liabilities:
Current portion of long-term debt.................................. $ 59 $ 7,059
Accounts payable................................................... 29,597 33,796
Accrued expenses................................................... 49,781 54,068
----------- -----------
Total current liabilities........................................ 79,437 94,923
----------- -----------
Noncurrent liabilities:
Long-term debt, less current portion............................... 140,621 136,799
Accrued pension and other postretirement liabilities............... 12,654 12,957
Other noncurrent liabilities....................................... 38,240 37,200
----------- -----------
Total liabilities................................................ 270,952 281,879
----------- -----------
Minority interest in subsidiary company.............................. -- 786
Stockholder's investment:
Common stock--Sterling ordinary shares............................. 85 85
Common stock--U.S. dollar ordinary shares.......................... 17,000 17,000
Additional paid-in capital......................................... 78,157 78,157
Retained earnings.................................................. 7,420 5,876
Accumulated other comprehensive income--cumulative translation
adjustment (4,179) (810)
----------- -----------
Total stockholder's investment................................... 98,483 100,308
----------- -----------
$ 369,435 $ 382,973
----------- -----------
----------- -----------
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
balance sheets.
F-153
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS--UNAUDITED)
<TABLE>
<CAPTION>
FKI
COMPANY PREDECESSOR
------------------- -------------------
THREE MONTHS ENDED THREE MONTHS ENDED
MARCH 31, 1999 MARCH 31, 1998
------------------- -------------------
<S> <C> <C>
Revenues................................................................ $ 56,691 $ 86,342
Cost of sales........................................................... 46,562 71,295
------- -------
Gross profit.......................................................... 10,129 15,047
Selling, general and administrative expenses............................ 3,767 8,737
Amortization expense.................................................... 1,621 1,171
------- -------
Operating income...................................................... 4,741 5,139
Interest expense, net................................................... (2,624) (3,613)
Exchange gain (loss).................................................... 321 (922)
Other income............................................................ 135 24
------- -------
Income before provision for income taxes.............................. 2,573 628
Provision for income taxes.............................................. 1,029 505
------- -------
Net income............................................................ $ 1,544 $ 123
------- -------
------- -------
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
statements.
F-154
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS--UNAUDITED)
<TABLE>
<CAPTION>
FKI
COMPANY PREDECESSOR
---------------- ----------------
THREE MONTHS THREE MONTHS
ENDED ENDED
MARCH 31, 1999 MARCH 31, 1998
---------------- ----------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income.................................................................. $ 1,544 $ 123
Adjustments to reconcile net income to net cash provided by operating
activities--
Depreciation and amortization............................................. 3,731 3,547
Exchange (gain) loss...................................................... (321) 922
Minority interest......................................................... -- (24)
Changes in other operating items.......................................... (1,902) 1,646
-------- ----------------
Net cash provided by operating activities............................... 3,052 6,214
-------- ----------------
INVESTING ACTIVITIES:
Capital disposals (expenditures), net....................................... 467 (7,786)
Purchase of minority interest............................................... (1,508) --
Purchase of Predecessor, net................................................ -- (155,490)
-------- ----------------
Net cash used in investing activities................................... (1,041) (163,276)
-------- ----------------
FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt.................................... -- 75,000
Proceeds from borrowings under credit facility.............................. 72,332 57,763
Repayment of debt........................................................... (75,518) (4,963)
Receipt of capital from Investor Group...................................... -- 42,585
Equity fees paid to affiliates of Investor Group............................ -- (1,500)
-------- ----------------
Net cash provided by (used in) financing activities..................... (3,186) 168,885
-------- ----------------
EFFECT OF EXCHANGE RATES ON CASH.............................................. (1,333) (408)
-------- ----------------
NET CHANGE IN CASH AND CASH EQUIVALENTS....................................... (2,508) 11,415
CASH AND CASH EQUIVALENTS, beginning of period................................ 8,368 --
-------- ----------------
CASH AND CASH EQUIVALENTS, end of period...................................... $ 5,860 $ 11,415
-------- ----------------
-------- ----------------
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
statements.
F-155
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. The accompanying condensed consolidated financial statements have been
prepared by Trident Automotive plc (the "Company") without audit, pursuant
to the rules and regulations of the Securities and Exchange Commission. The
information furnished in the condensed consolidated financial statements
includes normal recurring adjustments and reflects all adjustments which
are, in the opinion of management, necessary for a fair presentation of such
financial statements. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to
such rules and regulations. Although the Company believes that the
disclosures are adequate to make the information presented not misleading,
it is suggested that these condensed consolidated financial statements be
read in conjunction with the audited financial statements and the notes
thereto included in the Company's Annual Report on Form 10-K for its fiscal
year ended December 31, 1998.
Revenues and operating results for the three months ended March 31, 1999,
are not necessarily indicative of the results to be expected for the full
year.
2. The Company, incorporated in the United Kingdom, and its subsidiaries were
formed on September 19, 1997 to acquire the net assets of the FKI Automotive
Group from FKI plc (the "FKI Acquisition"). The FKI Acquisition occurred on
December 12, 1997. The aggregate purchase price, including transaction
costs, was approximately $170 million. The FKI Acquisition was financed with
$42.5 million in equity contributions, $75 million in proceeds from a
private placement of the Company's 10% Senior Subordinated Notes due 2005
(the "Notes") and borrowings under a $105 million secured credit facility.
On April 30, 1998, Dura UK, Ltd. ("Dura Ltd.") acquired the Company. Dura
Ltd. is a wholly owned subsidiary of Dura Automotive Systems, Inc., a
Delaware corporation, which is a leading designer and manufacturer of driver
control systems, engineered mechanical components and cable-related systems
for the global automotive industry.
The Dura Acquisition constituted a change of control as defined by the
Company's Notes Indenture ("Indenture"). Upon the occurrence of a change of
control, each holder of the Notes may require the Company to repurchase all
or any part of the Notes held by such holder at an offer price in cash equal
to 101% of the aggregate principal amount thereof, plus accrued interest and
other specified costs to the date of repurchase. Pursuant to the terms of
the Indenture, Dura initiated a change of control offer to the holders of
the Notes on May 8, 1998. No holders tended their Notes.
The FKI and Dura Acquisitions were accounted for using the purchase method
of accounting and, accordingly, the assets acquired and liabilities assumed
have been recorded at their fair values as of the dates of the acquisitions.
The excess of the purchase price over the fair value of the assets acquired
and liabilities assumed has been recorded as goodwill and is being amortized
over 40 years. The assets acquired and liabilities have been recorded based
upon preliminary estimates of fair value as of the dates of acquisition. The
Company does not believe the final allocation of purchase price will be
materially different from preliminary allocations. Any changes to the
preliminary estimates will be reflected as an adjustment to goodwill.
Additional purchase liabilities recorded in conjunction with these
acquisitions included approximately $44 million for costs associated with
the shutdown and consolidation of certain acquired facilities and $15
million for associated severance and other related costs. At March 31, 1999,
liabilities for approximately $29.5 million for costs associated with the
shutdown and consolidation of certain acquired facilities
F-156
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
and $12.5 million in severance costs are recorded on the condensed
consolidated balance sheet. No additional reserves were recorded during the
first quarter of 1999. Results of operations for these acquisitions have
been included in the accompanying condensed consolidated financial
statements since the dates of acquisition.
Included in these reserves are amounts associated with businesses to be
exited in conjunction with the acquisition by Dura. The accompanying
consolidated statements of operations include revenues and operating income
from these businesses as follows (in thousands):
<TABLE>
<CAPTION>
PERIOD ENDED
-------------------------------
MARCH 31, 1999 MARCH 31, 1998
--------------- --------------
<S> <C> <C>
Revenues..................................................... $ 8,650 $ 23,912
Operating income............................................. $ 136 $ 1,164
</TABLE>
These dispositions are anticipated to be completed by the end of the second
quarter of 1999.
3. Inventories are valued at the lower of cost or market on a first-in,
first-out (FIFO) basis. Inventories consisted of the following (in
thousands):
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1999 1998
----------- ------------
<S> <C> <C>
Finished products................................................... $ 4,341 $ 5,797
Work-in-process..................................................... 2,267 3,470
Raw materials....................................................... 7,772 6,491
----------- ------------
Total............................................................. $ 14,380 $ 15,758
----------- ------------
----------- ------------
</TABLE>
4. Long-term debt consisted of the following (in thousands):
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1999 1998
---------- ------------
<S> <C> <C>
Bank Credit Agreement:
Term loan........................................................ $ 38,264 $ 43,500
Revolving credit facility........................................ 21,203 18,894
Capital leases..................................................... 279 314
Notes, due 2005.................................................... 80,934 81,150
---------- ------------
140,680 143,858
Less--current portion.............................................. (59) (7,059)
---------- ------------
Total long-term debt............................................. $ 140,621 $ 136,799
---------- ------------
---------- ------------
</TABLE>
F-157
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
On March 23, 1999, Dura and the Company entered into a an amended and
restated $1.15 billion credit agreement (the "Credit Agreement"). The Credit
Agreement provides Dura and the Company with a $275 million tranche A term
loan, a $275 million tranche B term loan, a $400 million revolving credit
facility and a $200 million interim term loan which was repaid on April 23,
1999. As it relates to the Company, the Credit Agreement provides the
Company with a term loan and a $55.0 million revolving credit facility, has
a term of five years and borrowings bear interest at the lenders reference
rate or the Eurocurrency rate. The interest rate on borrowings outstanding
under the Credit Agreement ranged from 5.25% to 8.28125% as of March 31,
1999. The Credit Agreement contains various restrictive covenants, which
limit indebtedness, investments, rental obligations and cash dividends. The
Credit Agreement also requires the Company to maintain certain financial
ratios including minimum liquidity and interest coverage. Pursuant to the
terms of the Credit Agreement, Dura and certain of its subsidiaries will
provide guarantees and collateral to support obligations owing by the
Company; but, so long as the Notes remain outstanding, neither the Company
nor any of its subsidiaries have guaranteed any obligations that are not
borrowed by the Company.
Under the terms of the Credit Agreement, an event of default by Dura also
causes an event of default for the Company. The Company and Dura were in
compliance with the covenants as of March 31, 1999. The assets of the
Company have been pledged as collateral to secure the borrowings of the
Company under the Credit Agreement.
The Credit Agreement provides the Company with the ability to denominate its
credit borrowings in foreign currencies. As of March 31, 1999, $11.0 million
of borrowings were denominated in US dollars, $5.7 million were denominated
in British pound sterling and $4.5 million were denominated in Euro.
The Notes, with a face value of $75 million, were issued on December 12,
1997, concurrent with the FKI Acquisition and are due in December 2005.
Interest is payable semi-annually on June 15 and December 15 of each year.
As further discussed in Note 7, the Notes are guaranteed by certain
subsidiaries of the Company. The Notes were recorded at their fair value of
$81.2 million as part of the Dura Acquisition. The premium in excess of face
value is being amortized over the life of the Notes using the effective
interest method.
5. Comprehensive income reflects the change in equity of a business enterprise
during a period from transactions and other events and circumstances from
non-owner sources. For the Company, comprehensive income represents net
income adjusted for foreign currency translation adjustments. Comprehensive
loss was approximately $1.8 million and $1.2 million for the three months
ended March 31, 1999 and 1998, respectively.
6. In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" effective for years beginning after June
15, 1999. SFAS No. 133 establishes accounting and reporting standards
requiring that every derivative instrument, including certain derivative
instruments embedded in other contracts, be recorded in the balance sheet as
either an asset or liability measured at its fair value. SFAS No. 133
requires that changes in the derivative's fair value be recognized currently
in earnings unless specific hedge criteria are met. Special accounting for
qualifying hedges allow a derivative's gains or losses to offset related
results on the hedged item in the income statement and requires that a
company must formally document, designate and assess
F-158
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
the effectiveness of transactions that receive hedge accounting. The Company
has not yet quantified the impacts of adopting SFAS No. 133.
During the first quarter of 1999, the Company adopted Financial Accounting
Standards Board Statement of Position (SOP) No. 98-5, "Reporting on the
Costs of Start-up Activities." SOP 98-5 requires that start-up activities be
expensed as incurred, versus capitalizing and expensing them over a period
of time. The adoption of SOP 98-5 did not affect the Company's consolidated
results of operations or the financial position of the Company.
7. Supplemental cash flow information (in thousands):
<TABLE>
<CAPTION>
FKI
COMPANY PREDECESSOR
------------------- -------------------
THREE MONTHS ENDED THREE MONTHS ENDED
MARCH 31, 1999 MARCH 31, 1998
------------------- -------------------
<S> <C> <C>
Income taxes....................................... $ 429 $ 510
Interest........................................... 2,362 1,546
</TABLE>
8. The following consolidating financial information presents balance sheet,
statement of operations and cash flow information related to the Company's
businesses. Each Guarantor is a direct or indirect wholly-owned subsidiary
of Trident Automotive plc and has fully and unconditionally guaranteed, on a
joint and several basis, the Notes. The Company has not presented separate
financial statements and other disclosures concerning the Guarantors because
management believes that such information is not material.
F-159
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEETS AS OF MARCH 31, 1999
(IN THOUSANDS)
<TABLE>
<CAPTION>
NON-
TRIDENT GUARANTOR GUARANTOR
AUTOMOTIVE PLC COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
-------------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents..................... $ 155 $ 1,304 $ 4,401 $ -- $ 5,860
Accounts receivable, net...................... -- 30,554 16,925 47,479
Inventories................................... -- 11,195 3,185 -- 14,380
Due from affiliates........................... 771 26,727 208 (27,706) --
Other current assets.......................... 105 18,865 4,423 -- 23,393
-------------- ----------- ----------- ------------ ------------
Total current assets.................... 1,031 88,645 29,142 (27,706) 91,112
-------------- ----------- ----------- ------------ ------------
Property, plant and equipment, net.............. -- 45,393 8,073 -- 53,466
Note receivable from subsidiaries............... -- 26,682 -- (26,682) --
Goodwill, net................................... 74,456 119,190 24,747 (4,776) 213,617
Other assets, net............................... 170,306 15,248 1,578 (175,892) 11,240
-------------- ----------- ----------- ------------ ------------
$ 245,793 $ 295,158 $ 63,540 $ (235,056) $ 369,435
-------------- ----------- ----------- ------------ ------------
-------------- ----------- ----------- ------------ ------------
LIABILITIES AND STOCKHOLDER'S INVESTMENT
Current liabilities:
Current portion of long-term debt............. $ -- $ 16 $ 43 $ -- $ 59
Accounts payable.............................. -- 19,208 10,389 -- 29,597
Accrued expenses.............................. 2,659 39,928 7,227 (33) 49,781
Due to affiliates............................. 25,929 216 1,528 (27,673) --
-------------- ----------- ----------- ------------ ------------
Total current liabilities............... 28,588 59,368 19,187 (27,706) 79,437
-------------- ----------- ----------- ------------ ------------
Non-current liabilities:
Long-term debt, less current portion.......... 122,198 18,209 214 -- 140,621
Note payable to Parent........................ (3,476) 610 29,548 (26,682) --
Accrued pension and other postretirement
liabilities................................. -- 11,665 989 -- 12,654
Other noncurrent liabilities.................. -- 35,854 2,386 -- 38,240
-------------- ----------- ----------- ------------ ------------
Total liabilities....................... 147,310 125,706 52,324 (54,388) 270,952
-------------- ----------- ----------- ------------ ------------
Minority interest in subsidiary company......... -- -- -- -- --
Stockholder's investment........................ 98,483 169,452 11,216 (180,668) 98,483
-------------- ----------- ----------- ------------ ------------
$ 245,793 $ 295,158 $ 63,540 $ (235,056) $ 369,435
-------------- ----------- ----------- ------------ ------------
-------------- ----------- ----------- ------------ ------------
</TABLE>
F-160
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
CONSOLIDATING STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED
MARCH 31, 1999
(IN THOUSANDS)
<TABLE>
<CAPTION>
NON-
TRIDENT GUARANTOR GUARANTOR
AUTOMOTIVE PLC COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
-------------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues..................................... $ -- $ 43,703 $ 13,103 $ (115) $ 56,691
Cost of sales................................ -- 35,836 10,841 (115) 46,562
------- ----------- ----------- ------------ ------------
Gross profit......................... -- 7,867 2,262 -- 10,129
Selling, general and administrative
expenses................................... 8 2,146 1,613 -- 3,767
Amortization expense......................... 440 946 235 -- 1,621
------- ----------- ----------- ------------ ------------
Operating income (loss).............. (448) 4,775 414 -- 4,741
Interest expense............................. (2,361) (278) (37) -- (2,676)
Interest expense--intercompany............... -- (2,545) (536) 3,081 --
Interest income.............................. -- 35 17 -- 52
Interest income--intercompany................ -- 3,032 49 (3,081) --
Exchange gain (loss)......................... 543 (60) 14 -- 497
Equity in net income (loss) of
subsidiaries............................... 2,917 (207) -- (2,710) --
Other income (expense)....................... -- (101) 60 -- (41)
------- ----------- ----------- ------------ ------------
Net income (loss) before provision
for income taxes................... 651 4,651 (19) (2,710) 2,573
Provision (benefit) for income taxes......... (893) 1,734 188 -- 1,029
------- ----------- ----------- ------------ ------------
Net income (loss).................... $ 1,544 $ 2,917 $ (207) $ (2,710) $ 1,544
------- ----------- ----------- ------------ ------------
------- ----------- ----------- ------------ ------------
</TABLE>
F-161
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED
MARCH 31, 1999
(IN THOUSANDS)
<TABLE>
<CAPTION>
NON-
TRIDENT GUARANTOR GUARANTOR
AUTOMOTIVE PLC COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
-------------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss)........................... $ 1,544 $ 2,917 $ (207) $ (2,710) $ 1,544
Adjustments to reconcile net income (loss)
to net cash provided by (used in)
operating activities--
Depreciation and amortization........... 440 2,729 562 -- 3,731
Exchange (gain) loss.................... (543) 236 (14) -- (321)
Due to/from affiliates.................. 10,831 (8,759) 495 (2,567) --
Changes in other operating items........ (2,569) 140 (2,183) 2,710 (1,902)
-------------- ----------- ----------- ------------ ------------
Net cash provided by (used in)
operating activities................ 9,703 (2,737) (1,347) (2,567) 3,052
-------------- ----------- ----------- ------------ ------------
INVESTING ACTIVITIES:
Capital disposals (expenditures), net..... -- 871 (404) -- 467
Purchase of minority interest............. -- (2,000) 492 -- (1,508)
-------------- ----------- ----------- ------------ ------------
Net cash provided by (used in)
investing activities................ -- (1,129) 88 -- (1,041)
-------------- ----------- ----------- ------------ ------------
FINANCING ACTIVITIES:
Proceeds from borrowings under credit
facility................................ 44,807 27,525 -- -- 72,332
Repayment of debt......................... (51,259) (24,238) (21) -- (75,518)
-------------- ----------- ----------- ------------ ------------
Net cash provided by (used in)
financing activities................ (6,452) 3,287 (21) -- (3,186)
-------------- ----------- ----------- ------------ ------------
EFFECT OF EXCHANGE RATES ON CASH............ (3,368) 163 (695) 2,567 (1,333)
-------------- ----------- ----------- ------------ ------------
NET CHANGE IN CASH AND CASH EQUIVALENTS..... (117) (416) (1,975) -- (2,508)
CASH AND CASH EQUIVALENTS, beginning of
period.................................... 272 1,719 6,377 -- 8,368
-------------- ----------- ----------- ------------ ------------
CASH AND CASH EQUIVALENTS, end of period.... $ 155 $ 1,303 $ 4,402 $ -- $ 5,860
-------------- ----------- ----------- ------------ ------------
-------------- ----------- ----------- ------------ ------------
</TABLE>
F-162
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEETS AS OF DECEMBER 31, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
NON-
TRIDENT GUARANTOR GUARANTOR
AUTOMOTIVE PLC COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
-------------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents................. $ 272 $ 1,719 $ 6,377 $ -- $ 8,368
Accounts receivable, net.................. -- 40,217 15,518 -- 55,735
Inventories............................... -- 12,265 3,493 -- 15,758
Due from affiliates....................... 649 18,708 707 (20,064) --
Other current assets...................... -- 16,995 4,286 -- 21,281
-------------- ----------- ----------- ------------ ------------
Total current assets.................... 921 89,904 30,381 (20,064) 101,142
Property, Plant and Equipment, net.......... -- 48,223 9,109 -- 57,332
Note Receivable From Subsidiaries........... -- 27,032 -- (27,032) --
Deferred Financing Costs.................... -- -- -- -- --
Investment in Subsidiaries.................. 163,815 12,145 -- (175,960) --
Goodwill, net............................... 74,896 119,542 25,763 (4,776) 215,425
Other Assets, net........................... 4,236 3,368 1,470 -- 9,074
-------------- ----------- ----------- ------------ ------------
$ 243,868 $ 300,214 $ 66,723 $ (227,832) $ 382,973
-------------- ----------- ----------- ------------ ------------
-------------- ----------- ----------- ------------ ------------
LIABILITIES AND STOCKHOLDER'S INVESTMENT
Current Liabilities:
Current portion of long-term debt......... $ 7,059 $ -- $ -- $ -- $ 7,059
Accounts payable.......................... -- 22,878 10,918 -- 33,796
Accrued expenses.......................... 1,903 44,859 7,316 (10) 54,068
Due to affiliates......................... 18,344 351 1,359 (20,054) --
-------------- ----------- ----------- ------------ ------------
Total current liabilities............... 27,306 68,088 19,593 (20,064) 94,923
-------------- ----------- ----------- ------------ ------------
Non-Current Liabilities:
Long-term debt, less current portion...... 121,650 14,923 226 -- 136,799
Note payable to Parent.................... (3,476) 649 31,495 (28,668) --
Accrued pension and other postretirement
liabilities............................. -- 11,891 1,066 -- 12,957
Other noncurrent liabilities.............. -- 34,767 2,433 -- 37,200
-------------- ----------- ----------- ------------ ------------
Total liabilities....................... 145,480 130,318 54,813 (48,732) 281,879
-------------- ----------- ----------- ------------ ------------
Minority Interest in Subsidiary Company..... -- -- 786 -- 786
Stockholder's Investment.................... 98,388 169,896 11,124 (179,100) 100,308
-------------- ----------- ----------- ------------ ------------
$ 243,868 $ 300,214 $ 66,723 $ (227,832) $ 382,973
-------------- ----------- ----------- ------------ ------------
-------------- ----------- ----------- ------------ ------------
</TABLE>
F-163
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
CONSOLIDATING STATEMENTS OF OPERATIONS FOR THE THREE MONTHS
ENDED MARCH 31, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
TRIDENT NON-
AUTOMOTIVE GUARANTOR GUARANTOR
PLC COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
----------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues....................................... $ -- $ 69,293 $ 17,755 $ (706) $ 86,342
Cost of sales.................................. -- 57,249 14,752 (706) 71,295
----------- ----------- ----------- ------------ ------------
Gross profit................................. -- 12,044 3,003 -- 15,047
Selling, general and administrative expenses... 22 6,329 2,386 -- 8,737
Amortization expense........................... 301 727 143 -- 1,171
----------- ----------- ----------- ------------ ------------
Operating income............................. (323) 4,988 474 -- 5,139
Interest expense............................... 3,748 3,611 799 (4,340) 3,818
Interest income................................ (2,481) (1,932) (132) 4,340 (205)
Exchange loss.................................. -- 1 921 -- 922
Other income................................... (1,188) 792 (24) 396 (24)
----------- ----------- ----------- ------------ ------------
Income before provision for income taxes..... (402) 2,516 (1,090) (396) 628
Provision for income taxes..................... (525) 1,328 (298) -- 505
----------- ----------- ----------- ------------ ------------
Net income (loss)............................ $ 123 $ 1,188 $ (792) $ (396) $ 123
----------- ----------- ----------- ------------ ------------
----------- ----------- ----------- ------------ ------------
</TABLE>
F-164
<PAGE>
TRIDENT AUTOMOTIVE PLC AND SUBSIDIARIES
CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS
ENDED MARCH 31, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
NON-
TRIDENT GUARANTOR GUARANTOR
AUTOMOTIVE PLC COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
-------------- ----------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss)............................... $ 123 $ 1,188 $ (792) $ (396) $ 123
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating
activities--
Depreciation and amortization................... 301 2,364 882 -- 3,547
(Income) loss from investment subsidiaries...... (1,188) 792 -- 396 --
Exchange gain................................... -- 1 921 -- 922
Minority interest............................... -- -- (24) -- (24)
Changes in other operating items................ (6,304) 6,763 1,134 53 1,646
-------------- ----------- ----------- ------------- -------------
Net cash provided by (used in) operating
activities.................................... (7,068) 11,108 2,121 53 6,214
-------------- ----------- ----------- ------------- -------------
INVESTING ACTIVITIES:
Capital expenditures, net....................... -- (6,279) (1,507) -- (7,786)
Purchase of Predecessor, net of cash acquired... (3,315) (118,321) (33,854) -- (155,490)
Investment in subsidiaries...................... (42,508) (15,897) -- 58,405 --
-------------- ----------- ----------- ------------- -------------
Net cash provided by (used in) investing
activities.................................... (45,823) (140,497) (35,361) 58,405 (163,276)
-------------- ----------- ----------- ------------- -------------
FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt........ 125,000 -- -- -- 125,000
Proceeds from borrowings on revolving credit
facility...................................... 7,263 500 -- -- 7,763
Payments on revolving credit facility........... (4,463) (500) -- -- (4,963)
Receipt of capital from Investor Group.......... 42,585 -- -- -- 42,585
Equity fees paid to affiliates of Investor
Group......................................... (1,500) -- -- -- (1,500)
Notes (issued to subsidiary) received from
parent........................................ (115,699) 91,983 23,716 -- --
Payments received (made) on intercompany
notes......................................... -- 1,435 (1,435) -- --
Equity contribution from parent................. -- 42,500 15,905 (58,405) --
-------------- ----------- ----------- ------------- -------------
Net cash provided by (used in) financing
activities.................................... 53,186 135,918 38,186 (58,405) 168,885
-------------- ----------- ----------- ------------- -------------
EFFECT OF EXCHANGE RATES ON CASH................ -- (229) (126) (53) (408)
-------------- ----------- ----------- ------------- -------------
NET CHANGE IN CASH AND CASH EQUIVALENTS......... 295 6,300 4,820 -- 11,415
CASH AND CASH EQUIVALENTS, beginning of
period........................................ -- -- -- -- --
-------------- ----------- ----------- ------------- -------------
CASH AND CASH EQUIVALENTS, end of period........ $ 295 $ 6,300 $ 4,820 $ -- $ 11,415
-------------- ----------- ----------- ------------- -------------
-------------- ----------- ----------- ------------- -------------
</TABLE>
F-165
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[LOGO]
DURA OPERATING CORP.
EXCHANGE OFFER FOR
$300,000,000
9% SENIOR SUBORDINATED NOTES DUE 2009
[EURO]100,000,000
9% SENIOR SUBORDINATED NOTES DUE 2009
Unconditionally Guaranteed on a Senior Subordinated Basis by
DURA AUTOMOTIVE SYSTEMS, INC.
--------------
PROSPECTUS
--------------
August , 1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II:
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20: INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Dura is incorporated under the laws of the State of Delaware. Section 145 of
the General Corporation Law of the State of Delaware ("Section 145") provides
that a Delaware corporation may indemnify any persons who are, or are threatened
to be made, parties to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of such corporation), by reason of the fact that
such person is or was an officer, director, employee or agent of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation or enterprise. The
indemnity may include expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding, provided such person acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
corporation's best interests and, with respect to any criminal action or
proceeding, had no reasonable cause to believe that his conduct was illegal. A
Delaware corporation may indemnify any persons who are, or are threatened to be
made, a party to any threatened, pending or completed action or suit by or in
the right of the corporation by reason of the fact that such person was a
director, officer, employee or agent of such corporation, or is or was serving
at the request of such corporation as a director, officer, employee or agent of
another corporation or enterprise. The indemnity may include expenses (including
attorneys' fees) actually and reasonably incurred by such person in connection
with the defense or settlement of such action or suit, provided such person
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the corporation's best interests except that no indemnification is
permitted without judicial approval if the officer or director is adjudged to be
liable to the corporation. Where an officer or director is successful on the
merits or otherwise in the defense of any action referred to above, the
corporation must indemnify him against the expenses which such officer or
director has actually and reasonably incurred.
Article Eleven of the Restated Certificate of Incorporation of Dura provides
that no director of the corporation shall be liable to the corporation or its
stockholders for monetary damages arising from a breach of fiduciary duty owed
to the corporation or its stockholders to the fullest extent permitted by the
Delaware General Corporation Law.
Article V of Dura's Amended and Restated By-laws (the "Dura By-laws")
provides that each person who was or is made a party or is threatened to be made
a party to or is otherwise involved (including involvement as a witness) in any
action, suit or proceeding, whether civil, criminal, administrative or
investigative by reason of the fact that he or she is or was a director or
officer of the corporation, is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, including service with
respect to an employee benefit plan, whether the basis of such proceeding is
alleged action in an official capacity as a director or officer or in any other
capacity while serving as a director or officer, against all expense, liability
and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or
penalties and amounts paid in settlement) reasonably incurred or suffered by
such indemnitee in connection therewith and such indemnification shall continue
as to an indemnitee who has ceased to be a director, officer, employee or agent
and shall inure to the benefit of the indemnitee's heirs, executors and
administrators; provided, however, that, except as provided below with respect
to proceedings to enforce rights to indemnification, the corporation shall
indemnify any such indemnitee in connection with a proceeding (or part thereof)
initiated by such indemnitee only if such proceeding (or part thereof) was
authorized by the Board of Directors. The right to indemnification is a contract
right and includes the right to be paid by the corporation the expenses incurred
in defending any such proceeding in advance of its final disposition
(advancement of expenses); provided, however, that, if
II-1
<PAGE>
and to the extent that the Delaware General Corporation Law requires, an
advancement of expenses incurred by an indemnitee in his or her capacity as a
director or officer (and not in any other capacity in which service was or is
rendered by such indemnitee, including, without limitation, service to an
employee benefit plan) shall be made only upon delivery to the corporation of an
undertaking by or on behalf of such indemnitee, to repay all amounts so advanced
if it shall ultimately be determined by final judicial decision from which there
is no further right to appeal than such indemnitee is not entitled to be
indemnified for such expenses.
Article V of the Dura By-laws further provides that any person serving as a
director, officer, employee or agent of a subsidiary of Dura shall be
conclusively presumed to be serving in such capacity at the request of Dura and,
hence, subject to indemnification by Dura.
Article V of the Dura By-laws further provides that persons who after the
date of the adoption of Article V become or remain directors or officers of the
corporation or who, while a director or officer of the corporation, become or
remain a director, officer, employee or agent of a subsidiary, shall be
conclusively presumed to have relied on the rights to indemnity, advancement of
expenses and other rights contained in Article V in entering into or continuing
such service. The rights to indemnification and to the advancement of expenses
conferred in Article V shall apply to claims made against a indemnitee arising
out of acts or omissions which occurred or occur both prior and subsequent to
the adoption hereof. The rights to indemnification and to the advancement of
expenses conferred in Article V shall not be exclusive of any other right which
any person may have or hereafter acquire under the Amended and Restated
Certificate of Incorporation or under any statute, bylaw, agreement, vote of
stockholders or disinterested directors or otherwise.
Section 145 further authorizes 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, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation or enterprise,
against any liability asserted against him and incurred by him in any such
capacity, arising out of his status as such, whether or not the corporation
would otherwise have the power to indemnify him under Section 145.
All of the directors and officers of Dura are covered by insurance policies
maintained and held in effect by such corporation against certain liabilities
for actions taken in such capacities, including liabilities under the Securities
Act of 1933.
Dura Operating Corp., Adwest Electronics, Inc., Anderson Industries, Inc.
and Dura Automotive Systems Cable Operations, Inc. are also incorporated under
the General Corporation Law of the State of Delaware. Under their respective
charter documents, each corporation has agreed to indemnify their officers and
directors to the fullest extent authorized by the Delaware General Corporation
Law.
Set forth below is a summary of the indemnification provisions contained in
the charter documents of certain of the subsidiary guarantors:
ADWEST ELECTRONICS, INC. A director of the corporation shall not be
personally liable to the corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability (i) for any
breach of the director's duty of loyalty to the corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the
Delaware General Corporation Law, or (iv) for any transaction from which the
director derived any improper personal benefit.
DURA AUTOMOTIVE SYSTEMS, INC. COLUMN SHIFTER OPERATIONS AND ADWEST WESTERN
AUTOMOTIVE, INC. A corporation shall have power to indemnify any person who was
or is a director in a proceeding by reason of his or her association with the
corporation against expenses (reasonable and actual), judgements, fines and
amounts paid in settlement in connection with such proceeding if said person
acted in good faith and in a manner reasonably believed to be in or not opposed
to the corporation's
II-2
<PAGE>
best interest. With respect to a criminal action, indemnification is allowed if
said person had no reasonable cause to believe his or her actions were unlawful.
None of these factors for indemnification will be presumed in the negative after
a termination of the action or similar occurrence (e.g. judgement, settlement or
plea nolo contendere). In an action brought by or in right of the corporation,
the same indemnification will be allowed if said person acted in good faith and
in a manner reasonably believed to be in or not opposed to the best interest of
the corporation. Indemnification shall not be made for a matter in which the
person is found liable to the corporation unless the court determines that said
person is entitled to indemnity. Where a director has been successful on the
merits of an action, the corporation shall indemnify said person against actual
and reasonable expenses (including attorney's fees). No indemnification shall be
made in respect of any claim, issue or matter to which such person is found
liable for negligence or misconduct unless the court in which the action is
brought determines that said person is entitled to indemnity. This provision
shall not be deemed exclusive and those seeking indemnification may be entitled
to indemnification under the articles of incorporation, by-laws or a contractual
agreement. The corporation shall have the power to purchase and maintain
insurance for above said person for liability from actions regardless of the
corporation's power to indemnify said person under this statute.
ATWOOD AUTOMOTIVE, INC. Each director and officer of the corporation shall
by indemnified be the corporation against all expenses in connection with any
claim (civil, criminal or otherwise, including appeals) in which he or she may
become involved due to his or her position with the corporation. Where such
cases proceed to final adjudication, indemnification shall not be allowed for
such directors found liable for negligence or misconduct in performance of
duties to the corporation. Neither a judgement of conviction or the entry of any
plea in a criminal case shall of itself be deemed an adjudication that such
individual was liable of negligence or misconduct if the individual acted in
good faith, for a purpose believed to be in the best interest of the corporation
and had no reasonable cause to believe the conduct was unlawful. There rights
herein provided for shall not be deemed exclusive of other rights to which the
individual is entitled.
DURA AUTOMOTIVE SYSTEMS OF TENNESSEE, L.P. The partnership shall indemnify
and hold harmless the general partner against any claims or liability incurred
by the general partner provided that the general partner, in respect to these
claims, acted in good faith and in a reasonable belief to be acting in the scope
of its authority. Nothing contained in this paragraph shall be construed to
impose liability of the limited partners except, and only to the extent, that a
limited partner is acting as general partner.
DURA AUTOMOTIVE SYSTEMS OF INDIANA, INC. AND UNIVERSAL TOOL & STAMPING
COMPANY, INC. A corporation may indemnify an individual who was or is a
director made party to a proceeding if the individual's conduct was in good
faith and the individual reasonably believed that the individual's conduct was
in the corporation's best interest or not opposed to its best interest. For
indemnification in a criminal proceeding, the individual must either: had
reasonable cause to believe the conduct was lawful or no reasonable cause to
believe it was unlawful. In respect to a employee benefit plan, a director's
conduct believed to be in the best interest of the participants and
beneficiaries of the plan is enough to exercise the indemnification protection.
Unless limited by the articles of incorporation, the corporation shall indemnify
a director who was wholly successful in the defense of a proceeding to which the
director was party because of his position as director. Unless the articles of
incorporation provide otherwise, a director may apply for indemnification from
the court. The court must determine if: (1) if the director is entitled to
mandatory indemnification as noted above or (2) the director is fairly and
reasonably entitled to indemnification in view of all relevant circumstances.
The corporation shall have the power to purchase and maintain insurance for
above said person for liability from actions regardless of the corporation's
power to indemnify said person under this provision. This provision shall not be
deemed exclusive and those seeking indemnification may be entitled to
indemnification under any articles of incorporation, by-laws, resolution by
board of directors or shareholders, or any other authorization by a majority
vote of the voting shares.
II-3
<PAGE>
HYDRO FLAME CORPORATION. A corporation may indemnify an individual who was
or is a director made party to a proceeding if the individual's conduct was in
good faith and the individual reasonably believed that the individual's conduct
was in the corporation's best interest or not opposed to its best interest. None
of these factors for indemnification will be presumed in the negative after a
termination of the action or similar occurrence (e.g. judgement, settlement or
plea nolo contendere). For indemnity in a criminal proceeding, the individual
must have had no reasonable cause to believe the conduct was unlawful. In
respect to a employee benefit plan, a director's conduct believed to be in the
best interest of the participants and beneficiaries of the plan is sufficient to
exercise the indemnification protection. A corporation may not indemnify a
director under this section in connection with a proceeding by right or in the
right of the corporation in which the director is adjudged liable to the
corporation. Also, indemnification is not allowed in a proceeding in which the
director derived an improper personal benefit. Unless limited by charter, a
corporation shall indemnify a director who was wholly successful on the merits
of a proceeding in which the director was a party because of his position with
the corporation. Unless the articles of incorporation provide otherwise, a
director may apply for indemnification from the court. The court must determine
if: (1) if the director is entitled to mandatory indemnification as noted above
or (2) the director is fairly and reasonably entitled to indemnification in view
of all relevant circumstances. The corporation shall have the power to purchase
and maintain insurance for above said person for liability from actions
regardless of the corporation's power to indemnify said person under this
provision.
ATWOOD INDUSTRIES, INC. A corporation may indemnify any person in a civil,
criminal, administrative or investigative proceeding by reason of his or her
association with the corporation against expenses, judgements, fines and amounts
paid in settlement in connection with such proceeding if said person acted in
good faith and in a manner reasonably believed to be in or not opposed to the
corporation's best interest. With respect to a criminal action, indemnification
is allowed if said person had no reasonable cause to believe his or her actions
were unlawful. None of these factors for indemnification will be presumed in the
negative after a termination of the action or similar occurrence (e.g.
judgement, settlement or plea nolo contendere). In an action brought by or in
right of the corporation, the same indemnification will be allowed if said
person acted in good faith and in a manner reasonably believed to be in or not
opposed to the best interest of the corporation. However, no indemnification
shall be made in respect of any claim, issue or matter to which such person is
found liable for negligence or misconduct unless the court in which the action
is brought determines that said person is entitled to indemnity. A corporation
shall indemnify a director who was wholly successful on the merits of a
proceeding in which the director was a party because of his or her position with
the corporation. This statute shall not be deemed exclusive and those seeking
indemnification may be entitled to indemnification under any by-law, agreement,
vote of the stockholders or disinterested directors or otherwise for said person
while and after holding office. The corporation shall have the power to purchase
and maintain insurance for above said person for liability from actions
regardless of the corporation's power to indemnify said person under this
provision.
II-4
<PAGE>
ITEM 21. EXHIBITS.
(a) The following exhibits are filed as part of this Registration Statement
or incorporated by reference herein:
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------ --------------------------------------------------------------------------
<C> <S>
* 1.1 Purchase Agreement, dated April 15, 1999, among Dura Operating Corp., Dura
Automotive Systems, Inc., the subsidiary guarantors named therein (the
"Subsidiary Guarantors") and NationsBanc Montgomery Securities LLC, Bank
of America International Limited, Donaldson, Lufkin & Jenrette
Securities Corporation and Donaldson, Lufkin & Jenrette International
(collectively, the "Initial Purchasers").
2.1 Agreement and Plan of Merger, dated as of January 19, 1999, among Dura
Automotive Systems, Inc., Excel Industries, Inc. and Windows Acquisition
Corporation, incorporated by reference to Exhibit 2.1 to Dura's Current
Report on Form 8-K, dated January 22, 1999.
2.2 Amendment to Agreement and Plan of Merger, dated as of March 9, 1999, by
and among Dura Automotive Systems, Inc., Dura Operating Corp., Excel
Industries, Inc. and Windows Acquisition Corporation incorporated by
reference to the additional definitive proxy materials filed with the
SEC on March 11, 1999.
+ 3.1 Restated Certificate of Incorporation of Dura Automotive Systems, Inc.
3.2 Amended and Restated By-laws of Dura Automotive Systems, Inc.,
incorporated by reference to Exhibit 3.2 of the Registration Statement
on Form S-1 (Registration No. 333-06601) (the "S-1").
* 3.3 Certificate of Incorporation of Dura Operating Corp.
* 3.4 By-laws of Dura Operating Corp.
* 3.5 Certificate of Incorporation of Dura Automotive Systems, Inc., Column
Shifter Operations
* 3.6 By-laws of Dura Automotive Systems, Inc., Column Shifter Operations
* 3.7 Certificate of Incorporation of Universal Tool & Stamping Company Inc.
* 3.8 By-laws of Universal Tool & Stamping Company Inc.
* 3.9 Certificate of Incorporation of Dura Automotive Systems Cable Operations,
Inc.
* 3.10 By-laws of Dura Automotive Systems Cable Operations, Inc.
* 3.11 Certificate of Incorporation of Adwest Electronics, Inc.
* 3.12 By-laws of Adwest Electronics, Inc.
* 3.13 Certificate of Incorporation of Adwest Western Automotive, Inc.
* 3.14 By-laws of Adwest Western Automotive, Inc.
* 3.15 Certificate of Incorporation of X.E. Co.
* 3.16 By-laws of X.E. Co.
* 3.17 Certificate of Partnership of Dura Automotive Systems of Tennessee, L.P.
* 3.18 Agreement of Limited Partnership of Dura Automotive Systems of Tennessee,
L.P.
* 3.19 Certificate of Incorporation of Dura Automotive Systems of Indiana, Inc.
* 3.20 By-laws of Dura Automotive Systems of Indiana, Inc.
* 3.21 Certificate of Incorporation of Anderson Industries, Inc.
* 3.22 By-laws of Anderson Industries, Inc.
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------ --------------------------------------------------------------------------
<C> <S>
* 3.23 Certificate of Incorporation of Hydro Flame Corporation
* 3.24 By-laws of Hydro Flame Corporation
* 3.25 Certificate of Incorporation of Atwood Industries, Inc.
* 3.26 By-laws of Atwood Industries, Inc.
* 3.27 Certificate of Incorporation of Atwood Automotive, Inc.
* 3.28 By-laws of Atwood Automotive, Inc.
* 3.29 Certificate of Incorporation of Mark I Molded Plastics, Inc.
* 3.30 By-laws of Mark I Molded Plastics, Inc.
* 3.31 Certificate of Incorporation of Mark I Molded Plastics of Tennessee, Inc.
* 3.32 By-laws of Mark I Molded Plastics of Tennessee, Inc.
4.1 Amended and Restated Stockholders Agreement, dated as of August 13, 1996,
by and among Dura, Onex U.S. Investments, Inc., J2R, Alkin, the HCI
Stockholders (as defined therein) and the Management Stockholders (as
defined therein), incorporated by reference to Exhibit 10.30 of the S-1.
4.2 Amendment No. 1 to Amended and Restated Stockholders Agreement, dated as
of August 13, 1996, by and between Dura, Onex DHC LLC, J2R, Alkin and
the HCI Stockholders and the Management Stockholders, incorporated by
reference to Exhibit 4.1 of the Quarterly Report on Form 10-Q for the
quarter ended September 30, 1997.
4.3 Registration Agreement, dated as of August 31, 1994, among Dura, Alkin and
the MC Stockholders (as defined therein), incorporated by reference to
Exhibit 4.3 of the S-1.
4.4 Amendment to Registration Agreement, dated May 17, 1995, by and between
Dura, the MC Stockholders (as defined therein) and Alkin, incorporated
by reference to Exhibit 4.4 of the S-1.
4.5 Amended and Restated Investor Stockholder Agreement, dated as of August
13, 1996, by and among Dura, Onex U.S. Investments, Inc., J2R and
certain other stockholders party thereto, incorporated by reference to
Exhibit 10.31 of the S-1.
4.6 Form of certificate representing Class A common stock of Dura,
incorporated by reference to Exhibit 4.6 of the S-1.
* 4.7 Indenture, dated April 22, 1999, between Dura Operating Corp., Dura
Automotive Systems, Inc., the Subsidiary Guarantors and U.S. Bank Trust
National Association, as trustee, relating to the Dollar Notes.
* 4.8 Indenture, dated April 22, 1999, between Dura Operating Corp., Dura
Automotive Systems, Inc., the Subsidiary Guarantors and U.S. Bank Trust
National Association, as trustee, relating to the Euro Notes.
* 4.9 Registration Rights Agreement, dated April 22, 1999, between the Initial
Purchasers and Dura Operating Corp., Dura Automotive Systems, Inc. and
the Subsidiary Guarantors, relating to the Dollar Notes.
* 4.10 Registration Rights Agreement, dated April 22, 1999, between the Initial
Purchasers and Dura Operating Corp., Dura Automotive Systems, Inc. and
the Subsidiary Guarantors, relating to the Euro Notes.
* 5.1 Opinion of Kirkland & Ellis regarding the validity of the securities
offered hereby.
* 8.1 Opinion of Kirkland & Ellis regarding federal income tax considerations.
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------ --------------------------------------------------------------------------
<C> <S>
10.1 Amended and Restated Credit Agreement, dated as of March 19, 1999, among
Dura Automotive Systems, Inc., as Parent Guarantor, Dura Operating
Corp., Dura Automotive Systems (Europe) GmbH, Dura Asia-Pacific Pty
Limited ACN 004884539 and Dura Automotive Systems (Canada), Ltd., as
Dura Borrowers, Trident Automotive plc, Dura Automotive Systems Limited,
Spicebright Limited, Dura Automotive Systems Cable Operating Inc., Dura
Automotive Systems Cable Operations Canada, Inc. and Moblan Investments
B.V., as Trident Borrowers, Dura Automotive Acquisition Limited, as the
initial Adwest Borrower, Bank of America National Trust and Savings
Association, as Agent, BA Australia Limited, as Australian Lender, Bank
of America Canada, as Canadian Lender, Bank of America National Trust
and Savings Association, as Swing Line Lender and Issuing Lender, and
the other financial institutions party thereto, NationsBanc Montgomery
Securities LLC, as Lead Arranger and Book Manager, incorporated by
reference to Exhibit 10.1 of Dura's Quarterly Report on Form 10-Q for
the quarterly period ended March 31, 1999.
10.2 1996 Key Employee Stock Option Plan, incorporated by reference to Exhibit
10.27 of the S-1.
10.3 Independent Director Stock Option Plan, incorporated by reference to
Exhibit 10.28 of the S-1.
10.4 Employee Stock Discount Purchase Plan, incorporated by reference to
Exhibit 10.29 of the S-1.
10.5 Stock Purchase Agreement, dated August 1, 1997, by and among Dura Shifter
Holding Corp. and the various selling shareholders, incorporated by
reference to Exhibit 2.1 of the Registrant's Form 8-K dated September
12, 1997.
10.6 Joint Venture Agreement by and among Orscheln Co., MC Holding Corp., Onex
U.S. Investments, Inc., J2R Corporation and Dura Automotive Holding,
Inc., dated as of August 31, 1994, incorporated by reference to Exhibit
10.1 of the S-1.
10.7 Stock Purchase Agreement, dated April 8, 1998, by and among Dura
Automotive Systems (UK) Limited and the various selling shareholders
listed on the various signature pages thereto, incorporated by reference
to Exhibit 2.1 of Dura's Amendment No. 1 to Form 8-K/A dated April 30,
1998.
10.8 Stock Purchase Agreement, dated April 8, 1998, by and among Dura
Automotive Systems (UK) Limited and Mervyn Edgar (including a schedule
identifying Stock Purchase Agreements executed by D. Michael Dodge,
Geoff Hill, Thomas Humann, Dan Robosto, Frances Sarrazin and Lothar
Singe), incorporated by reference to Exhibit 2.2 of Dura's Amendment No.
1 to Form 8-K/A dated April 30, 1998.
10.9 Stock Option Agreement, dated as of August 31, 1994, between Dura
Automotive Systems, Inc. and Alkin Co., incorporated by reference to
Exhibit 10.4 of the S-1.
10.10 Promissory Note, dated December 31, 1991, of Karl F. Storrie in favor of
Dura Automotive Systems, Inc., incorporated by reference to Exhibit
10.17 of the S-1.
10.11 1998 Stock Incentive Plan, incorporated by reference to Appendix B in the
Registration Statement on Form S-4 (Registration No. 333-71483).
*12.1 Statement Regarding Computation of Earnings to Fixed Charges and Pro Forma
Earnings to Fixed Charges.
* 21.1 Subsidiaries of Dura Automotive Systems, Inc.
* 23.1 Consent of Arthur Andersen LLP, Minneapolis, Minnesota.
</TABLE>
II-7
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------ --------------------------------------------------------------------------
<C> <S>
* 23.2 Consent of Arthur Andersen LLP, Grand Rapids, Michigan.
* 23.3 Consent of Arthur Andersen LLP, Stamford, Connecticut.
* 23.4 Consent of KPMG Audit Plc.
* 23.5 Consents of Kirkland & Ellis (included in Exhibits 5.1 and 8.1).
* 25.1 Statement of Eligibility of Trustee on Form T-1 under the Trust Indenture
Act of 1939 of U.S. Bank Trust National Association.
* 99.1 Form of Letter of Transmittal for Notes Deposited with DTC.
* 99.2 Form of Letter of Transmittal for Notes Deposited with Euroclear.
* 99.3 Form of Notice of Guaranteed Delivery for Notes Deposited with DTC.
* 99.4 Form of Tender Instructions for Notes Deposited with DTC.
* 99.5 Form of Tender Instructions for Notes Deposited with Euroclear.
</TABLE>
- ------------------------
* Filed herewith.
+ Previously filed.
(b) No financial statement schedules are required to be filed herewith
pursuant to this Item.
ITEM 22. UNDERTAKINGS.
The undersigned registrants hereby undertake:
(a) (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;
(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 the time shall be deemed to be the initial
bonafide offering thereof;
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering; and
(4) The undersigned registrants hereby undertake as follows: that prior to
any public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.
II-8
<PAGE>
(5) The registrants undertake that every prospectus: (i) that is filed
pursuant to paragraph (1) immediately preceding, or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Act and is used in connection with
an offering of securities subject to Rule 415, will be filed as part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes 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.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
Dura pursuant to the provisions, or otherwise, Dura has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by Dura of expenses incurred or paid by
a directors, officer or controlling person of Dura 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, Dura
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 of 1933 and will be governed by the final
adjudication of such issue.
(c) The undersigned registrants hereby undertake 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.
(d) The undersigned registrants hereby undertake 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-9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Dura Automotive
Systems, Inc. duly caused this Amendment No. 1 to Registration Statement on Form
S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in
City of Rochester Hills, State of Michigan, on the 6th day of August, 1999.
<TABLE>
<S> <C> <C>
DURA AUTOMOTIVE SYSTEMS, INC.
By: /s/ DAVID R. BOVEE
-----------------------------------------
David R. Bovee
VICE PRESIDENT
</TABLE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO REGISTRATION STATEMENT HAS HAVE BEEN SIGNED BY THE FOLLOWING PERSONS IN
THE CAPACITIES AND ON THE DATES INDICATED ON THE 6TH DAY OF AUGUST, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------ --------------------------
<C> <S>
*
- ------------------------------ Chairman
S.A. Johnson
President, Chief Executive
* Officer
- ------------------------------ and Director (principal
Karl F. Storrie executive officer)
*
- ------------------------------ Vice President and
Robert R. Hibbs Director
*
- ------------------------------ Director
Robert E. Brooker, Jr.
*
- ------------------------------ Director
W.H. Clement
*
- ------------------------------ Director
J. Richard Jones
*
- ------------------------------ Director
Jack K. Edwards
*
- ------------------------------ Director
John C. Jorgensen
*
- ------------------------------ Director
James O. Futterknecht
*
- ------------------------------ Director
Ralph R. Whitney, Jr.
</TABLE>
II-10
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------ --------------------------
<C> <S>
*
- ------------------------------ Director
William L. Orscheln
*
- ------------------------------ Director
Eric J. Rosen
Vice President and Chief
* Financial Officer
- ------------------------------ (principal financial and
Stephen E. K. Graham accounting officer)
</TABLE>
* The undersigned, by signing his name hereto, does sign and execute this
Amendment No. 1 to Registration Statement pursuant to the Power of Attorney
executed by the above-named officers and directors of the Registrant and
previously filed with the Commission.
<TABLE>
<S> <C> <C> <C>
By: /s/ DAVID R. BOVEE
-------------------------
David R. Bovee,
ATTORNEY IN FACT
</TABLE>
II-11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Dura Operating
Corp. duly caused this Amendment No. 1 to Registration Statement on Form S-4 to
be signed on its behalf by the undersigned, thereunto duly authorized, in City
of Rochester Hills, State of Michigan, on the 6th day of August, 1999.
<TABLE>
<S> <C> <C>
DURA OPERATING CORP.
By: /s/ DAVID R. BOVEE
-----------------------------------------
David R. Bovee
VICE PRESIDENT
</TABLE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED ON THE 6TH DAY OF AUGUST, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------ --------------------------
<C> <S>
*
- ------------------------------ Chairman
S.A. Johnson
President, Chief Executive
* Officer
- ------------------------------ and Director (principal
Karl F. Storrie executive officer)
*
- ------------------------------ Vice President and
Robert R. Hibbs Director
*
- ------------------------------ Director
Robert E. Brooker, Jr.
*
- ------------------------------ Director
W.H. Clement
*
- ------------------------------ Director
J. Richard Jones
*
- ------------------------------ Director
Jack K. Edwards
*
- ------------------------------ Director
John C. Jorgensen
*
- ------------------------------ Director
James O. Futterknecht
*
- ------------------------------ Director
Ralph R. Whitney, Jr.
</TABLE>
II-12
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------ --------------------------
<C> <S>
*
- ------------------------------ Director
William L. Orscheln
*
- ------------------------------ Director
Eric J. Rosen
Vice President and Chief
* Financial Officer
- ------------------------------ (principal financial and
Stephen E. K. Graham accounting officer)
</TABLE>
* The undersigned, by signing his name hereto, does sign and execute this
Amendment No. 1 to Registration Statement pursuant to the Power of Attorney
executed by the above-named officers and directors of the Registrant and
previously filed with the Commission.
<TABLE>
<S> <C> <C> <C>
By: /s/ DAVID R. BOVEE
-------------------------
David R. Bovee,
ATTORNEY IN FACT
</TABLE>
II-13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Dura Automotive
Systems, Inc., Column Shifter Operations duly caused this Amendment No. 1 to
Registration Statement on Form S-4 to be signed on its behalf by the
undersigned, thereunto duly authorized, in City of Rochester Hills, State of
Michigan, on the 6th day of August, 1999.
<TABLE>
<S> <C> <C>
DURA AUTOMOTIVE SYSTEMS, INC.
COLUMN SHIFTER OPERATIONS
By: /s/ DAVID R. BOVEE
-----------------------------------------
David R. Bovee
PRESIDENT
</TABLE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED ON THE 6TH DAY OF AUGUST, 1999.
<TABLE>
<CAPTION>
NAME TITLE
- ------------------------------ --------------------------
<C> <S>
/s/ DAVID R. BOVEE President and Director
- ------------------------------ (principal executive
David R. Bovee officer)
Vice President, Chief
/s/ STEPHEN E. K. GRAHAM Financial Officer and
- ------------------------------ Director (principal
Stephen E.K. Graham accounting and financial
officer)
</TABLE>
II-14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Universal Tool &
Stamping Company, Inc. duly caused this Amendment No. 1 to Registration
Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto
duly authorized, in City of Rochester Hills, State of Michigan, on the 6th day
of August, 1999.
<TABLE>
<S> <C> <C>
UNIVERSAL TOOL & STAMPING COMPANY, INC.
By: /s/ DAVID R. BOVEE
-----------------------------------------
David R. Bovee
PRESIDENT
</TABLE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED ON THE 6TH DAY OF AUGUST, 1999.
<TABLE>
<CAPTION>
NAME TITLE
- ------------------------------ --------------------------
<C> <S>
/s/ DAVID R. BOVEE President and Director
- ------------------------------ (principal executive
David R. Bovee officer)
Vice President, Chief
/s/ STEPHEN E.K. GRAHAM Financial Officer and
- ------------------------------ Director (principal
Stephen E.K. Graham accounting and financial
officer)
</TABLE>
II-15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Dura Automotive
Systems Cable Operations, Inc. duly caused this Amendment No. 1 to Registration
Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto
duly authorized, in City of Rochester Hills, State of Michigan, on the 6th day
of August, 1999.
<TABLE>
<S> <C> <C>
DURA AUTOMOTIVE SYSTEMS CABLE
OPERATIONS, INC.
By: /s/ DAVID R. BOVEE
-----------------------------------------
David R. Bovee
PRESIDENT
</TABLE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED ON THE 6TH DAY OF AUGUST, 1999.
<TABLE>
<CAPTION>
NAME TITLE
- ------------------------------ --------------------------
<C> <S>
/s/ DAVID R. BOVEE President and Director
- ------------------------------ (principal executive
David R. Bovee officer)
Vice President, Chief
/s/ STEPHEN E.K. GRAHAM Financial Officer and
- ------------------------------ Director (principal
Stephen E.K. Graham accounting and financial
officer)
</TABLE>
II-16
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Adwest
Electronics, Inc. duly caused this Amendment No. 1 to Registration Statement on
Form S-4 to be signed on its behalf by the undersigned, thereunto duly
authorized, in City of Rochester Hills, State of Michigan, on the 6th day of
August, 1999.
<TABLE>
<S> <C> <C>
ADWEST ELECTRONICS, INC.
By: /s/ HUGH BLACK
-----------------------------------------
Hugh Black
PRESIDENT AND CHIEF EXECUTIVE OFFICER
</TABLE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David R. Bovee, Stephen E.K. Graham, Scott D.
Rued and Carl E. Nelson, and each of them, his or her true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him or her and in his or her name, place and stead, in any
and all capacities, to sign any or all amendments (including post-effective
amendments) to this registration statement (any registration statement filed
pursuant to Rule 462(b) under the Securities Act of 1933, as amended, for the
offerings which this Registration Statement relates), and to file the same, with
all 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 he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED ON THE 6TH DAY OF AUGUST, 1999.
<TABLE>
<CAPTION>
NAME TITLE
- ------------------------------ --------------------------
<C> <S>
President, Chief Executive
/s/ HUGH BLACK Officer and Director
- ------------------------------ (principal executive
Hugh Black officer)
Treasurer, Chief Financial
* Officer and Director
- ------------------------------ (principal accounting
David G. Brooks and financial officer)
</TABLE>
* The undersigned, by signing his name hereto, does sign and execute this
Amendment No. 1 to Registration Statement pursuant to the Power of Attorney
executed by the above-named officers and directors of the Registrant and
previously filed with the Commission.
<TABLE>
<S> <C> <C> <C>
By: /s/ DAVID R. BOVEE
-------------------------
David R. Bovee,
ATTORNEY IN FACT
</TABLE>
II-17
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Adwest Western
Automotive, Inc. duly caused this Amendment No. 1 to Registration Statement on
Form S-4 to be signed on its behalf by the undersigned, thereunto duly
authorized, in City of Rochester Hills, State of Michigan, on the 6th day of
August, 1999.
<TABLE>
<S> <C> <C>
ADWEST WESTERN AUTOMOTIVE, INC.
By: /s/ HUGH BLACK
-----------------------------------------
Hugh Black
PRESIDENT AND CHIEF EXECUTIVE OFFICER
</TABLE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED ON THE 6TH DAY OF AUGUST, 1999.
<TABLE>
<CAPTION>
NAME TITLE
- ------------------------------ --------------------------
<C> <S>
President, Chief Executive
/s/ HUGH BLACK Officer and Director
- ------------------------------ (principal executive
Hugh Black officer)
Treasurer, Chief Financial
* Officer and Director
- ------------------------------ (principal accounting
David G. Brooks and financial officer)
*
- ------------------------------ Director
Kevin G. Lowen
*
- ------------------------------ Director
Philip Marshallsay
</TABLE>
* The undersigned, by signing his name hereto, does sign and execute this
Amendment No. 1 to Registration Statement pursuant to the Power of Attorney
executed by the above-named officers and directors of the Registrant and
previously filed with the Commission.
<TABLE>
<S> <C> <C> <C>
By: /s/ DAVID R. BOVEE
-------------------------
David R. Bovee,
ATTORNEY IN FACT
</TABLE>
II-18
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, X.E. Co. duly
caused this Amendment No. 1 to Registration Statement on Form S-4 to be signed
on its behalf by the undersigned, thereunto duly authorized, in City of
Rochester Hills, State of Michigan, on the 6th day of August, 1999.
<TABLE>
<S> <C> <C>
X.E. CO.
By: /s/ DAVID R. BOVEE
-----------------------------------------
David R. Bovee
PRESIDENT
</TABLE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED ON THE 6TH DAY OF AUGUST, 1999.
<TABLE>
<CAPTION>
NAME TITLE
- ------------------------------ --------------------------
<C> <S>
/s/ DAVID R. BOVEE President and Director
- ------------------------------ (principal executive
David R. Bovee officer)
Vice President, Chief
/s/ STEPHEN E.K. GRAHAM Financial Officer and
- ------------------------------ Director (principal
Stephen E.K. Graham accounting and financial
officer)
</TABLE>
II-19
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Dura Automotive
Systems of Tennessee L.P. duly caused this Amendment No. 1 to Registration
Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto
duly authorized, in City of Rochester Hills, State of Michigan, on the 6th day
of August, 1999.
<TABLE>
<S> <C> <C>
DURA AUTOMOTIVE SYSTEMS OF TENNESSEE L.P.
By: Dura Operating Corp.
Its: General Partner
By: /s/ DAVID R. BOVEE
-----------------------------------------
David R. Bovee
VICE PRESIDENT
</TABLE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED ON THE 6TH DAY OF AUGUST, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------ --------------------------
<C> <S>
*
- ------------------------------ Chairman of Dura Operating
S.A. Johnson Corp.
*
- ------------------------------ Director of Dura Operating
Karl F. Storrie Corp.
*
- ------------------------------ Director of Dura Operating
Robert R. Hibbs Corp.
*
- ------------------------------ Director of Dura Operating
Robert E. Brooker, Jr. Corp.
*
- ------------------------------ Director of Dura Operating
W.H. Clement Corp.
*
- ------------------------------ Director of Dura Operating
J. Richard Jones Corp.
*
- ------------------------------ Director of Dura Operating
Jack K. Edwards Corp.
*
- ------------------------------ Director of Dura Operating
John C. Jorgensen Corp.
*
- ------------------------------ Director of Dura Operating
James O. Futterknecht Corp.
</TABLE>
II-20
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------ --------------------------
<C> <S>
*
- ------------------------------ Director of Dura Operating
Ralph R. Whitney, Jr. Corp.
*
- ------------------------------ Director of Dura Operating
William L. Orscheln Corp.
*
- ------------------------------ Director of Dura Operating
Eric J. Rosen Corp.
/s/ DAVID R. BOVEE
- ------------------------------ President (principal
David R. Bovee executive officer)
Vice President and Chief
* Financial Officer
- ------------------------------ (principal financial and
Stephen E. K. Graham accounting officer)
</TABLE>
* The undersigned, by signing his name hereto, does sign and execute this
Amendment No. 1 to Registration Statement pursuant to the Power of Attorney
executed by the above-named officers and directors of the Registrant and
previously filed with the Commission.
<TABLE>
<S> <C> <C> <C>
By: /s/ DAVID R. BOVEE
-------------------------
David R. Bovee,
ATTORNEY IN FACT
</TABLE>
II-21
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Dura Automotive
Systems of Indiana, Inc. duly caused this Amendment No. 1 to Registration
Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto
duly authorized, in City of Rochester Hills, State of Michigan, on the 6th day
of August, 1999.
<TABLE>
<S> <C> <C>
DURA AUTOMOTIVE SYSTEM OF INDIANA, INC.
By: /s/ DAVID R. BOVEE
-----------------------------------------
David R. Bovee
PRESIDENT
</TABLE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED ON THE 6TH DAY OF AUGUST, 1999.
<TABLE>
<CAPTION>
NAME TITLE
- ------------------------------ --------------------------
<C> <S>
/s/ DAVID R. BOVEE President and Director
- ------------------------------ (principal executive
David R. Bovee officer)
Vice President, Chief
/s/ STEPHEN E.K. GRAHAM Financial Officer and
- ------------------------------ Director (principal
Stephen E.K. Graham accounting and financial
officer)
</TABLE>
II-22
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Anderson
Industries, Inc. duly caused this Amendment No. 1 to Registration Statement on
Form S-4 to be signed on its behalf by the undersigned, thereunto duly
authorized, in City of Rochester Hills, State of Michigan, on the 6th day of
August, 1999.
<TABLE>
<S> <C> <C>
ANDERSON INDUSTRIES, INC.
By: /s/ DAVID R. BOVEE
-----------------------------------------
David R. Bovee
PRESIDENT
</TABLE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED ON THE 6TH DAY OF AUGUST, 1999.
<TABLE>
<CAPTION>
NAME TITLE
- ------------------------------ --------------------------
<C> <S>
/s/ DAVID R. BOVEE President and Director
- ------------------------------ (principal executive
David R. Bovee officer)
Vice President, Chief
/s/ STEPHEN E.K. GRAHAM Financial Officer and
- ------------------------------ Director (principal
Stephen E.K. Graham accounting and financial
officer)
*
- ------------------------------ Director
John K. Knappenberger
*
- ------------------------------ Director
Karl F. Storrie
</TABLE>
* The undersigned, by signing his name hereto, does sign and execute this
Amendment No. 1 to Registration Statement pursuant to the Power of Attorney
executed by the above-named officers and directors of the Registrant and
previously filed with the Commission.
<TABLE>
<S> <C> <C> <C>
By: /s/ DAVID R. BOVEE
-------------------------
David R. Bovee,
ATTORNEY IN FACT
</TABLE>
II-23
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Hydro Flame
Corporation duly caused this Amendment No. 1 to Registration Statement on Form
S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in
City of Rochester Hills, State of Michigan, on the 6th day of August, 1999.
<TABLE>
<S> <C> <C>
HYDRO FLAME CORPORATION
By: /s/ DAVID R. BOVEE
-----------------------------------------
David R. Bovee
PRESIDENT
</TABLE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED ON THE 6TH DAY OF AUGUST, 1999.
<TABLE>
<CAPTION>
NAME TITLE
- ------------------------------ --------------------------
<C> <S>
/s/ DAVID R. BOVEE President and Director
- ------------------------------ (principal executive
David R. Bovee officer)
Vice President, Chief
/s/ STEPHEN E.K. GRAHAM Financial Officer and
- ------------------------------ Director (principal
Stephen E.K. Graham accounting and financial
officer)
</TABLE>
II-24
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Atwood
Industries, Inc. duly caused this Amendment No. 1 to Registration Statement on
Form S-4 to be signed on its behalf by the undersigned, thereunto duly
authorized, in City of Rochester Hills, State of Michigan, on the 6th day of
August, 1999.
<TABLE>
<S> <C> <C>
ATWOOD INDUSTRIES, INC.
By: /s/ DAVID R. BOVEE
-----------------------------------------
David R. Bovee
PRESIDENT
</TABLE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED ON THE 6TH DAY OF AUGUST, 1999.
<TABLE>
<CAPTION>
NAME TITLE
- ------------------------------ --------------------------
<C> <S>
/s/ DAVID R. BOVEE President and Director
- ------------------------------ (principal executive
David R. Bovee officer)
Vice President, Chief
/s/ STEPHEN E.K. GRAHAM Financial Officer and
- ------------------------------ Director (principal
Stephen E.K. Graham accounting and financial
officer)
</TABLE>
II-25
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Atwood
Automotive Inc. duly caused this Amendment No. 1 to Registration Statement on
Form S-4 to be signed on its behalf by the undersigned, thereunto duly
authorized, in City of Rochester Hills, State of Michigan, on the 6th day of
August, 1999.
<TABLE>
<S> <C> <C>
ATWOOD AUTOMOTIVE INC.
By: /s/ DAVID R. BOVEE
-----------------------------------------
David R. Bovee
PRESIDENT
</TABLE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED ON THE 6TH DAY OF AUGUST, 1999.
<TABLE>
<CAPTION>
NAME TITLE
- ------------------------------ --------------------------
<C> <S>
/s/ DAVID R. BOVEE President and Director
- ------------------------------ (principal executive
David R. Bovee officer)
Vice President, Chief
/s/ STEPHEN E.K. GRAHAM Financial Officer and
- ------------------------------ Director (principal
Stephen E.K. Graham accounting and financial
officer)
</TABLE>
II-26
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Mark I Molded
Plastics, Inc. duly caused this Amendment No. 1 to Registration Statement on
Form S-4 to be signed on its behalf by the undersigned, thereunto duly
authorized, in City of Rochester Hills, State of Michigan, on the 6th day of
August, 1999.
<TABLE>
<S> <C> <C>
MARK I MOLDED PLASTICS, INC.
By: /s/ DAVID R. BOVEE
-----------------------------------------
David R. Bovee
PRESIDENT
</TABLE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED ON THE 6TH DAY OF AUGUST, 1999.
<TABLE>
<CAPTION>
NAME TITLE
- ------------------------------ --------------------------
<C> <S>
/s/ DAVID R. BOVEE President and Director
- ------------------------------ (principal executive
David R. Bovee officer)
Vice President, Chief
/s/ STEPHEN E.K. GRAHAM Financial Officer and
- ------------------------------ Director (principal
Stephen E.K. Graham accounting and financial
officer)
</TABLE>
II-27
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Mark I Molded
Plastics of Tennessee, Inc. duly caused this Amendment No. 1 to Registration
Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto
duly authorized, in City of Rochester Hills, State of Michigan, on the 6th day
of August, 1999.
<TABLE>
<S> <C> <C>
MARK I MOLDED PLASTICS OF TENNESSEE, INC.
By: /s/ DAVID R. BOVEE
-----------------------------------------
David R. Bovee
PRESIDENT
</TABLE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED ON THE 6TH DAY OF AUGUST, 1999.
<TABLE>
<CAPTION>
NAME TITLE
- ------------------------------ --------------------------
<C> <S>
/s/ DAVID R. BOVEE President and Director
- ------------------------------ (principal executive
David R. Bovee officer)
Vice President, Chief
/s/ STEPHEN E.K. GRAHAM Financial Officer and
- ------------------------------ Director (principal
Stephen E.K. Graham accounting and financial
officer)
</TABLE>
II-28
<PAGE>
Dura Operating Corp.
Dura Automotive Systems, Inc.
Dura Automotive Systems, Inc. Column Shifter Operations
Universal Tool & Stamping Company Inc.
Dura Automotive Systems Cable Operations, Inc.
Adwest Electronics, Inc.
Adwest Western Automotive, Inc.
X.E. Co.
Excel of Tennessee, L.P.
Excel Corporation
Excel Industries of Michigan, Inc.
Anderson Industries, Inc.
Atwood Industries, Inc.
Hydro Flame Corporation
Atwood Automotive Inc.
Mark I Molded Plastics, Inc.
Mark I Molded Plastics of Tennessee, Inc.
$300,000,000 9% Senior Subordinated Notes due 2009
EURO 100,000,000 9% Senior Subordinated Notes due 2009
Purchase Agreement
dated April 15, 1999
NationsBanc Montgomery Securities LLC
Bank of America International Limited
Donaldson, Lufkin & Jenrette Securities Corporation
Donaldson, Lufkin & Jenrette International
<PAGE>
Table of Contents
<TABLE>
<S> <C>
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
SECTION 1. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . .3
(A) NO REGISTRATION REQUIRED . . . . . . . . . . . . . . . . . . . .3
(B) NO INTEGRATION OF OFFERINGS OR GENERAL
SOLICITATION . . . . . . . . . . . . . . . . . . . . . . . . . .3
(C) ELIGIBILITY FOR RESALE UNDER RULE 144A . . . . . . . . . . . . .3
(D) THE OFFERING MEMORANDUM. . . . . . . . . . . . . . . . . . . . .3
(E) INCORPORATED DOCUMENTS . . . . . . . . . . . . . . . . . . . . .3
(F) THE PURCHASE AGREEMENT . . . . . . . . . . . . . . . . . . . . .4
(G) THE REGISTRATION RIGHTS AGREEMENTS, DTC
AGREEMENT AND EURO DEPOSITARY AGREEMENT. . . . . . . . . . . . .4
(H) AUTHORIZATION OF THE SECURITIES AND THE
EXCHANGE SECURITIES. . . . . . . . . . . . . . . . . . . . . . .4
(I) AUTHORIZATION OF THE INDENTURES. . . . . . . . . . . . . . . . .5
(J) DESCRIPTION OF THE SECURITIES AND THE
INDENTURES . . . . . . . . . . . . . . . . . . . . . . . . . . .5
(K) NO MATERIAL ADVERSE CHANGE . . . . . . . . . . . . . . . . . . .5
(L) INDEPENDENT ACCOUNTANTS. . . . . . . . . . . . . . . . . . . . .5
(M) PREPARATION OF THE FINANCIAL STATEMENTS. . . . . . . . . . . . .5
(N) INCORPORATION AND GOOD STANDING OF THE COMPANY
AND ITS SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . .6
(O) CAPITALIZATION AND OTHER CAPITAL STOCK MATTERS . . . . . . . . .6
(P) NON-CONTRAVENTION OF EXISTING INSTRUMENTS; NO
FURTHER AUTHORIZATIONS OR APPROVALS REQUIRED . . . . . . . . . .7
(Q) NO MATERIAL ACTIONS OR PROCEEDINGS . . . . . . . . . . . . . . .7
(R) INTELLECTUAL PROPERTY RIGHTS . . . . . . . . . . . . . . . . . .8
(S) ALL NECESSARY PERMITS, ETC.. . . . . . . . . . . . . . . . . . .8
(T) TITLE TO PROPERTIES. . . . . . . . . . . . . . . . . . . . . . .8
(U) TAX LAW COMPLIANCE . . . . . . . . . . . . . . . . . . . . . . .8
(V) COMPANY NOT AN "INVESTMENT COMPANY". . . . . . . . . . . . . . .8
(W) NO PRICE STABILIZATION OR MANIPULATION . . . . . . . . . . . . .8
(X) SOLVENCY . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
(Y) NO UNLAWFUL CONTRIBUTIONS OR OTHER PAYMENTS. . . . . . . . . . .9
(Z) COMPANY'S ACCOUNTING SYSTEM. . . . . . . . . . . . . . . . . . .9
(AA) COMPLIANCE WITH ENVIRONMENTAL LAWS . . . . . . . . . . . . . . .9
(BB) PERIODIC REVIEW OF COSTS OF ENVIRONMENTAL
COMPLIANCE . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(CC) ERISA COMPLIANCE . . . . . . . . . . . . . . . . . . . . . . . 10
(DD) REGULATION S REQUIREMENTS. . . . . . . . . . . . . . . . . . . 10
(EE) REPORTING. . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE SECURITIES. . . . . . . . . . . . . 10
(A) THE SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . 10
(B) THE CLOSING DATE . . . . . . . . . . . . . . . . . . . . . . . 11
(C) DELIVERY OF THE DOLLAR NOTES . . . . . . . . . . . . . . . . . 11
(D) DELIVERY OF EURO NOTES . . . . . . . . . . . . . . . . . . . . 11
(E) DELIVERY OF OFFERING MEMORANDUM TO THE INITIAL
PURCHASERS . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(F) INITIAL PURCHASERS AS QUALIFIED INSTITUTIONAL
BUYERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3. ADDITIONAL COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . 11
(A) INITIAL PURCHASERS' REVIEW OF PROPOSED
AMENDMENTS AND SUPPLEMENTS . . . . . . . . . . . . . . . . . . 11
(B) AMENDMENTS AND SUPPLEMENTS TO THE OFFERING
MEMORANDUM AND OTHER SECURITIES ACT MATTERS. . . . . . . . . . 12
i
<PAGE>
(C) COPIES OF THE OFFERING MEMORANDUM. . . . . . . . . . . . . . . 12
(D) BLUE SKY COMPLIANCE. . . . . . . . . . . . . . . . . . . . . . 12
(E) USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . 12
(F) THE DEPOSITARY . . . . . . . . . . . . . . . . . . . . . . . . 13
(G) ADDITIONAL ISSUER INFORMATION. . . . . . . . . . . . . . . . . 13
(H) FUTURE REPORTS TO THE INITIAL PURCHASERS . . . . . . . . . . . 13
(I) NO INTEGRATION . . . . . . . . . . . . . . . . . . . . . . . . 13
(J) LEGENDED SECURITIES. . . . . . . . . . . . . . . . . . . . . . 13
(K) PORTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(L) LUXEMBOURG LISTING . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 4. PAYMENT OF EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE INITIAL PURCHASERS. . . . . . . . 14
(A) ACCOUNTANTS' COMFORT LETTER. . . . . . . . . . . . . . . . . . 14
(B) NO MATERIAL ADVERSE CHANGE OR RATINGS AGENCY
CHANGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(C) OPINION OF COUNSEL FOR THE COMPANY . . . . . . . . . . . . . . 15
(D) OPINION OF COUNSEL FOR THE INITIAL PURCHASERS. . . . . . . . . 15
(E) OFFICERS' CERTIFICATE. . . . . . . . . . . . . . . . . . . . . 15
(F) BRING-DOWN COMFORT LETTER. . . . . . . . . . . . . . . . . . . 15
(G) PORTAL AND LUXEMBOURG STOCK EXCHANGE LISTINGS. . . . . . . . . 15
(H) REGISTRATION RIGHTS AGREEMENTS . . . . . . . . . . . . . . . . 15
(I) ADDITIONAL DOCUMENTS . . . . . . . . . . . . . . . . . . . . . 15
SECTION 6. REIMBURSEMENT OF INITIAL PURCHASERS' EXPENSES. . . . . . . . . . . . . 16
SECTION 7. OFFER, SALE AND RESALE PROCEDURES. . . . . . . . . . . . . . . . . . . 16
SECTION 8. INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(A) INDEMNIFICATION OF THE INITIAL PURCHASERS. . . . . . . . . . . 17
(B) INDEMNIFICATION OF THE COMPANY, ITS DIRECTORS
AND OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . 18
(C) NOTIFICATIONS AND OTHER INDEMNIFICATION
PROCEDURES . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(D) SETTLEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 9. CONTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 10. TERMINATION OF THIS AGREEMENT. . . . . . . . . . . . . . . . . . . . . 21
SECTION 11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. . . . . . . . . . 21
SECTION 12. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 13. SUCCESSORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 14. PARTIAL UNENFORCEABILITY . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 15. GOVERNING LAW PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 16. DEFAULT OF ONE OR MORE OF THE SEVERAL INITIAL
PURCHASERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 17. GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 18. AGREEMENT AMONG INITIAL PURCHASERS . . . . . . . . . . . . . . . . . . 23
</TABLE>
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Purchase Agreement
April 15, 1999
NATIONSBANC MONTGOMERY SECURITIES LLC
BANK OF AMERICA INTERNATIONAL LIMITED
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
DONALDSON, LUFKIN & JENRETTE INTERNATIONAL
As Initial Purchasers
c/o NATIONSBANC MONTGOMERY SECURITIES LLC
231 South LaSalle Street, 18th Floor
Chicago, Illinois 60697
Ladies and Gentlemen:
Introduction. Dura Operating Corp., a Delaware corporation (the
"Company), proposes to issue and sell to (i) NationsBanc Montgomery Securities
LLC and Donaldson, Lufkin & Jenrette Securities Corporation (the "Dollar Notes
Initial Purchasers") an aggregate of $300,000,000 in principal amount of its 9%
Senior Subordinated Notes due 2009 (the "Dollar Notes") to be issued pursuant to
the provisions of an indenture (the "Dollar Notes Indenture") to be dated as of
the Closing Date (as defined below) between the Company, Dura Automotive
Systems, Inc., the direct parent corporation of the Company ("DASI"), Dura
Automotive Systems, Inc. Column Shifter Operations, Universal Tool & Stamping
Company Inc., Dura Automotive Systems Cable Operations, Inc., Adwest
Electronics, Inc., Adwest Western Automotive, Inc., X.E. Co., Excel of
Tennessee, L.P., Excel Corporation, Excel Industries of Michigan, Inc., Anderson
Industries, Inc., Atwood Industries, Inc., Hydro Flame Corporation, Atwood
Automotive Inc., Mark I Molded Plastics, Inc. and Mark I Molded Plastics of
Tennessee, Inc. (collectively with DASI, the "Guarantors") and U.S. Bank Trust
National Association, as trustee (the "Dollar Notes Trustee") and (ii) Bank of
America International Limited and Donaldson, Lufkin & Jenrette Securities
International (the "Euro Notes Initial Purchasers," and together with the Dollar
Notes Initial Purchasers, the "Initial Purchasers") an aggregate of EURO
100,000,000 in principal amount of its 9% Senior Subordinated Notes due 2009
(the "Euro Notes," and together with the Dollar Notes, the "Notes") to be issued
pursuant to the provisions of an indenture (the "Euro Notes Indenture," and
together with the Dollar Notes Indenture, the "Indenture") to be dated as of the
Closing Date between the Company and the Guarantors and U.S. Bank Trust National
Association, as trustee (the "Euro Notes Trustee"). NationsBanc Montgomery
Securities LLC and Donaldson, Lufkin and Jenrette Securities Corporation have
agreed to act as the Initial Purchasers in connection with the offering and sale
of the Dollar Notes, and Bank of America International Limited and Donaldson,
Lufkin and Jenrette International have agreed to act as the Initial Purchasers
in connection with the offering and sale of the Euro Notes.
Dollar Notes issued in book-entry form will be issued in the name
of Cede & Co., as nominee of The Depository Trust Company (the "Depositary")
pursuant to a DTC Agreement, to be dated as of the Closing Date (as defined in
Section 2) (the "DTC Agreement"), among the Company, the Trustee and the
Depositary. Euro Notes issued in book-entry form will be deposited at
Industrial Bank of Japan (Luxembourg) S.A. in London as depositary (such
capacity, the "Euro Depositary") for the Euroclear System ("Euroclear") pursuant
to an agreement (the "Euro Depositary Agreement") among the Company, the Trustee
and the Paying Agent.
The holders of the Notes will be entitled to the benefits of the
Dollar Notes Registration Rights Agreement and the Euro Notes Registration
Rights Agreement, as applicable, (collectively, the "Registration Rights
Agreements" and, each, individually, a "Registration Rights Agreement") to be
dated the Closing Date, substantially in the form of Exhibits B-1 and B-2
hereto, pursuant to which the Company
<PAGE>
will agree to file, within 60 days of the Closing Date, a registration statement
with the Commission (as defined below) registering the Exchange Offers (as
defined below) under the Securities Act (as defined below).
The payment of principal of, premium and Liquidated Damages (as
defined in the Indentures), if any, and interest on the Notes and the Exchange
Notes (as defined below) will be fully and unconditionally guaranteed on a
senior unsecured basis, jointly and severally, by the Guarantors and any
subsidiary of the Company formed or acquired after the Closing Date that
executes an additional guarantee in accordance with the terms of the Indentures,
and their respective successors and assigns, pursuant to their guaranties (the
"Guaranties"). The Notes and the Guaranties attached thereto are herein
collectively referred to as the "Securities"; and the Exchange Notes and the
Guaranties attached thereto are herein collectively referred to as the "Exchange
Securities".
The Company understands that the Initial Purchasers propose to
make an offering of the Securities on the terms and in the manner set forth
herein and in the Offering Memorandum (as defined below) and agrees that the
Initial Purchasers may resell, subject to the conditions set forth herein, all
or a portion of the Securities to purchasers (the "Subsequent Purchasers") at
any time after the date of this Agreement. The Securities are to be offered and
sold to or through the Initial Purchasers without being registered with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933 (as amended, the "Securities Act," which term, as used herein, includes
the rules and regulations of the Commission promulgated thereunder), in reliance
upon exemptions therefrom. The terms of the Securities and the Indentures will
require that investors that acquire Securities expressly agree that Securities
may only be resold or otherwise transferred, after the date hereof, if such
Securities are registered for sale under the Securities Act or if an exemption
from the registration requirements of the Securities Act is available (including
the exemptions afforded by Rule 144A ("Rule 144A") or Regulation S
("Regulation S") thereunder).
The Company has prepared and delivered to each Initial Purchaser
copies of a Preliminary Offering Memorandum, dated March 31, 1999 (the
"Preliminary Offering Memorandum"), and has prepared and will deliver to each
Initial Purchaser, copies of the Offering Memorandum, dated April 15, 1999,
describing the terms of the Securities, each for use by such Initial Purchaser
in connection with its solicitation of offers to purchase the Securities. As
used herein, the "Offering Memorandum" shall mean, with respect to any date or
time referred to in this Agreement, the Company's Offering Memorandum, dated
April 15, 1999, including amendments or supplements thereto, including the
international supplement thereto, any exhibits thereto and the Incorporated
Documents (as defined by Section 1(e) below), in the most recent form that has
been prepared and delivered by the Company to the Initial Purchasers in
connection with their solicitation of offers to purchase Securities. Further,
any reference to the Preliminary Offering Memorandum or the Offering Memorandum
shall be deemed to refer to and include any Additional Issuer Information (as
defined in Section 3(g)) furnished by the Company prior to the completion of the
distribution of the Securities.
All references in this Agreement to financial statements and
schedules and other information which is "contained," "included" or "stated" in
the Offering Memorandum (or other references of like import) shall be deemed to
mean and include all such financial statements and schedules and other
information which are incorporated by reference in the Offering Memorandum; and
all references in this Agreement to amendments or supplements to the Offering
Memorandum shall be deemed to mean and include the filing of any document under
the Securities Exchange Act of 1934 (as amended, the "Exchange Act," which term,
as used herein, includes the rules and regulations of the Commission promulgated
thereunder) which is incorporated or deemed to be incorporated by reference in
the Offering Memorandum.
The Company and the Guarantors hereby confirm their agreements
with the Initial Purchasers as follows:
2
<PAGE>
Section 1. Representations and Warranties. The Company and the
Guarantors, jointly and severally, hereby represent, warrant and covenant to
each Initial Purchaser as follows:
(a) NO REGISTRATION REQUIRED. Subject to compliance by the
Initial Purchasers with the representations and warranties set forth in
Section 2(f) hereof and with the procedures set forth in Section 7
hereof, it is not necessary in connection with the offer, sale and
delivery of the Securities to the Initial Purchasers and to each
Subsequent Purchaser in the manner contemplated by this Agreement and the
Offering Memorandum to register the Securities under the Securities Act
or, until such time as the Exchange Securities are issued pursuant to an
effective registration statement, to qualify the Indentures under the
Trust Indenture Act of 1939 (the "Trust Indenture Act," which term, as
used herein, includes the rules and regulations of the Commission
promulgated thereunder).
(b) NO INTEGRATION OF OFFERINGS OR GENERAL SOLICITATION. The
Company has not, directly or indirectly, solicited any offer to buy or
offered to sell, and will not, directly or indirectly, solicit any offer
to buy or offer to sell, in the United States or to any United States
citizen or resident, any security which is or would be integrated with
the sale of the Securities in a manner that would require the Securities
to be registered under the Securities Act. None of the Company, its
affiliates (as such term is defined in Rule 501(b) under the Securities
Act (each, an "Affiliate")), or, to the Company's knowledge, any person
acting on its or any of their behalf (other than the Initial Purchasers,
as to whom the Company makes no representation or warranty) has engaged
or will engage, in connection with the offering of the Securities, in any
form of general solicitation or general advertising within the meaning of
Rule 502(c) under the Securities Act. With respect to those Securities
sold in reliance upon Regulation S, (i) none of the Company, its
Affiliates or, to the Company's knowledge, any person acting on its or
their behalf (other than the Initial Purchasers, as to whom the Company
makes no representation or warranty) has engaged or will engage in any
directed selling efforts within the meaning of Regulation S and (ii) each
of the Company and its Affiliates and, to the Company's knowledge, any
person acting on its or their behalf (other than the Initial Purchasers,
as to whom the Company makes no representation or warranty) has complied
and will comply with the offering restrictions set forth in Regulation S.
(c) ELIGIBILITY FOR RESALE UNDER RULE 144A. The Securities are
eligible for resale pursuant to Rule 144A and will not be, at the Closing
Date, of the same class as securities listed on a national securities
exchange registered under Section 6 of the Exchange Act or quoted in a
U.S. automated interdealer quotation system.
(d) THE OFFERING MEMORANDUM. The Offering Memorandum does not,
and at the Closing Date will not, include an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which
they were made, not misleading; PROVIDED that this representation,
warranty and agreement shall not apply to statements in or omissions from
the Offering Memorandum made in reliance upon and in conformity with
information furnished to the Company in writing by any Initial Purchaser
through NationsBanc Montgomery Securities LLC expressly for use in the
Offering Memorandum. Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its date, contains all the information
specified in, and meeting the requirements of, Rule 144A(d)(4). The
Company has not distributed and will not distribute, prior to the later
of the Closing Date and the completion of the Initial Purchasers'
distribution of the Securities, any offering material in connection with
the offering and sale of the Securities other than a Preliminary Offering
Memorandum or the Offering Memorandum.
(e) INCORPORATED DOCUMENTS. The Offering Memorandum
incorporates by reference the Current Report of the Company on Form 8-K
filed with the Commission dated May 14, 1998, as amended on August 31,
1998 and June 12, 1998, the Current Reports of Excel Industries Inc. on
Form 8-K filed with the Commission on September 14 and November 19, 1998
and as amended on November 12 and December 15, 1998 and the Company's
Prospectus, dated
3
<PAGE>
June 11, 1998, filed under Rule 424(b). The documents incorporated or
deemed to be incorporated by reference in the Offering Memorandum at the
time they were or hereafter are filed with the Commission (collectively,
the "Incorporated Documents") complied and will comply in all material
respects with the requirements of the Exchange Act.
(f) THE PURCHASE AGREEMENT. This Agreement has been duly
authorized, executed and delivered by, and is a valid and binding
agreement of, the Company and the Guarantors, enforceable in accordance
with its terms, except as rights to indemnification hereunder may be
limited by applicable law and except as the enforcement hereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of
creditors or by general equitable principles.
(g) THE REGISTRATION RIGHTS AGREEMENTS, DTC AGREEMENT AND EURO
DEPOSITARY AGREEMENT. At the Closing Date, each of the Registration
Rights Agreements, the DTC Agreement and the Euro Depositary Agreement
will be duly authorized, executed and delivered by, and will be a valid
and binding agreement of, the Company and the Guarantors, enforceable in
accordance with its terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of
creditors or by general equitable principles and except as rights to
indemnification under the Registration Rights Agreements may be limited
by applicable law. Pursuant to the Registration Rights Agreements, the
Company will agree to file with the Commission, under the circumstances
set forth therein, (i) a registration statement under the Securities Act
relating to: (A) another series of debt securities of the Company with
terms substantially identical to the Dollar Notes (the "Dollar Exchange
Notes") to be offered in exchange for the Dollar Notes (the "Dollar
Exchange Offer"), and (B) another series of debt securities of the
Company with terms substantially identical to the Euro Notes (the "Euro
Exchange Notes," and together with the Dollar Exchange Notes, the
"Exchange Notes") to be offered in exchange for the Euro Notes (the "Euro
Exchange Offer," and together with the Dollar Exchange Offer, the
"Exchange Offers") and (ii) to the extent required by the Registration
Rights Agreements, a shelf registration statement pursuant to Rule 415 of
the Securities Act relating to the resale by certain holders of the
Dollar Notes and the Euro Notes, as the case may be, and in each case, to
use its reasonable best efforts to cause such registration statements to
be declared effective.
(h) AUTHORIZATION OF THE SECURITIES AND THE EXCHANGE
SECURITIES. (i) The Dollar Notes and the Euro Notes to be purchased by
the Dollar Notes Initial Purchasers and the Euro Notes Initial
Purchasers, respectively, from the Company are in the form contemplated
by the applicable Indenture, have been duly authorized for issuance and
sale pursuant to this Agreement and the applicable Indenture and, at the
Closing Date, will have been duly executed by the Company and, when
authenticated in the manner provided for in the applicable Indenture and
delivered against payment of the purchase price therefor, will constitute
valid and binding agreements of the Company and the Guarantors
enforceable in accordance with their terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles and will be
entitled to the benefits of the applicable Indenture. (ii) The Dollar
Exchange Notes and the Euro Exchange Notes have been duly and validly
authorized for issuance by the Company, and when issued and authenticated
in accordance with the terms of the applicable Indenture, the applicable
Registration Rights Agreement and the applicable Exchange Offer, will
constitute valid and binding obligations of the Company and the
Guarantors enforceable in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, or similar laws relating to or affecting
enforcement of the rights and remedies of creditors or by general
principles of equity and will be entitled to the benefits of the
Indentures. (iii) The Guaranties of the Notes and the Exchange Notes are
in the respective forms contemplated by the Indentures, have been duly
authorized for issuance and sale pursuant to this Agreement and the
Indentures and, at the Closing Date, the Guaranties of the Notes will
have been duly executed by each of the applicable
4
<PAGE>
Guarantors and, when the Dollar Notes and the Euro Notes have been
authenticated in the manner provided for in the applicable Indenture and
delivered against payment of the purchase price therefor, will constitute
valid and binding agreements of the Guarantors, enforceable in accordance
with their terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by
general equitable principles and will be entitled to the benefits of the
applicable Indenture.
(i) AUTHORIZATION OF THE INDENTURES. The Indentures have been
duly authorized by the Company and the Guarantors and, at the Closing
Date, will have been duly executed and delivered by the Company and the
Guarantors and will constitute valid and binding agreements of the
Company and the Guarantors, enforceable in accordance with their terms,
except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to
or affecting the rights and remedies of creditors or by general equitable
principles.
(j) DESCRIPTION OF THE SECURITIES AND THE INDENTURES. The
Notes, the Exchange Notes, the Guaranties of the Notes and the Exchange
Notes and the Indentures will conform in all material respects to the
respective statements relating thereto contained in the Offering
Memorandum.
(k) NO MATERIAL ADVERSE CHANGE. Except as otherwise disclosed
in the Offering Memorandum, subsequent to the respective dates as of
which information is given in the Offering Memorandum: (i) there has been
no material adverse change, or any development that could reasonably be
expected to result in a material adverse change, in the financial
condition, or in the earnings, business, operations or prospects, whether
or not arising from transactions in the ordinary course of business, of
the Company and its subsidiaries, considered as one entity (any such
change is called a "Material Adverse Change"); (ii) the Company and its
subsidiaries, considered as one entity, have not incurred any material
liability or obligation, indirect, direct or contingent, not in the
ordinary course of business nor entered into any material transaction or
agreement not in the ordinary course of business; and (iii) there has
been no dividend or distribution of any kind declared, paid or made by
the Company or, except for dividends paid to the Company or other
subsidiaries, any of its subsidiaries on any class of capital stock or
repurchase or redemption by the Company or any of its subsidiaries of any
class of capital stock.
(l) INDEPENDENT ACCOUNTANTS. Arthur Andersen LLP, who have
expressed their opinion with respect to the financial statements (which
term as used in this Agreement includes the related notes thereto) of
DASI included in the Offering Memorandum are independent public or
certified public accountants within the meaning of Regulation S-X under
the Securities Act and the Exchange Act. PricewaterhouseCoopers LLP, who
have expressed their opinion with respect to the financial statements
(which term as used in this Agreement includes the related notes thereto)
of Excel Industries, Inc. included in the Offering Memorandum are
independent public or certified public accountants within the meaning of
Regulation S-X under the Securities Act and the Exchange Act. KPMG Audit
Plc, who have expressed their opinion with respect to the financial
statements (which term as used in this Agreement includes the related
notes thereto) of Adwest Automotive Plc included in the Offering
Memorandum are independent public or certified public accountants within
the meaning of Regulation S-X under the Securities Act and the Exchange
Act.
(m) PREPARATION OF THE FINANCIAL STATEMENTS. The financial
statements of DASI, together with the related notes, included in the
Offering Memorandum present fairly the consolidated financial position of
DASI and its subsidiaries as of and at the dates indicated and the
results of their operations and cash flows for the periods specified. To
our knowledge, the financial statements of Excel Industries, Inc. and
Adwest Automotive Plc, together with the related notes thereto, included
in the Offering Memorandum present fairly the consolidated
5
<PAGE>
financial position of Excel Industries, Inc. and its subsidiaries and
Adwest Automotive Plc and its subsidiaries, respectively, as of and at
the dates indicated and the results of their operations and cash flows
for the periods specified. Such financial statements of DASI and Excel
have been prepared in conformity with generally accepted accounting
principles as applied in the United States applied on a consistent basis
throughout the periods involved, except as may be expressly stated in the
related notes thereto. The financial statements of Adwest Automotive Plc
have been prepared in conformity with accounting principles generally
accepted in the United Kingdom applied on a basis consistent throughout
the periods involved, except as may be expressly stated in the related
notes thereto. The historical financial data set forth in the Offering
Memorandum under the captions "Offering Memorandum Summary--Summary
Historical and Proforma Financial Data" and "Selected Consolidated
Financial Data" fairly present the information set forth therein on a
basis consistent with that of the audited financial statements contained
in the Offering Memorandum. The pro forma consolidated financial
statements of DASI and its subsidiaries and the related notes thereto
included under the caption "Offering Memorandum Summary--Summary
Historical and Pro Forma Financial Data", "Unaudited Proforma Financial
Statements" and elsewhere in the Offering Memorandum present fairly the
information contained therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements and have been properly presented on the bases described
therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give
effect to the transactions and circumstances referred to therein.
(n) INCORPORATION AND GOOD STANDING OF THE COMPANY AND ITS
SUBSIDIARIES. Each of the Company, the Guarantors and each other
Significant Subsidiary (as that term is defined in Rule 1-02(w) of
Regulation S-X) has been duly incorporated or formed and is validly
existing in good standing under the laws of the jurisdiction of its
organization and has power and authority to own, lease and operate its
properties and to conduct its business as described in the Offering
Memorandum and, in the case of the Company and the Guarantors to enter
into and perform their respective obligations under each of this
Agreement, the Registration Rights Agreements, the DTC Agreement, the
Euro Depositary Agreement, the Notes, the Exchange Notes and the
Indentures. Each of the Company, the Guarantors and each other
Significant Subsidiary is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except for such
jurisdictions where the failure to so qualify or to be in good standing
would not, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Change. All of the issued and outstanding
capital stock of the Guarantors and each other Significant Subsidiary has
been duly authorized and validly issued, is fully paid and nonassessable
and is owned by the Company, directly or through subsidiaries, free and
clear of any security interest, mortgage, pledge, lien, encumbrance or
claim (except for those set forth in the Offering Memorandum and such
other security interest, mortgage, pledge, lien, encumbrance or claim
that would not reasonably be expected to have a Material Adverse Change).
The Company does not own or control, directly or indirectly, any
corporation, association or other entity other than the subsidiaries
listed in Exhibit 21 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1998.
(o) CAPITALIZATION AND OTHER CAPITAL STOCK MATTERS. At
December 31, 1998, on a consolidated basis, after giving pro forma effect
to the issuance and sale of the Notes pursuant hereto, DASI would have an
authorized and outstanding capitalization as set forth in the Offering
Memorandum under the caption "Capitalization" (other than for subsequent
issuances of capital stock, if any, pursuant to employee benefit plans
described in the Offering Memorandum or upon exercise of outstanding
options described in the Offering Memorandum). The Class A Common Stock
and Class B Common Stock (the "Common Stock") conform in all material
respects to the description thereof set forth in the Offering Memorandum.
All of the outstanding shares of Common Stock have been duly authorized
and validly issued, are fully paid and nonassessable and have been issued
in compliance with federal and state securities laws. None of the
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outstanding shares of Common Stock were issued in violation of any
preemptive rights, rights of first refusal or other similar rights to
subscribe for or purchase securities of the Company. There are no
authorized or outstanding options, warrants, preemptive rights, rights of
first refusal or other rights to purchase, or equity or debt securities
convertible into or exchangeable or exercisable for, any capital stock of
the Company or any of its subsidiaries other than those described in the
Offering Memorandum. The description of the Company's stock option,
stock purchase and other stock plans or arrangements, and the options or
other rights granted thereunder, set forth in the Offering Memorandum
describes such plans, arrangements, options and rights in all material
respects.
(p) NON-CONTRAVENTION OF EXISTING INSTRUMENTS; NO FURTHER
AUTHORIZATIONS OR APPROVALS REQUIRED. Neither the Company nor any of the
Guarantors or any other Significant Subsidiary is in violation of its
charter or by-laws or is in default (or, with the giving of notice or
lapse of time, would be in default) ("Default") under any indenture,
mortgage, loan or credit agreement, note, contract, franchise, lease or
other instrument to which the Company, the Guarantors or any other
Significant Subsidiary is a party or by which it or any of them may be
bound (including, without limitation, the Company's New Credit Facility
(as defined in the Offering Memorandum)), or to which any of the property
or assets of the Company, the Guarantors or any of its Significant
Subsidiaries is subject (each, an "Existing Instrument"), except for such
Defaults as would not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Change. The Company's and the
Guarantors' execution, delivery and performance of this Agreement, the
Registration Rights Agreements, the DTC Agreement, the Euro Depositary
Agreement and the Indentures, and the issuance and delivery of the Notes
or the Exchange Notes, and consummation of the transactions contemplated
hereby and thereby and by the Offering Memorandum (i) have been duly
authorized by all necessary action and will not result in any violation
of the provisions of the charter or by-laws of the Company, the
Guarantors or any other Significant Subsidiary of the Company, (ii) will
not conflict with or constitute a breach of, or Default under, or result
in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company, the Guarantors or any other
Significant Subsidiary of the Company pursuant to, or require the consent
of any other party to, any Existing Instrument, except for such
conflicts, breaches, Defaults, liens, charges or encumbrances as would
not, individually or in the aggregate, reasonably be expected to result
in a Material Adverse Change and (iii) will not result in any violation
of any law, administrative regulation or administrative or court decree
applicable to the Company, the Guarantors or any subsidiary of the
Company, except such violations of law, administrative regulation or
administrative or court decree that would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Change.
No consent, approval, authorization or other order of, or registration or
filing with, any court or other governmental or regulatory authority or
agency, is required for the Company's or the Guarantors' execution,
delivery and performance of this Agreement, the Registration Rights
Agreements, the DTC Agreement, the Euro Depositary Agreement or the
Indentures, or the issuance and delivery of the Notes or the Exchange
Notes, or consummation of the transactions contemplated hereby and
thereby and by the Offering Memorandum, except (i) such as have been
obtained or made by the Company and are in full force and effect under
the Securities Act, applicable state securities or blue sky laws or (ii)
such as may be required by federal and state securities laws with respect
to the Company's obligations under the Registration Rights Agreements.
(q) NO MATERIAL ACTIONS OR PROCEEDINGS. Except as otherwise
disclosed in the Offering Memorandum, there are no legal or governmental
actions, suits or proceedings pending or, to the best of the Company's
knowledge, threatened (i) against or affecting the Company, the
Guarantors or any other Significant Subsidiaries, (ii) which has as the
subject thereof any property owned or leased by, the Company, the
Guarantors or any other Significant Subsidiaries, where in any such case
(A) there is a reasonable possibility that such action, suit or
proceeding might be determined adversely to the Company, the Guarantors
or such Significant Subsidiary and (B) any such action, suit or
proceeding, if so determined adversely, would reasonably be expected to
result
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in a Material Adverse Change or adversely affect the consummation of the
transactions contemplated by this Agreement. No material labor dispute
with the employees of the Company, the Guarantors or any other
Significant Subsidiary, exists or, to the best of the Company's
knowledge, is threatened or imminent.
(r) INTELLECTUAL PROPERTY RIGHTS. The Company and its
subsidiaries own or possess those trademarks, trade names, patent rights,
copyrights, licenses, approvals, trade secrets and other similar rights
(collectively, "Intellectual Property Rights") that are material to the
conduct their businesses as now conducted; and the expected expiration of
any of such Intellectual Property Rights would not reasonably be expected
to result in a Material Adverse Change. Neither the Company nor any of
its subsidiaries has received any notice of infringement or conflict with
asserted Intellectual Property Rights of others, which infringement or
conflict, if the subject of an unfavorable decision, would reasonably be
expected to result in a Material Adverse Change.
(s) ALL NECESSARY PERMITS, ETC. Except as otherwise disclosed
in the Offering Memorandum, the Company, the Guarantors and each other
Significant Subsidiary possess all material certificates, authorizations
or permits necessary to conduct their respective businesses, and neither
the Company nor any subsidiary has received any notice of proceedings
relating to the revocation or modification of, or non-compliance with,
any such certificate, authorization or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
could reasonably be expected to result in a Material Adverse Change.
(t) TITLE TO PROPERTIES. DASI and each of its subsidiaries has
good and marketable title to all the properties and assets reflected as
owned in the financial statements referred to in Section 1(m) above (or
elsewhere in the Offering Memorandum), in each case free and clear of any
security interests, mortgages, liens, encumbrances, equities, claims and
other defects, except as otherwise disclosed in the Offering Memorandum
or such as do not materially interfere with the use made or proposed to
be made of such property by the Company or such subsidiary. The real
property, improvements, equipment and personal property held under lease
by the Company or any subsidiary are held under valid and enforceable
leases, with such exceptions as are not material and do not materially
interfere with the use made or proposed to be made of such real property,
improvements, equipment or personal property by the Company or such
subsidiary.
(u) TAX LAW COMPLIANCE. DASI and its consolidated subsidiaries
have filed all necessary federal, state and foreign income and franchise
tax returns and have paid all taxes required to be paid by any of them
and, if due and payable, any related or similar assessment, fine or
penalty levied against any of them except as may be being contested in
good faith and by appropriate proceedings. The Company has made adequate
charges, accruals and reserves in the applicable financial statements
referred to in Section 1(m) above in respect of all federal, state and
foreign income and franchise taxes for all periods as to which the tax
liability of the Company or any of its consolidated subsidiaries has not
been finally determined.
(v) COMPANY NOT AN "INVESTMENT COMPANY". The Company is not,
and after receipt of payment for the Notes will not be, an "investment
company" within the meaning of Investment Company Act and will conduct
its business in a manner so that it will not become subject to the
Investment Company Act.
(w) NO PRICE STABILIZATION OR MANIPULATION. The Company has
not taken and will not take, directly or indirectly, any action designed
to or that might be reasonably expected to cause or result in
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Notes.
(x) SOLVENCY. The Company is, and immediately after the
Closing Date will be, Solvent. As used herein, the term "Solvent" means,
with respect to the Company on a particular
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date, that on such date (i) the fair market value of the assets of the
Company is greater than the total amount of liabilities (including
contingent liabilities) of the Company, (ii) the present fair salable
value of the assets of the Company is greater than the amount that will
be required to pay the probable liabilities of the Company on its debts
as they become absolute and matured, (iii) the Company is able to realize
upon its assets and pay its debts and other liabilities, including
contingent obligations, as they mature and (iv) the Company does not have
unreasonably small capital.
(y) NO UNLAWFUL CONTRIBUTIONS OR OTHER PAYMENTS. Except as
otherwise disclosed in the Offering Memorandum, neither the Company nor
any of its subsidiaries nor, to the best of the Company's knowledge, any
employee or agent of the Company or any subsidiary, has made any
contribution or other payment to any official of, or candidate for, any
federal, state or foreign office in violation of any law.
(z) COMPANY'S ACCOUNTING SYSTEM. The Company maintains a
system of accounting controls sufficient to provide reasonable assurances
that (i) transactions are executed in accordance with management's
general or specific authorization; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles as applied in the United
States and to maintain accountability for assets; (iii) access to assets
is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(aa) COMPLIANCE WITH ENVIRONMENTAL LAWS. Except as otherwise
disclosed in the Offering Memorandum or as would not, individually or in
the aggregate, reasonably be expected to result in a Material Adverse
Change (i) neither the Company nor any of its subsidiaries is in
violation of any federal, state, local or foreign law or regulation
relating to pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water, groundwater,
land surface or subsurface strata) or wildlife, including without
limitation, laws and regulations relating to emissions, discharges,
releases or threatened releases of chemicals, pollutants, contaminants,
wastes, toxic substances, hazardous substances, petroleum and petroleum
products (collectively, "Materials of Environmental Concern"), or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Materials of
Environmental Concern (collectively, "Environmental Laws"), which
violation includes, but is not limited to, noncompliance with any permits
or other governmental authorizations required for the operation of the
business of the Company or its subsidiaries under applicable
Environmental Laws, or noncompliance with the terms and conditions
thereof, nor has the Company or any of its subsidiaries received any
written communication, whether from a governmental authority, citizens
group, employee or otherwise, that alleges that the Company or any of its
subsidiaries is in violation of any Environmental Law; (ii) there is no
claim, action or cause of action filed with a court or governmental
authority, no investigation with respect to which the Company has
received written notice, and no written notice by any person or entity
alleging potential liability for investigatory costs, cleanup costs,
governmental responses costs, natural resources damages, property
damages, personal injuries, attorneys' fees or penalties arising out of,
based on or resulting from the presence, or release into the environment,
of any Material of Environmental Concern at any location owned, leased or
operated by the Company or any of its subsidiaries, now or in the past
(collectively, "Environmental Claims"), pending or, to the best of the
Company's knowledge, threatened against the Company or any of its
subsidiaries or any person or entity whose liability for any
Environmental Claim the Company or any of its subsidiaries has retained
or assumed either contractually or by operation of law; and (iii) to the
best of the Company's knowledge, there are no past or present actions,
activities, circumstances, conditions, events or incidents, including,
without limitation, the release, emission, discharge, presence or
disposal of any Material of Environmental Concern, that reasonably could
result in a violation of any Environmental Law or form the basis of a
potential Environmental Claim against the Company or any of its
subsidiaries or against any person or entity whose liability for any
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Environmental Claim the Company or any of its subsidiaries has retained
or assumed either contractually or by operation of law.
(bb) PERIODIC REVIEW OF COSTS OF ENVIRONMENTAL COMPLIANCE. In
the ordinary course of its business, the Company conducts a periodic
review of the effect of Environmental Laws on the business, operations
and properties of the Company and its subsidiaries, in the course of
which it identifies and evaluates associated costs and liabilities
(including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to
third parties). On the basis of such review and the amount of its
established reserves, the Company has reasonably concluded that such
associated costs and liabilities would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Change.
(cc) ERISA COMPLIANCE. The Company and its subsidiaries and any
"employee benefit plan" (as defined under the Employee Retirement Income
Security Act of 1974, as amended, and the regulations and published
interpretations thereunder (collectively, "ERISA")) established or
maintained by the Company, its subsidiaries or their "ERISA Affiliates"
(as defined below) are in compliance in all material respects with ERISA
or, if not in material compliance, would not reasonably be expected to
result in Material Adverse Change. "ERISA Affiliate" means, with respect
to the Company or a subsidiary, any member of any group of organizations
described in Sections 414(b), (c), (m) or (o) of the Internal Revenue
Code of 1986, as amended, and the regulations and published
interpretations thereunder (the "Code") of which the Company or such
subsidiary is a member. No "reportable event" (as defined under ERISA)
has occurred or is reasonably expected to occur with respect to any
"employee benefit plan" established or maintained by the Company, its
subsidiaries or any of their ERISA Affiliates. No "employee benefit
plan" established or maintained by the Company, its subsidiaries or any
of their ERISA Affiliates, if such "employee benefit plan" were
terminated, would have any material "amount of unfunded benefit
liabilities" (as defined under ERISA). Neither the Company, its
subsidiaries nor any of their ERISA Affiliates has incurred or reasonably
expects to incur any material liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, any "employee benefit
plan" or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each
"employee benefit plan" established or maintained by the Company, its
subsidiaries or any of their ERISA Affiliates that is intended to be
qualified under Section 401(a) of the Code is so qualified and nothing
has occurred, whether by action or failure to act, which would cause the
loss of such qualification.
(dd) REGULATION S REQUIREMENTS. The Company, the Guarantors and
their respective affiliates and, to the best of their knowledge, all
persons acting on their behalf (other than the Initial Purchasers, as to
whom the Company and the Guarantors make no representation) have complied
with and will comply with the offering restrictions requirements of
Regulation S in connection with the offering of the Securities outside
the United States and, in connection therewith, the Offering Memorandum
will contain the disclosure required by Rule 902(h).
(ee) REPORTING. Each of the Company and the Guarantors is a
"reporting issuer" as defined in Rule 902 under the Securities Act.
Any certificate signed by an officer of the Company or the
Guarantors and delivered to the Initial Purchasers or to counsel for the
Initial Purchasers shall be deemed to be a representation and warranty by
the Company to each Initial Purchaser as to the matters set forth
therein.
Section 2. Purchase, Sale and Delivery of the Securities.
(a) THE SECURITIES. The Company agrees to issue and sell to
the several Dollar Notes Initial Purchasers, severally and not jointly,
all of the Dollar Notes upon the terms herein set forth. The Company
agrees to issue and sell to the several Euro Notes Initial Purchasers,
severally
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and not jointly, all of the Euro Notes upon the terms herein set forth.
On the basis of the representations, warranties and agreements herein
contained, and upon the terms but subject to the conditions herein set
forth, the Initial Purchasers agree, severally and not jointly, to
purchase from the Company the aggregate principal amount of Dollar Notes
and Euro Notes set forth opposite their names on SCHEDULE A, at a
purchase price of 97.5% of the principal amount thereof payable on the
Closing Date.
(b) THE CLOSING DATE. Delivery of certificates for the Notes
in definitive form to be purchased by the Initial Purchasers and payment
therefor shall be made at the offices of Gardner, Carton & Douglas, 321
N. Clark St., Chicago, Illinois 60610 (or such other place as may be
agreed to by the Company and the Initial Purchasers) at 10:00 a.m.
Chicago time, on April 22, 1999, or such other time and date as the
Initial Purchasers and the Company shall agree (the time and date of such
closing are called the "Closing Date").
(c) DELIVERY OF THE DOLLAR NOTES. The Company shall deliver,
or cause to be delivered, to NationsBanc Montgomery Securities LLC for
the accounts of the several Dollar Notes Initial Purchasers certificates
for the Dollar Notes at the Closing Date against the irrevocable release
of a wire transfer of immediately available funds for the amount of the
purchase price therefor. The certificates for the Dollar Notes shall be
in such denominations and registered in the name of Cede & Co., as
nominee of the Depository, pursuant to the DTC Agreement, and shall be
made available for inspection on the business day preceding the Closing
Date at a location in Chicago, as the Dollar Notes Initial Purchasers may
designate. Time shall be of the essence, and delivery at the time and
place specified in this Agreement is a further condition to the
obligations of the Dollar Notes Initial Purchasers.
(d) DELIVERY OF EURO NOTES. The Company shall deliver, or
cause to be delivered, to Bank of America International Limited (or as
Bank of America International Limited shall direct) for the accounts of
the several Euro Notes Initial Purchasers one certificate for the Euro
Notes in definitive form (the "Global Euro Note") registered in the name
of Industrial Bank of Japan (Luxembourg) S.A., as depositary for
Euroclear against the irrevocable release of a wire transfer of
immediately available funds for the amount of the purchase price
therefor. The Global Euro Note shall be made available to the Euro Notes
Initial Purchasers for inspection on the business day preceding the
Closing Date at a location in Chicago, as the Euro Notes Initial
Purchasers, may designate. Time shall be of the essence, and delivery at
the time and place specified in this Agreement is a further condition to
the obligations of the Euro Notes Initial Purchasers.
(e) DELIVERY OF OFFERING MEMORANDUM TO THE INITIAL PURCHASERS.
Not later than 12:00 p.m. on the second business day following the date
of this Agreement, the Company shall deliver or cause to be delivered
copies of the Offering Memorandum in such quantities and at such places
as the Initial Purchasers shall reasonably request.
(f) INITIAL PURCHASERS AS QUALIFIED INSTITUTIONAL BUYERS. Each
Initial Purchaser severally and not jointly represents and warrants to,
and agrees with, the Company that it is a "qualified institutional buyer"
within the meaning of Rule 144A (a "Qualified Institutional Buyer").
Section 3. Additional Covenants. The Company and the Guarantors
further covenant and agree with each Initial Purchaser as follows:
(a) INITIAL PURCHASERS' REVIEW OF PROPOSED AMENDMENTS AND
SUPPLEMENTS. Prior to amending or supplementing the Offering Memorandum
(including any amendment or supplement through incorporation by reference
of any report filed under the Exchange Act), the Company shall furnish to
the Initial Purchasers for review a copy of each such proposed amendment
or supplement, and the Company shall not use any such proposed amendment
or supplement to which the Initial Purchasers reasonably object.
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(b) AMENDMENTS AND SUPPLEMENTS TO THE OFFERING MEMORANDUM AND
OTHER SECURITIES ACT MATTERS. If, prior to the completion of the
placement of the Notes by the Initial Purchasers with the Subsequent
Purchasers, any event shall occur or condition exist as a result of which
it is necessary to amend or supplement the Offering Memorandum in order
to make the statements therein, in the light of the circumstances when
the Offering Memorandum is delivered to a purchaser, not misleading, or
if in the written opinion of the Initial Purchasers or counsel for the
Initial Purchasers it is otherwise necessary to amend or supplement the
Offering Memorandum to comply with applicable law, the Company agrees to
promptly prepare (subject to Section 3(a) hereof), and furnish at its own
expense to the Initial Purchasers, amendments or supplements to the
Offering Memorandum so that the statements in the Offering Memorandum as
so amended or supplemented will not, in the light of the circumstances
when the Offering Memorandum is delivered to a purchaser, be misleading
or so that the Offering Memorandum, as amended or supplemented, will
comply with applicable law.
Following the consummation of the Exchange Offers or the
effectiveness of the shelf registration statement and for so long as the
Securities are outstanding if, in the reasonable judgment of the Initial
Purchasers, the Initial Purchasers or any of their affiliates (as such
term is defined in the rules and regulations under the Securities Act)
are required to deliver a prospectus in connection with sales of, or
market-making activities with respect to, such securities, (A) to
periodically amend the applicable registration statement so that the
information contained therein complies with the requirements of
Section 10(a) of the Securities Act, (B) to amend the applicable
registration statement or supplement the related prospectus or the
documents incorporated therein when necessary to reflect any material
changes in the information provided therein so that the registration
statement and the prospectus will not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances existing
as of the date the prospectus is so delivered, not misleading and (C) to
provide the Initial Purchasers with copies of each amendment or
supplement filed and such other documents as the Initial Purchasers may
reasonably request.
The Company hereby expressly acknowledges that the indemnification
and contribution provisions of Sections 8 and 9 hereof are specifically
applicable and relate to each offering memorandum, registration
statement, prospectus, amendment or supplement referred to in this
Section 3(b).
(c) COPIES OF THE OFFERING MEMORANDUM. The Company agrees to
furnish the Initial Purchasers, without charge, as many copies of the
Offering Memorandum and any amendments and supplements thereto as they
shall have reasonably requested.
(d) BLUE SKY COMPLIANCE. The Company shall cooperate with the
Initial Purchasers and counsel for the Initial Purchasers to qualify or
register the Notes for sale under (or obtain exemptions from the
application of) the Blue Sky or state securities laws of those
jurisdictions designated by the Initial Purchasers, shall comply with
such laws and shall continue such qualifications, registrations and
exemptions in effect so long as required for the distribution of the
Notes. The Company shall not be required to qualify as a foreign
corporation or to take any action that would subject it to general
service of process in any such jurisdiction where it is not presently
qualified or where it would be subject to taxation as a foreign
corporation. The Company will advise the Initial Purchasers promptly of
the suspension of the qualification or registration of (or any such
exemption relating to) the Notes for offering, sale or trading in any
jurisdiction or any initiation or threat of any proceeding for any such
purpose, and in the event of the issuance of any order suspending such
qualification, registration or exemption, the Company shall use its best
efforts to obtain the withdrawal thereof at the earliest possible moment.
(e) USE OF PROCEEDS. The Company shall apply the net proceeds
from the sale of the Notes sold by it in the manner described under the
caption "Use of Proceeds" in the Offering Memorandum.
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(f) THE DEPOSITARY. The Company will cooperate with the
Initial Purchasers and use its best efforts to permit the Securities to
be eligible for clearance and settlement through the facilities of the
Depositary and Euroclear.
(g) ADDITIONAL ISSUER INFORMATION. Prior to the completion of
the placement of the Securities by the Initial Purchasers with the
Subsequent Purchasers, the Company shall file, on a timely basis, with
the Commission and the Nasdaq National Market all reports and documents
required to be filed under Section 13 or 15(d) of the Exchange Act.
Additionally, at any time when the Company is not subject to Section 13
or 15(d) of the Exchange Act, for the benefit of holders and beneficial
owners from time to time of Notes, the Company shall furnish, at its
expense, upon request, to holders and beneficial owners of Notes and
prospective purchasers of Securities information ("Additional Issuer
Information") satisfying the requirements of subsection (d)(4) of Rule
144A.
(h) FUTURE REPORTS TO THE INITIAL PURCHASERS. For so long as
any Notes or Exchange Notes remain outstanding, the Company will furnish
to NationsBanc Montgomery Securities LLC (i) as soon as reasonably
practicable after the end of each fiscal year, copies of the Annual
Report of DASI containing the balance sheet of DASI as of the close of
such fiscal year and statements of income, stockholders' equity and cash
flows for the year then ended and the opinion thereon of DASI's
independent public or certified public accountants; (ii) as soon as
practicable after the filing thereof, copies of each proxy statement,
Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report
on Form 8-K or other report filed by DASI with the Commission, the
National Association of Securities Dealers, Inc. or any securities
exchange; and (iii) as soon as available, copies of any report or
communication of DASI mailed generally to holders of its capital stock or
debt securities (including the holders of the Notes).
(i) NO INTEGRATION. The Company agrees that it will not and
will use its best efforts to cause its Affiliates not to make any offer
or sale of securities of the Company of any class if, as a result of the
doctrine of "integration" referred to in Rule 502 under the Securities
Act, such offer or sale would render invalid (for the purpose of (i) the
sale of the Notes by the Company to the Initial Purchasers, (ii) the
resale of the Notes by the Initial Purchasers to Subsequent Purchasers or
(iii) the resale of the Notes by such Subsequent Purchasers to others)
the exemption from the registration requirements of the Securities Act
provided by Section 4(2) thereof or by Rule 144A or by Regulation S
thereunder or otherwise.
(j) LEGENDED SECURITIES. Each certificate for a Note will bear
the legend contained in "Notice to Investors" in the Offering Memorandum
for the time period and upon the other terms stated in the Offering
Memorandum.
(k) PORTAL. The Company will use its reasonable best efforts
to cause the Notes to be eligible for the National Association of
Securities Dealers, Inc. PORTAL market (the "PORTAL market").
(l) LUXEMBOURG LISTING. The Company will use its reasonable
best efforts to cause the Notes to be listed on the Luxembourg Stock
Exchange.
NationsBanc Montgomery Securities LLC, on behalf of the several
Initial Purchasers, may, in its sole discretion, waive in writing the
performance by the Company of any one or more of the foregoing covenants or
extend the time for their performance.
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Section 4. Payment of Expenses. The Company agrees to pay all costs,
fees and expenses incurred in connection with the performance of its obligations
hereunder and in connection with the transactions contemplated hereby, including
without limitation (i) all expenses incident to the issuance and delivery of the
Notes (including all printing and engraving costs), (ii) all necessary issue,
transfer and other stamp taxes in connection with the issuance and sale of the
Notes to the Initial Purchasers, (iii) all fees and expenses of the Company's
and the Guarantors' counsel, independent public or certified public accountants
and other advisors, (iv) all costs and expenses incurred in connection with the
preparation, printing, filing, shipping and distribution of each Preliminary
Offering Memorandum and the Offering Memorandum (including financial statements
and exhibits), and all amendments and supplements thereto, (v) all filing fees,
reasonable attorneys' fees and expenses incurred by the Company or the Initial
Purchasers in connection with qualifying or registering (or obtaining exemptions
from the qualification or registration of, all or any part of the Securities for
offer and sale under the Blue Sky laws and, if requested by the Initial
Purchasers, preparing and printing a "Blue Sky Survey" or memorandum, and any
supplements thereto, advising the Initial Purchasers of such qualifications,
registrations and exemptions, (vi) the fees and expenses of the Dollar Notes
Trustee and the Euro Notes Trustee, including the reasonable fees and
disbursements of counsel for the Dollar Notes Trustee and Euro Notes Trustee in
connection with the Indentures, the Notes and the Exchange Notes, (vii) any fees
payable in connection with the rating of the Notes or the Exchange Notes with
the ratings agencies and the listing of the Notes with the PORTAL market and the
Luxembourg Stock Exchange, (viii) all fees and expenses (including reasonable
fees and expenses of counsel) of the Company and the Guarantors in connection
with approval of the Notes by DTC or Euroclear or Cedelbank for "book-entry"
transfer, (ix) all roadshow expenses of the Company's representatives and
(x) the performance by the Company and the Guarantors of their respective other
obligations under this Agreement. Except as provided in this Section 4,
Section 6, Section 8 and Section 9 hereof, the Initial Purchasers shall pay
their own expenses, including the fees and disbursements of their counsel.
Section 5. Conditions of the Obligations of the Initial Purchasers.
The obligations of the several Initial Purchasers to purchase and pay for the
Dollar Notes and the Euro Notes, as provided herein on the Closing Date shall be
subject to the accuracy of the representations and warranties on the part of the
Company and the Guarantors set forth in Section 1 hereof as of the date hereof
and as of the Closing Date as though then made and to the timely performance by
the Company and the Guarantors of their respective covenants and other
obligations hereunder, and to each of the following additional conditions:
(a) ACCOUNTANTS' COMFORT LETTER. On the date hereof, the
Initial Purchasers shall have received from Arthur Andersen LLP,
independent public or certified public accountants for DASI,
PricewaterhouseCoopers LLP, independent public or certified public
accountants for Excel Industries, Inc. and KPMG Audit Plc, independent
public or certified public accountants for Adwest Automotive Plc, letters
dated the date hereof addressed to the Initial Purchasers, in form and
substance reasonably satisfactory to the Initial Purchasers, containing
statements and information of the type ordinarily included in
accountant's "comfort letters" to Initial Purchasers, delivered according
to Statement of Auditing Standards Nos. 72 and 76 (or any successor
bulletins), with respect to the audited and unaudited financial
statements and certain financial information contained in the Offering
Memorandum.
(b) NO MATERIAL ADVERSE CHANGE OR RATINGS AGENCY CHANGE. For
the period from and after the date of this Agreement and prior to the
Closing Date:
(i) in the judgment of the Initial Purchasers there
shall not have occurred any Material Adverse Change; and
(ii) there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating
accorded any securities of the Company or any of its subsidiaries
by any "nationally recognized statistical rating organization" as
such term is defined for purposes of Rule 436(g)(2)
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under the Securities Act.
(c) OPINION OF COUNSEL FOR THE COMPANY. On the Closing Date
the Initial Purchasers shall have received the opinion of Kirkland &
Ellis, counsel for the Company, dated as of such Closing Date, in form
and substance satisfactory to the Initial Purchasers and their counsel.
(d) OPINION OF COUNSEL FOR THE INITIAL PURCHASERS. On the
Closing Date the Initial Purchasers shall have received the opinion of
Gardner, Carton & Douglas, counsel for the Initial Purchasers, dated as
of such Closing Date, with respect to such matters as may be reasonably
requested by the Initial Purchasers and are customary in this type of
business.
(e) OFFICERS' CERTIFICATE. On the Closing Date the Initial
Purchasers shall have received a written certificate executed by the
Chairman of the Board, Chief Executive Officer or President of the
Company and the Chief Financial Officer or Chief Accounting Officer of
the Company, dated as of the Closing Date, to the effect set forth in
subsection (b)(ii) of this Section 5, and further to the effect that:
(i) for the period from and after the date of this
Agreement and prior to the Closing Date there has not occurred any
Material Adverse Change;
(ii) the representations, warranties and covenants of the
Company and the Guarantors set forth in Section 1 of this
Agreement are true and correct with the same force and effect as
though expressly made on and as of the Closing Date; and
(iii) the Company and the Guarantors have complied in all
material respects with all the agreements and satisfied all the
conditions on their respective parts to be performed or satisfied
at or prior to the Closing Date.
(f) BRING-DOWN COMFORT LETTER. On the Closing Date the Initial
Purchasers shall have received from Arthur Andersen LLP, independent
public or certified public accountants for the Company,
PricewaterhouseCoopers LLP, independent public or certified public
accountants for Excel Industries, Inc. and KPMG Audit Plc, independent
public or certified public accountants for Adwest Automotive Plc, letters
dated such date, in form and substance reasonably satisfactory to the
Initial Purchasers, to the effect that they reaffirm the statements made
in the letters furnished by them pursuant to subsection (a) of this
Section 5, except that the specified date referred to therein for the
carrying out of procedures shall be no more than three business days
prior to the Closing Date.
(g) PORTAL AND LUXEMBOURG STOCK EXCHANGE LISTINGS. At the
Closing Date the Notes shall have been designated for trading on the
PORTAL market and an application shall have been made for listing the
Notes on the Luxembourg Stock Exchange.
(h) REGISTRATION RIGHTS AGREEMENTS. The Company and the
Guarantors shall have entered into the Registration Rights Agreements and
the Initial Purchasers shall have received executed counterparts thereof.
(i) ADDITIONAL DOCUMENTS. On or before the Closing Date, the
Initial Purchasers and counsel for the Initial Purchasers shall have
received such information, documents and opinions as they may reasonably
require for the purposes of enabling them to pass upon the issuance and
sale of the Securities as contemplated herein, or in order to evidence
the accuracy of any of the representations and warranties, or the
satisfaction of any of the conditions or agreements, herein contained.
If any condition specified in this Section 5 is not satisfied when
and as required to be
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satisfied, this Agreement may be terminated by the Initial Purchasers by notice
to the Company at any time on or prior to the Closing Date, which termination
shall be without liability on the part of any party to any other party, except
that Section 4, Section 6, Section 8 and Section 9 shall at all times be
effective and shall survive such termination.
Section 6. Reimbursement of Initial Purchasers' Expenses. If this
Agreement is terminated by the Initial Purchasers pursuant to Section 5, or if
the sale to the Initial Purchasers of the Securities on the Closing Date is not
consummated because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or to comply with any provision hereof,
the Company agrees to reimburse the Initial Purchasers (or such Initial
Purchasers as have terminated this Agreement with respect to themselves),
severally, upon demand for all out-of-pocket expenses that shall have been
reasonably incurred by the Initial Purchasers in connection with the proposed
purchase and the offering and sale of the Securities, including but not limited
to reasonable fees and disbursements of counsel, printing expenses, travel
expenses, postage, facsimile and telephone charges.
Section 7. Offer, Sale and Resale Procedures. Each of the Initial
Purchasers, on the one hand, and the Company and each of the Guarantors, on the
other hand, hereby establish and agree to observe the following procedures in
connection with the offer and sale of the Securities:
(i) OFFERS AND SALES ONLY TO QUALIFIED INSTITUTIONAL
BUYERS. Offers and sales of the Securities will be made only by
the Initial Purchasers or Affiliates thereof qualified to do so in
the jurisdictions in which such offers or sales are made. Each
such offer or sale shall only be made to persons whom the offeror
or seller reasonably believes to be (A) qualified institutional
buyers (as defined in Rule 144A under the Securities Act) or
(B) non-U.S. persons outside the United States to whom the offeror
or seller reasonably believes offers and sales of the Securities
may be made in reliance upon Regulation S under the Securities
Act, upon the terms and conditions set forth in ANNEX I hereto,
which ANNEX I is hereby expressly made a part hereof.
(ii) NO GENERAL SOLICITATION. The Securities will be
offered by approaching prospective Subsequent Purchasers on an
individual basis. No general solicitation or general advertising
(within the meaning of Rule 502(c) under the Securities Act) will
be used in the United States in connection with the offering of
the Securities.
(iii) RESTRICTIONS ON TRANSFER. Upon original issuance by
the Company, and until such time as the same is no longer required
under the applicable requirements of the Securities Act, the
Securities (and all securities issued in exchange therefor or in
substitution thereof, other than the Exchange Securities) shall
bear the following legend:
"THE NOTE (OR ITS PREDECESSORS) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933
(THE "SECURITIES ACT"), AND THE NOTE EVIDENCED HEREBY MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE NOTE EVIDENCED HEREBY IS HEREBY NOTIFIED THAT
THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS
OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER OR ANOTHER EXEMPTION UNDER THE SECURITIES ACT. THE
HOLDER OF THE NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF
THE COMPANY THAT (A) SUCH NOTE MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (I)(A) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT), IN A
TRANSACTION MEETING THE
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REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (B) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (C) OUTSIDE THE UNITED STATES TO A FOREIGN
PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904
OF REGULATION S UNDER THE SECURITIES ACT, OR (D) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT PROVIDED THAT IN THE CASE OF A TRANSFER
PURSUANT TO CLAUSE (D) SUCH TRANSFER IS EFFECTED BY THE
DELIVERY TO THE TRANSFEREE OF DEFINITIVE SECURITIES REGISTERED
IN ITS NAME (OR ITS NOMINEES NAME) IN THE BOOKS MAINTAINED BY
THE REGISTRAR, AND IS SUBJECT TO THE RECEIPT BY THE REGISTRAR
(AND THE COMPANY, IF THEY SO REQUEST) OF A CERTIFICATION OF
THE TRANSFEROR AND AN OPINION OF COUNSEL TO THE EFFECT THAT
SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT,
(II) TO THE COMPANY OR (III) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH
CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
NOTE EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN
(A) ABOVE."
Following the sale of the Securities by the Initial Purchasers to
Subsequent Purchasers pursuant to the terms hereof, the Initial
Purchasers shall not be liable or responsible to the Company for
any losses, damages or liabilities suffered or incurred by the
Company, including any losses, damages or liabilities under the
Securities Act, arising from or relating to any resale or transfer
of any Security.
Section 8. Indemnification.
(a) INDEMNIFICATION OF THE INITIAL PURCHASERS. The Company and
the Guarantors (for purposes of Sections 8, 9 and 10, the term Company
shall include the Guarantors), jointly and severally, agree to indemnify
and hold harmless each Initial Purchaser, its directors, officers and
employees, and each person, if any, who controls any Initial Purchaser
within the meaning of the Securities Act and the Exchange Act against any
loss, claim, damage, liability or expense, as incurred, to which such
Initial Purchaser or such controlling person may become subject, under
the Securities Act, the Exchange Act or other federal or state statutory
law or regulation, or at common law or otherwise (including in settlement
of any litigation, if such settlement is effected with the written
consent of the Company), insofar as such loss, claim, damage, liability
or expense (or actions in respect thereof as contemplated below) arises
out of or is based upon any untrue statement or alleged untrue statement
of a material fact contained in the Preliminary Offering Memorandum or
the Offering Memorandum (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and to reimburse each Initial
Purchaser and each such controlling person for any and all expenses
(including the reasonable fees and disbursements of counsel chosen by
NationsBanc Montgomery Securities LLC) as such expenses are reasonably
incurred by such Initial Purchaser or such controlling person in
connection with investigating, defending, settling, compromising or
paying any such loss, claim, damage, liability, expense or action;
PROVIDED, HOWEVER, that the foregoing indemnity agreement shall not apply
to any loss, claim, damage, liability or expense to the extent, but only
to the extent, arising out of or based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in reliance
upon and in conformity with written information furnished to the Company
by the Initial Purchasers expressly for use in any
17
<PAGE>
Preliminary Offering Memorandum or the Offering Memorandum (or any
amendment or supplement thereto); PROVIDED FURTHER, HOWEVER, that the
indemnification contained in this paragraph (a) with respect to the
Preliminary Offering Memorandum shall not inure to the benefit of the
Initial Purchasers (or to the benefit of any person controlling the
Initial Purchasers) on account of any such loss, claim, damage, liability
or expense arising from the sale of the Securities by the Initial
Purchasers to any person if a copy of the Offering Memorandum (as then
amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) shall not have been delivered or sent
to such person and each untrue statement of a material fact contained in,
and each omission or alleged omission of a material fact from, such
Preliminary Offering Memorandum was corrected in the Offering Memorandum
(as so amended or supplemented) and it shall have been determined that
any Initial Purchaser and each person, if any, who controls such Initial
Purchasers would not have incurred such losses, claims, damages,
liabilities and expenses had the Offering Memorandum been delivered or
sent. The indemnity agreement set forth in this Section 8(a) shall be in
addition to any liabilities that the Company may otherwise have.
(b) INDEMNIFICATION OF THE COMPANY, ITS DIRECTORS AND OFFICERS.
Each Initial Purchaser agrees, severally and not jointly, to indemnify
and hold harmless the Company and each of its directors and each person,
if any, who controls the Company within the meaning of the Securities Act
or the Exchange Act, against any loss, claim, damage, liability or
expense, as incurred, to which the Company or any such director, or
controlling person may become subject, under the Securities Act, the
Exchange Act, or other federal or state statutory law or regulation, or
at common law or otherwise (including in settlement of any litigation, if
such settlement is effected with the written consent of such Initial
Purchaser), insofar as such loss, claim, damage, liability or expense (or
actions in respect thereof as contemplated below) arises out of or is
based upon any untrue or alleged untrue statement of a material fact
contained in any Preliminary Offering Memorandum or the Offering
Memorandum (or any amendment or supplement thereto), or arises out of or
is 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, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in any Preliminary Offering
Memorandum or the Offering Memorandum (or any amendment or supplement
thereto), in reliance upon and in conformity with written information
furnished to the Company by the Initial Purchasers expressly for use
therein; and to reimburse the Company, or any such director or
controlling person for any legal and other expenses reasonably incurred
by the Company, or any such director or controlling person in connection
with investigating, defending, settling, compromising or paying any such
loss, claim, damage, liability, expense or action. The Company hereby
acknowledges that the only information that the Initial Purchasers have
furnished to the Company expressly for use in any Preliminary Offering
Memorandm or the Offering Memorandum (or any amendment or supplement
thereto) are the statements set forth in the first sentence of the third
paragraph, the first sentence of the fourth paragraph, the fourth
sentence of the sixth paragraph and the eighth paragraph under the
caption "Plan of Distribution" in the Offering Memorandum; and the
Initial Purchasers confirm that such statements are correct. The
indemnity agreement set forth in this Section 8(b) shall be in addition
to any liabilities that each Initial Purchaser may otherwise have.
(c) NOTIFICATIONS AND OTHER INDEMNIFICATION PROCEDURES.
Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will, if
a claim in respect thereof is to be made against an indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof, but the omission so to notify the indemnifying
party will not relieve it from any liability which it may have to any
indemnified party for contribution or otherwise than under the indemnity
agreement contained in this Section 8 or to the extent it is not
prejudiced as a proximate result of such failure. In case any such
action is brought against any indemnified party and such indemnified
party seeks or intends to seek indemnity from an indemnifying party, the
indemnifying party will be entitled to participate in and, to the extent
that it shall elect, jointly with all other indemnifying parties
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<PAGE>
similarly notified, by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified
party, to assume the defense thereof with counsel reasonably satisfactory
to such indemnified party; PROVIDED, HOWEVER, if the defendants in any
such action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded that a conflict
may arise between the positions of the indemnifying party and the
indemnified party in conducting the defense of any such action or that
there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right
to select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified
party or parties. Upon receipt of notice from the indemnifying party to
such indemnified party of such indemnifying party's election so to assume
the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified
party under this Section 8 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof
unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the next preceding sentence (it being
understood, however, that the indemnifying party shall not be liable for
the expenses of more than one separate counsel (together with local
counsel), approved by the indemnifying party (NationsBanc Montgomery
Securities LLC in the case of Section 8(b) and Section 9), representing
the indemnified parties who are parties to such action) or (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action, in each of which cases
the fees and expenses of counsel shall be at the expense of the
indemnifying party.
(d) SETTLEMENTS. The indemnifying party under this Section 8
shall not be liable for any settlement of any proceeding effected without
its written consent, but if settled with such consent or if there be a
final nonappealable judgment for the plaintiff, the indemnifying party
agrees to indemnify the indemnified party against any loss, claim,
damage, liability or expense by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by
Section 8(c) hereof, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 30 days after
receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement or
delivered notice to the indemnified party of its good faith objection to
such claim of indemnification.. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement,
compromise or consent to the entry of judgment in any pending or
threatened action, suit or proceeding in respect of which any indemnified
party is or could have been a party and indemnity was or could have been
sought hereunder by such indemnified party, unless such settlement,
compromise or consent includes an unconditional release of such
indemnified party from all liability on claims that are the subject
matter of such action, suit or proceeding.
Section 9. Contribution.
If the indemnification provided for in Section 8 is for any reason
held to be unavailable to or otherwise insufficient to hold harmless an
indemnified party in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount paid or payable by such indemnified party, as incurred, as
a result of any losses, claims, damages, liabilities or expenses referred to
therein (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company, on the one hand, and the Initial Purchasers,
on the other hand, from the offering of the Securities pursuant to this
Agreement or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company, on the one hand, and the Initial Purchasers, on the other
hand, in connection with the statements or omissions or inaccuracies in the
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<PAGE>
representations and warranties herein which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company, on the one hand,
and the Initial Purchasers, on the other hand, in connection with the offering
of the Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company, and the total discount received by the Initial Purchasers bear to
the aggregate initial offering price of the Securities. The relative fault of
the Company, on the one hand, and the Initial Purchasers, on the other hand,
shall be determined by reference to, among other things, whether any such untrue
or alleged untrue statement of a material fact or omission or alleged omission
to state a material fact or any such inaccurate or alleged inaccurate
representation or warranty relates to information supplied by the Company, on
the one hand, or the Initial Purchasers, on the other hand, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 8(c), any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
Section 8(c) with respect to notice of commencement of any action shall apply if
a claim for contribution is to be made under this Section 9; PROVIDED, HOWEVER,
that no additional notice shall be required with respect to any action for which
notice has been given under Section 8(c) for purposes of indemnification.
The Company and the Initial Purchasers agree that it would not be
just and equitable if contribution pursuant to this Section 9 were determined by
pro rata allocation (even if the Initial Purchasers were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in this Section 9.
Notwithstanding the provisions of this Section 9, no Initial
Purchaser shall be required to contribute any amount in excess of the discount
received by such Initial Purchaser in connection with the Securities distributed
by it. No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The Initial
Purchasers' obligations to contribute pursuant to this Section 9 are several,
and not joint, in proportion to their respective commitments as set forth
opposite their names in SCHEDULE A. For purposes of this Section 9, each
director, officer and employee of an Initial Purchaser and each person, if any,
who controls an Initial Purchaser within the meaning of the Securities Act and
the Exchange Act shall have the same rights to contribution as such Initial
Purchaser, and each director of the Company, and each person, if any, who
controls the Company with the meaning of the Securities Act and the Exchange Act
shall have the same rights to contribution as the Company.
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<PAGE>
Section 10. Termination of this Agreement. Prior to the Closing Date,
this Agreement may be terminated by the Initial Purchasers by notice given to
the Company if at any time (i) trading or quotation in any of the Company's
securities shall have been suspended or limited by the Commission or by the
Nasdaq Stock Market, or trading in securities generally on either the Nasdaq
Stock Market or the New York Stock Exchange shall have been suspended or
limited, or minimum or maximum prices shall have been generally established on
any of such stock exchanges by the Commission or the NASD; (ii) a general
banking moratorium shall have been declared by any federal or New York
authorities; or (iii) there shall have occurred any outbreak or escalation of
national or international hostilities or any crisis or calamity, or any change
in the United States or international financial markets, or any substantial
change or development involving a prospective substantial change in United
States' or international political, financial or economic conditions, as in the
judgment of the Initial Purchasers is material and adverse and makes it
impracticable to market the Securities in the manner and on the terms described
in the Offering Memorandum or to enforce contracts for the sale of securities;
(iv) in the judgment of the Initial Purchasers there shall have occurred any
Material Adverse Change; or (v) the Company shall have sustained a loss by
strike, fire, flood, earthquake, accident or other calamity of such character as
in the judgment of the Initial Purchasers may interfere materially with the
conduct of the business and operations of the Company regardless of whether or
not such loss shall have been insured. Any termination pursuant to this
Section 10 shall be without liability on the part of (a) the Company to any
Initial Purchaser, except that the Company shall be obligated to reimburse the
expenses of the Initial Purchasers pursuant to Sections 4 and 6 hereof, (b) any
Initial Purchaser to the Company, or (c) any party hereto to any other party
except that the provisions of Section 8 and Section 9 shall at all times be
effective and shall survive such termination.
Section 11. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers and of the several Initial Purchasers
set forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Initial
Purchaser or the Company or any of its or their partners, officers or directors
or any controlling person, as the case may be, and will survive delivery of and
payment for the Securities sold hereunder and any termination of this Agreement.
Section 12. Notices. All communications hereunder shall be in writing
and shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:
If to the Initial Purchasers:
NationsBanc Montgomery Securities LLC
231 South LaSalle Street, 18th Floor
Chicago, Illinois 60697
Facsimile: (312) 974-0140
Attention: Brad A. Bernstein
with a copy to:
Gardner, Carton & Douglas
321 North Clark Street
Chicago, Illinois 60610
Facsimile: (312) 644-3381
Attention: Dewey B. Crawford
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If to the Company or the Guarantors:
Dura Operating Corp.
4508 IDS Center
Minneapolis, Minnesota 55402
Facsimile: (612) 332-2012
Attention: Scott D. Rued
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
Section 13. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto, including any substitute Initial
Purchasers pursuant to Section 16 hereof, and to the benefit of the employees,
officers and directors and controlling persons referred to in Section 8 and
Section 9, and in each case their respective successors, and no other person
will have any right or obligation hereunder. The term "successors" shall not
include any purchaser of the Securities as such from any of the Initial
Purchasers merely by reason of such purchase.
Section 14. Partial Unenforceability. The invalidity or
unenforceability of any Section, paragraph or provision of this Agreement shall
not affect the validity or enforceability of any other Section, paragraph or
provision hereof. If any Section, paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.
Section 15. GOVERNING LAW PROVISIONS. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
Section 16. Default of One or More of the Several Initial Purchasers.
If any one or more of the several Dollar Notes Initial Purchasers shall fail or
refuse to purchase Dollar Notes that it or they have agreed to purchase
hereunder on the Closing Date, and the aggregate number of Dollar Notes which
such defaulting Dollar Notes Initial Purchaser or Dollar Notes Initial
Purchasers agreed but failed or refused to purchase does not exceed 10% of the
aggregate number of the Dollar Notes to be purchased on such date, the other
Initial Purchasers shall be obligated, severally, in the proportions that the
number of Dollar Notes set forth opposite their respective names on SCHEDULE A
bears to the aggregate number of Dollar Notes set forth opposite the names of
all such non-defaulting Dollar Notes Initial Purchasers, or in such other
proportions as may be specified by the Dollar Notes Initial Purchasers with the
consent of the non-defaulting Dollar Notes Initial Purchasers, to purchase the
Dollar Notes which such defaulting Dollar Notes Initial Purchaser or Dollar
Notes Initial Purchasers agreed but failed or refused to purchase on such date.
If any one or more of the Dollar Notes Initial Purchasers shall fail or refuse
to purchase Dollar Notes and the aggregate number of Dollar Notes with respect
to which such default occurs exceeds 10% of the aggregate number of Dollar Notes
to be purchased on the Closing Date, and arrangements satisfactory to the
Initial Purchasers and the Company for the purchase of such Dollar Notes are not
made within 48 hours after such default, this Agreement shall terminate without
liability of any party to any other party except that the provisions of
Section 4, Section 6, Section 8 and Section 9 shall at all times be effective
and shall survive such termination. In any such case either the Dollar Notes
Initial Purchasers or the Company shall have the right to postpone the Closing
Date, as the case may be, but in no event for longer than seven days in order
that the required changes, if any, to the Offering Memorandum or any other
documents or arrangements may be effected.
If any one or more of the several Euro Notes Initial Purchasers
shall fail or refuse to purchase Euro Notes that it or they have agreed to
purchase hereunder on the Closing Date, and the aggregate number of Euro Notes
which such defaulting Euro Notes Initial
22
<PAGE>
Purchaser or Euro Notes Initial Purchasers agreed but failed or refused to
purchase does not exceed 10% of the aggregate number of the Euro Notes to be
purchased on such date, the other Initial Purchasers shall be obligated,
severally, in the proportions that the number of Euro Notes set forth opposite
their respective names on SCHEDULE A bears to the aggregate number of Euro Notes
set forth opposite the names of all such non-defaulting Euro Notes Initial
Purchasers, or in such other proportions as may be specified by the Euro Notes
Initial Purchasers with the consent of the non-defaulting Euro Notes Initial
Purchasers, to purchase the Euro Notes which such defaulting Euro Notes Initial
Purchaser or Euro Notes Initial Purchasers agreed but failed or refused to
purchase on such date. If any one or more of the Euro Notes Initial Purchasers
shall fail or refuse to purchase Euro Notes and the aggregate number of Euro
Notes with respect to which such default occurs exceeds 10% of the aggregate
number of Euro Notes to be purchased on the Closing Date, and arrangements
satisfactory to the Initial Purchasers and the Company for the purchase of such
Euro Notes are not made within 48 hours after such default, this Agreement shall
terminate without liability of any party to any other party except that the
provisions of Section 4, Section 6, Section 8 and Section 9 shall at all times
be effective and shall survive such termination. In any such case either the
Euro Notes Initial Purchasers or the Company shall have the right to postpone
the Closing Date, as the case may be, but in no event for longer than seven days
in order that the required changes, if any, to the Offering Memorandum or any
other documents or arrangements may be effected.
As used in this Agreement, the term "Initial Purchaser" shall be
deemed to include any person substituted for a defaulting Initial Purchaser
under this Section 10. Any action taken under this Section 16 shall not relieve
any defaulting Initial Purchaser from liability in respect of any default of
such Initial Purchaser under this Agreement.
Section 17. General Provisions. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be executed in
two or more counterparts, each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to benefit.
The Table of Contents and the section headings herein are for the convenience of
the parties only and shall not affect the construction or interpretation of this
Agreement.
Section 18. Agreement Among Initial Purchasers. Each of the Euro Notes
Initial Purchasers agrees, by execution of this Agreement, that the IPMA
Agreement Among Managers Version I (New York Law Version) (the "IPMA Agreement")
shall be applicable to the relationship among such Euro Notes Initial Purchasers
in connection with this Agreement and, except as expressly specified in this
Agreement, the IPMA Recommendations shall not apply. In the event that the
terms of the IPMA Agreement are inconsistent with the terms of this Agreement,
the provisions of this Agreement shall apply. Bank of America International
Limited is the "Lead Manager" for purposes of the IPMA Agreement.
Each of the Dollar Notes Initial Purchasers agrees, by execution of this
Agreement, that the Master Agreement Among Underwriters, dated as of June 1994,
with NationsBanc Montgomery Securities LLC shall be applicable to the
relationship among such Dollar Notes Initial Purchasers in connection with this
Agreement.
23
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.
Very truly yours,
DURA OPERATING CORP.
By: *
------------------------------------
DURA AUTOMOTIVE SYSTEMS, INC.
By: *
------------------------------------
DURA AUTOMOTIVE SYSTEMS, INC. COLUMN
SHIFTER OPERATIONS
By: *
------------------------------------
DURA AUTOMOTIVE SYSTEMS CABLE OPERATIONS,
INC.
By: *
------------------------------------
UNIVERSAL TOOL & STAMPING COMPANY INC.
By: *
------------------------------------
ADWEST ELECTRONICS, INC.
By: *
------------------------------------
24
<PAGE>
ADWEST WESTERN AUTOMOTIVE, INC.
By: *
------------------------------------
X.E. CO.
By: *
------------------------------------
EXCEL OF TENNESSEE L.P.
By: Excel Industries of Michigan, Inc.
Its: General Partner
By: *
------------------------------------
EXCEL CORPORATION
By: *
------------------------------------
EXCEL INDUSTRIES OF MICHIGAN, INC.
By: *
------------------------------------
ANDERSON INDUSTRIES, INC.
By: *
------------------------------------
ATWOOD INDUSTRIES, INC.
By: *
------------------------------------
HYDRO FLAME CORPORATION
By: *
------------------------------------
25
<PAGE>
ATWOOD AUTOMOTIVE INC.
By: *
------------------------------------
MARK I MOLDED PLASTICS, INC.
By: *
------------------------------------
MARK I MOLDED PLASTICS OF TENNESSEE, INC.
By: *
------------------------------------
* /s/ David Bovee
- --------------------------------------
DAVID R. BOVEE, solely in his
capacity as attorney-in-fact pursuant
to power of attorney
26
<PAGE>
The foregoing Purchase Agreement is hereby confirmed and accepted
by the Initial Purchasers as of the date first above written.
NATIONSBANC MONTGOMERY SECURITIES LLC
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
By: NationsBanc Montgomery Securities LLC
By: /s/ D.J. Kelly
-----------------------------------
D.J. Kelly
Principal
BANK OF AMERICA INTERNATIONAL LIMITED
By: /s/ Stephen A. Flevy
-----------------------------------
DONALDSON, LUFKIN & JENRETTE INTERNATIONAL
By: /s/ M.J. Barnes
-----------------------------------
M.J. Barnes
27
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
Aggregate Principal
Amount of Dollar
Notes to be
Dollar Notes Initial Purchasers Purchased
- -------------------------------
<S> <C>
NationsBanc Montgomery Securities LLC . . . . . . . . . $180,000,000
DONALDSON, LUFKIN & JENRETTE Securities Corporation . . 120,000,000
Total Dollar Notes. . . . . . . . . . . . . . . . $300,000,000
</TABLE>
<TABLE>
<CAPTION>
Aggregate Principal
of Euro Notes to be
Euro Notes Initial Purchasers Purchased
- -----------------------------
<S> <C>
Bank of America International Limited . . . . . . . . . E 60,0000
DONALDSON, LUFKIN & JENRETTE International . . . . . . . E 40,000,000
Total Euro Notes. . . . . . . . . . . . . . . . . E100,000,000
</TABLE>
A-1
<PAGE>
ANNEX I
Each Initial Purchaser understands that:
(a) Such Initial Purchaser agrees that it has not offered or
sold and will not offer or sell the Securities in the United States or
to, or for the benefit or account of, a U.S. Person (other than a
distributor), in each case, as defined in Rule 902 under the Securities
Act (i) as part of its distribution at any time and (ii) otherwise until
40 days after the later of the commencement of the offering of the
Securities pursuant hereto and the Closing Date, other than in
accordance with Regulation S of the Securities Act or another exemption
from the registration requirements of the Securities Act. Such Initial
Purchaser agrees that, during such 40-day restricted period, it will not
cause any advertisement with respect to the Securities (including any
"tombstone" advertisement) to be published in any newspaper or
periodical or posted in any public place and will not issue any circular
relating to the Securities, except such advertisements as are permitted
by and include the statements required by Regulation S.
(b) Such Initial Purchaser agrees that, at or prior to
confirmation of a sale of Securities by it to any distributor, dealer or
person receiving a selling concession, fee or other remuneration during
the 40-day restricted period referred to in Rule 903(c)(2) under the
Securities Act, it will send to such distributor, dealer or person
receiving a selling concession, fee or other remuneration a confirmation
or notice to substantially the following effect:
"The Securities covered hereby have not been registered under the
U.S. Securities Act of 1933, as amended (the "Securities Act"),
and may not be offered and sold within the United States or to,
or for the account or benefit of, U.S. persons (i) as part of
your distribution at any time or (ii) otherwise until 40 days
after the later of the date the Notes were first offered to
persons other than "distributors" (as defined in Regulation S) in
reliance upon Regulation S and the Closing Date, except in either
case in accordance with Regulation S under the Securities Act (or
Rule 144A) and in connection with any subsequent sale by you of
the Notes covered hereby in reliance on Regulation S during the
period referred to above to any distributor, dealer or person
receiving a selling concession, fee or other remuneration, you
must deliver a notice to substantially the foregoing effect.
Terms used above have the meanings assigned to them in
Regulation S."
<PAGE>
EXHIBIT 3.3
[STAMP]
FILED
NOV 13 1990
10 AM
/s/ [ILLEGIBLE]
SECRETARY OF STATE
CERTIFICATE OF INCORPORATION
OF
DURA MECHANICAL COMPONENTS, INC.
ARTICLE ONE
The name of the corporation is Dura Mechanical Components, Inc.
ARTICLE TWO
The address of the corporation's registered office in the State of Delaware
is the Corporation Trust Center, 1209 Orange Street, in the City of Wilmington,
County of New Castle. The name of its registered agent at such address is The
Corporation Trust Company.
ARTICLE THREE
The nature of the business or purposes to be conducted or promoted is to
engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware.
ARTICLE FOUR
The total number of shares of stock which the corporation has authority to
issue is one thousand (1,000) shares of Common Stock, with a par value of $0.01
per share.
ARTICLE FIVE
The name and mailing address of the sole incorporator are as follows:
<PAGE>
<TABLE>
<CAPTION>
NAME MAILING ADDRESS
---- ---------------
<S> <C>
JuliAnn H. Robinson 200 East Randolph Drive
Suite 5600
Chicago, Illinois 60601
</TABLE>
ARTICLE SIX
The corporation is to have perpetual existence.
ARTICLE SEVEN
In furtherance and not in limitation of the powers conferred by statute,
the board of directors of the corporation is expressly authorized to make, alter
or repeal the by-laws of the corporation.
ARTICLE EIGHT
Meetings of stockholders may be held within or without the State of
Delaware, as the by-laws of the corporation may provide. The books of the
corporation may be kept outside the State of Delaware at such place or places as
may be designated from time to time by the board of directors or in the by-laws
of the corporation. Election of directors need not be by written ballot unless
the by-laws of the corporation so provide.
ARTICLE NINE
To the fullest extent permitted by the General Corporation Law of the State
of Delaware as the same exists or may hereafter be amended, a director of this
corporation shall not be liable to the corporation or its stockholders for
monetary damages for a breach of fiduciary duty as a director. Any repeal or
modification of this ARTICLE NINE shall not adversely affect any right or
protection of a director of the corporation existing at the time of such repeal
or modification.
ARTICLE TEN
The corporation expressly elects not to be governed by Section 203 of the
General Corporation Law of the State of Delaware.
-2-
<PAGE>
ARTICLE ELEVEN
The corporation reserves the right to amend, alter, change or repeal any
provision contained in this certificate of incorporation in the manner now or
hereafter prescribed herein and by the laws of the State of Delaware, and all
rights conferred upon stockholders herein are granted subject to this
reservation.
I, THE UNDERSIGNED, being the sole incorporator hereinbefore named, for
the purpose of forming a corporation pursuant to the General Corporation Law
of the State of Delaware, do make this certificate, hereby declaring and
certifying that this is my act and deed and the facts stated herein are true,
and accordingly have hereunto set my hand on the 12th day of November, 1990.
/s/ JuliAnn H. Robinson
------------------------------
JuliAnn H. Robinson, Sole Incorporator
-3-
<PAGE>
[STAMP]
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 02:30 PM 08/29/1994
944162314 - 2246484
CERTIFICATE OF AMENDMENT
TO CERTIFICATE OF INCORPORATION
OF
DURA MECHANICAL COMPONENTS, INC.
* * * *
Adopted in accordance with the provisions
of Section 242 of the General Corporation Law
of the State of Delaware
* * * *
David R. Bovee, being the Vice-President of Dura Mechanical Components,
Inc., a corporation duly organized and existing under and by virtue of the
General Corporation Law of the State of Delaware (the "Corporation"), DOES
HEREBY CERTIFY as follows:
FIRST: The Board of Directors of the Corporation adopted the resolution
set forth below proposing an amendment to the Certificate of Incorporation of
the Corporation (the "Amendment") and directed that the Amendment be submitted
to the sole holder of the issued and outstanding shares of Common Stock of the
Corporation entitled to vote thereon for its consideration and approval:
RESOLVED, that the Certificate of Incorporation of the
Corporation be, and hereby is, amended in accordance with Section
242 of the General Corporation Law of the State of Delaware by
deleting ARTICLE ONE thereof in its entirety and substituting
therefor ARTICLE ONE as follows:
ARTICLE ONE
The name of the corporation is Dura Automotive Systems,
Inc.
<PAGE>
SECOND: The Amendment was duly adopted in accordance with Section 228 and
Section 242 of the General Corporation Law of the State of Delaware by the sole
holder of the issued and outstanding shares of the Common Stock of the
Corporation entitled to vote thereon.
* * * * *
-2-
<PAGE>
IN WITNESS WHEREOF, the undersigned does hereby certify under penalties of
perjury that this Certificate of Amendment to the Certificate of Incorporation
of the Corporation is the act and deed of the undersigned and the facts stated
herein are true and accordingly has hereunto set his hand this 29th day of
August, 1994.
DURA MECHANICAL COMPONENTS, INC.,
a Delaware corporation
By: /s/ David R. Bovee
------------------------------------
David R. Bovee
Vice-President
-3-
<PAGE>
[STAMP]
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 04:00 PM 06/10/1996
960168667 - 2246484
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION
OF
DURA AUTOMOTIVE SYSTEMS, INC.
Dura Automotive Systems, Inc., a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware (the
"CORPORATION"),
DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of the Corporation adopted a resolution
amending Article One of the Certificate of Incorporation of the Corporation to
read in its entirety as follows (the "AMENDMENT"):
"ARTICLE ONE
FIRST. The name of the Corporation is Dura Operating Corp."
SECOND: That in lieu of a meeting and vote of stockholders, the holder of
all of the outstanding stock entitled to vote on the Amendment has voted in
favor of the Amendment in accordance with the provisions of Section 228 of the
General Corporation Law of the State of Delaware.
THIRD: That the Amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
<PAGE>
IN WITNESS WHEREOF, Dura Automotive Systems, Inc. has caused this
Certificate of Amendment to be signed by its President and Chief Executive
Officer this 3rd day of June, 1996.
DURA AUTOMOTIVE SYSTEMS, INC.
By: /s/ Karl F. Storrie
-------------------------------------
Karl F. Storrie
President and
Chief Executive Officer
2
<PAGE>
BY-LAWS
OF
DURA MECHANICAL COMPONENTS, INC.(*)
A Delaware Corporation
ARTICLE I
OFFICES
SECTION 1. REGISTERED OFFICE. The registered office of the corporation
in the State of Delaware shall be located at the Corporation Trust Center,
1209 Orange Street, City of Wilmington, County of New Castle. The name of
the corporation's registered agent at such address shall be The Corporation
Trust Company. The registered office and/or registered agent of the
corporation may be changed from time to time by action of the board of
directors.
SECTION 2. OTHER OFFICES. The corporation may also have offices at
such other places, both within and without the State of Delaware, as the
board of directors may from time to time determine or the business of the
corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. PLACE AND TIME OF MEETINGS. An annual meeting of the
stockholders shall be held each year within one hundred twenty (120) days
after the close of the immediately preceding fiscal year of the corporation
for the purpose of electing directors and conducting such other proper
business as may come before the meeting. The date, time and place of the
annual meeting shall be determined by the president of the corporation;
provided, that if the president does not act, the board of directors shall
determine the date, time and place of such meeting.
SECTION 2. SPECIAL MEETINGS. Special meetings of stockholders may be
called for any purpose and may be held at such time and place, within or
without the State of Delaware, as shall be stated in a notice of meeting or
in a duly executed waiver of notice thereof. Such meetings may be called at
any time by the board of directors, the president or the holders of shares
entitled to cast not less than a majority of the votes at the meeting.
SECTION 3. PLACE OF MEETINGS. The board of directors may designate any
place, either within or without the State of Delaware, as the place of
meeting for any annual meeting or for any
- -------------------
*As amended and restated on October 31, 1991.
<PAGE>
special meeting called by the board of directors. If no designation is made,
or if a special meeting be otherwise called, the place of the meeting shall
be the principal executive office of the corporation.
SECTION 4. NOTICE. Whenever stockholders are required or permitted to
take action at a meeting, written or printed notice stating the place, date,
time, and, in the case of special meetings, the purpose or purposes, of such
meeting, shall be given to each stockholder entitled to vote at such meeting
not less than 10 nor more than 60 days before the date of the meeting. All
such notices shall be delivered, either personally or by mail, by or at the
direction of the board of directors, the president or the secretary, and if
mailed, such notice shall be deemed to be delivered when deposited in the
United States mail, postage prepaid, addressed to the stockholder at his, her
or its address as the same appears on the records of the corporation.
Attendance of a person at a meeting, except when the person attends for the
express purpose of objecting at the beginning of the meeting to the
transaction of any business because the meeting is not lawfully called or
convened.
SECTION 5. STOCKHOLDERS LIST. The officer having charge of the stock
ledger of the corporation shall make, at least 10 days before every meeting
of the stockholders, a complete list of the stockholders entitled to vote at
such meeting arranged in alphabetical order, showing the address of each
stockholder and the number of shares registered in the name of each
stockholder. Such list shall be open to the examination of any stockholder,
for any purpose germane to the meeting, during ordinary business hours, for a
period of at least 10 days prior to the meeting, either at a place within the
city where the meeting is to be held, which place shall be specified in the
notice of the meeting or, if not so specified, at the place where the meeting
is to be held. The list shall also be produced and kept at the time and
place of the meeting during the whole time thereof, and may be inspected by
any stockholder who is present.
SECTION 6. QUORUM. The holders of a majority of the outstanding shares
of capital stock, present in person or represented by proxy, shall constitute
a quorum at all meetings of the stockholders, except as otherwise provided by
statute or by the certificate of incorporation. If a quorum is not present,
the holders of a majority of the shares present in person or represented by
proxy at the meeting, and entitled to vote at the meeting, may adjourn the
meeting to another time and/or place.
SECTION 7. ADJOURNED MEETINGS. When a meeting is adjourned to another
time and place, notice need not be given of the adjourned meeting if the time
and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting the corporation may transact any business
which might have been transacted at the original meeting. If the adjournment
is for
- 2 -
<PAGE>
more than thirty days, or if after the adjournment a new record date is fixed
for the adjourned meeting, a notice of the adjourned meeting shall be given
to each stockholder of record entitled to vote at the meeting.
SECTION 8. VOTE REQUIRED. When a quorum is present, the affirmative
vote of the majority of shares present in person or represented by proxy at
the meeting and entitled to vote on the subject matter shall be the act of
the stockholders, unless the question is one upon which by express provisions
of an applicable law or of the certificate of incorporation a different vote
is required, in which case such express provision shall govern and control
the decision of such question.
SECTION 9. VOTING RIGHTS. Except as otherwise provided by the General
Corporation Law of the State of Delaware or by the certificate of
incorporation of the corporation or any amendments thereto and subject to
Section 3 of Article VI hereof, every stockholder shall at every meeting of
the stockholders be entitled to one vote in person or by proxy for each share
of common stock held by such stockholder.
SECTION 10. PROXIES. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for him or
her by proxy, but no such proxy shall be voted or acted upon after three
years from its date, unless the proxy provides for a longer period.
SECTION 11. ACTION BY WRITTEN CONSENT. Unless otherwise provided in
the certificate of incorporation, any action required to be taken at any
annual or special meeting of stockholders of the corporation, or any action
which may be taken at any annual or special meeting of such stockholders, may
be taken without a meeting, without prior notice and without a vote, if a
consent or consents in writing, setting forth the action so taken and bearing
the dates of signature of the stockholders who signed the consent or
consents, shall be signed by the holders of outstanding stock having not less
than the minimum number of votes that would be necessary to authorize or take
such action at a meeting at which all shares entitled to vote thereon were
present and voted and shall be delivered to the corporation by delivery to
its registered office in the state of Delaware, or the corporation's
principal place of business, or an officer or agent of the corporation having
custody of the book or books in which proceedings of meetings of the
stockholders are recorded. Delivery made to the corporation's registered
office shall be by hand or by certified or registered mail, return receipt
requested. All consents properly delivered in accordance with this section
shall be deemed to be recorded when so delivered. No written consent shall
be effective to take the corporate action referred to therein unless, within
sixty days of the earliest dated consent delivered to the corporation as
required by this section, written consents signed by the holders of a
- 3 -
<PAGE>
sufficient number of shares to take such corporate action are so recorded.
Prompt notice of the taking of the corporate action without a meeting by less
than unanimous written consent shall be given to those stockholders who have
not consented in writing. Any action taken pursuant to such written consent
or consents of the stockholders shall have the same force and effect as if
taken by the stockholders at a meeting thereof.
ARTICLE III
DIRECTORS
SECTION 1. GENERAL POWERS. The business and affairs of the corporation
shall be managed by or under the direction of the board of directors.
SECTION 2. NUMBER, ELECTION AND TERM OF OFFICE. The number of
directors which shall constitute the first board shall be one (1).
Thereafter, the number of directors shall be established from time to time by
resolution of the stockholders. The directors shall be elected by a
plurality of the votes of the shares present in person or represented by
proxy at the meeting and entitled to vote in the election of directors. The
directors shall be elected in this manner at the annual meeting of the
stockholders, except as provided in Section 4 of this Article III. Each
director elected shall hold office until a successor is duly elected and
qualified or until his or her earlier death, resignation or removal as
hereinafter provided.
SECTION 3. REMOVAL AND RESIGNATION. Any director or the entire board
of directors may be removed at any time, with or without cause, by the
holders of a majority of the shares then entitled to vote at an election of
directors. Whenever the holders of any class or series are entitled to elect
one or more directors by the provisions of the corporation's certificate of
incorporation, the provisions of this section shall apply, in respect to the
removal without cause or a director or directors so elected, to the vote of
the holders of the outstanding shares of that class or series and not to the
vote of the outstanding shares as a whole. Any director may resign at any
time upon written notice to the corporation.
SECTION 4. VACANCIES. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors shall be
filled by the holders of a majority of the shares then entitled to vote at an
election of directors. Each director so chosen shall hold office until a
successor is duly elected and qualified or until his or her earlier death,
resignation or removal as herein provided.
SECTION 5. ANNUAL MEETINGS. The annual meeting of each newly elected
board of directors shall be held without other notice than
- 4 -
<PAGE>
this by-law immediately after, and at the same place as, the annual meeting
of stockholders.
SECTION 6. OTHER MEETINGS AND NOTICE. Regular meetings, other than
the annual meeting, of the board of directors may be held without notice at
such time and at such place as shall from time to time be determined by
resolution of the board. Special meetings of the board of directors may be
called by or at the request of the president on at least 24 hours notice to
each director, either personally, by telephone, by mail, or by telegraph; in
like manner and on like notice the president must call a special meeting on
the written request of at least a majority of the directors.
SECTION 7. QUORUM, REQUIRED VOTE AND ADJOURNMENT. A majority of the
total number of directors then in office shall constitute a quorum for the
transaction of business, provided that in no event shall a quorum consist of
less than one third of the total number of directors established by the
stockholders pursuant to Section 2 of this Article III. The vote of a
majority of directors present at a meeting at which a quorum is present shall
be the act of the board of directors. If a quorum shall not be present at any
meeting of the board of directors, the directors present thereat may adjourn
the meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present.
SECTION 8. COMMITTEES. The board of directors may, by resolution
passed by a majority of the whole board, designate one or more committees,
each committee to consist of one or more of the directors of the corporation,
which to the extent provided in such resolution or these by-laws shall have
and may exercise the powers of the board of directors in the management and
affairs of the corporation except as otherwise limited by law. The board of
directors may designate one or more directors as alternate members of any
committee, who may replace any absent or disqualified member at any meeting of
the committee. Such committee or committees shall have such name or names as
may be determined from time to time by resolution adopted by the board of
directors. Each committee shall keep regular minutes of its meetings and
report the same to the board of directors when required.
SECTION 9. COMMITTEE RULES. Each committee of the board of directors
may fix its own rules of procedure and shall hold its meetings as provided by
such rules, except as may otherwise be provided by a resolution of the board
of directors designating such committee. In the event that a member and that
member's alternate, if alternates are designated by the board of directors as
provided in Section 8 of this Article III, of such committee is or are
absent or disqualified, the member or members thereof present at any meeting
and not disqualified from voting, whether or not such member or members
constitute a quorum, may unanimously appoint
- 5 -
<PAGE>
another member of the board of directors to act at the meeting in place of
any such absent or disqualified member.
SECTION 10. COMMUNICATIONS EQUIPMENT. Members of the board of
directors or any committee thereof may participate in and act at any meeting
of such board or committee through the use of a conference telephone or other
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in the meeting pursuant to
this section shall constitute presence in person at the meeting.
SECTION 11. WAIVER OF NOTICE AND PRESUMPTION OF ASSENT. Any member of
the board of directors or any committee thereof who is present at a meeting
shall be conclusively presumed to have waived notice of such meeting except
when such member attends for the express purpose of objecting at the
beginning of the meeting to the transaction of any business because the
meeting is not lawfully called or convened. Such member shall be conclusively
presumed to have assented to any action taken unless his or her dissent shall
be entered in the minutes of the meeting or unless his or her written
dissent to such action shall be filed with the person acting as the secretary
of the meeting before the adjournment thereof or shall be forwarded by
registered mail to the secretary of the corporation immediately after the
adjournment of the meeting. Such right to dissent shall not apply to any
member who voted in favor of such action.
SECTION 12. ACTION BY WRITTEN CONSENT. Unless otherwise restricted
by the certificate of incorporation, any action required or permitted to be
taken at any meeting of the board of directors, or of any committee thereof,
may be taken without a meeting if all members of the board or committee, as
the case may be, consent thereto in writing, and the writing or writings are
filed with the minutes of proceedings of the board or committee.
ARTICLE IV
OFFICERS
SECTION 1. NUMBER. The officers of the corporation shall be elected by
the board of directors and may consist of a chairman of the board, a
president, one or more vice-presidents, a secretary, a treasurer, and such
other officers and assistant officers as may be deemed necessary or desirable
by the board of directors. Any number of offices may be held by the same
person. In its discretion, the board of directors may choose not to fill any
office for any period as it may deem advisable.
SECTION 2. ELECTION AND TERM OF OFFICE. The officers of the
corporation shall be elected annually by the board of directors at its first
meeting held after each annual meeting of stockholders or as soon thereafter
as conveniently may be. Vacancies may be filled
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or new offices created and filled at any meeting of the board of directors.
Each officer shall hold office until a successor is duly elected and
qualified or until his or her earlier death, resignation or removal as
hereinafter provided.
SECTION 3. REMOVAL. Any officer or agent elected by the board of
directors may be removed by the board of directors whenever in its judgment
the best interests of the corporation would be served thereby, but such
removal shall be without prejudice to the contract rights, if any, of the
person so removed.
SECTION 4. VACANCIES. Any vacancy occurring in any office because of
death, resignation, removal, disqualification or otherwise, may be filled by
the board of directors for the unexpired portion of the term by the board of
directors then in office.
SECTION 5. COMPENSATION. Compensation of all officers shall be fixed
by the board of directors, and no officer shall be prevented from receiving
such compensation by virtue of his or her also being a director of the
corporation.
SECTION 6. CHAIRMAN OF THE BOARD. The chairman of the board shall be
first in authority, and shall have the powers and perform the duties
incident to that position. Subject to the powers of the board of directors,
he or she shall be in general and active charge of the entire business and
affairs of the corporation, and shall be its chief policy making officer. He
or she shall have such other powers and perform such other duties as may be
prescribed by the board of directors or provided in these by-laws. Whenever
the chief executive officer is unable to serve, by reason of sickness,
absence or otherwise, the chairman of the board shall perform all the duties
and responsibilities and exercise all the powers of the chief executive
officer.
SECTION 7. CHIEF EXECUTIVE OFFICER. The chief executive officer shall
subject to the powers of the board of directors and the chairman of the board
and shall be in general and active charge of the entire business and affairs
of the corporation. He or she shall have such other powers and perform such
other duties as may be prescribed by the board of directors, the chairman of
the board or provided in these by-laws. Whenever the president in unable to
serve, by reason of sickness, absence or otherwise, the chief executive
officer shall perform all the duties and responsibilities and exercise all
the powers of the president.
SECTION 8. THE PRESIDENT. The president shall subject to the powers of
the board of directors, the chairman of the board and the chief executive
officer and have general charge of the business, affairs and property of the
corporation, and control over its officers, agents and employees; and shall
see that all orders and resolutions of the board of directors are carried
into effect. The president shall execute bonds, mortgages and other contracts
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requiring a seal, under the seal of the corporation, except where required or
permitted by law to be otherwise signed and executed and except where the
signing and execution thereof shall be expressly delegated by the board of
directors to some other officer or agent of the corporation. The president
shall have such other powers and perform such other duties as may be
prescribed by the chief executive officer, the chairman of the board or the
board of directors or as may be provided in these by-laws.
SECTION 9. VICE-PRESIDENTS. The vice-president, or if there shall be
more than one, the vice-presidents in the order determined by the board of
directors, shall, in the absence or disability of the president, act with all
of the powers and be subject to all the restrictions of the president. The
vice-presidents shall also perform such other duties and have such other
powers as the board of directors, the chairman of the board, the president or
these by-laws may, from time to time, prescribe.
SECTION 10. THE SECRETARY AND ASSISTANT SECRETARIES. The secretary
shall attend all meetings of the board of directors, all meetings of the
committees thereof and all meetings of the stockholders and record all the
proceedings of the meetings in a book or books to be kept for that purpose.
Under the president's supervision, the secretary shall give, or cause to be
given, all notices required to be given by these by-laws or by law; shall
have such powers and perform such duties as the board of directors, the
chairman of the board, the president or these by-laws may, from time to time,
prescribe; and shall have custody of the corporate seal of the corporation.
The secretary, or an assistant secretary, shall have authority to affix the
corporate seal to any instrument requiring it and when so affixed, it may be
attested by his or her signature or by the signature of such assistant
secretary. The board of directors may give general authority to any other
officer to affix the seal of the corporation and to attest the affixing by
his or her signature. The assistant secretary, or if there be more than one,
the assistant secretaries in the order determined by the board of directors,
shall, in the absence or disability of the secretary, perform the duties and
exercise the powers of the secretary and shall perform such other duties and
have such other powers as the board of directors, the chairman of the board,
the president, or secretary may, from time to time, prescribe.
SECTION 11. THE TREASURER AND ASSISTANT 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 belonging to the
corporation; shall deposit all monies and other valuable effects in the name
and to the credit of the corporation as may be ordered by the board of
directors; shall cause the funds of the corporation to be disbursed when such
disbursements have been duly authorized, taking proper vouchers for such
disbursements; and shall render to the president and the board of directors,
at its regular meeting or when the board of directors so requires, an account
of the corporation; shall have such powers
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and perform such duties as the board of directors, the chairman of the board,
the president or these by-laws may, from time to time, prescribe. If required
by the board of directors, the treasurer shall give the corporation a bond
(which shall be rendered every six years) in such sums and with such surety
or sureties as shall be satisfactory to the board of directors for the
faithful performance of the duties of the office of treasurer and for the
restoration to the corporation, in case of death, resignation, retirement,
or removal from office, of all books, papers, vouchers, money, and other
property of whatever kind in the possession or under the control of the
treasurer belonging to the corporation. The assistant treasurer, or if there
shall be more than one, the assistant treasurers in the order determined by
the board of directors, shall in the absence or disability of the treasurer,
perform the duties and exercise the powers of the treasurer. The assistant
treasurers shall perform such other duties and have such other powers as the
board of directors, the chairman of the board, the president or treasurer
may, from time to time, prescribe.
SECTION 12. OTHER OFFICERS, ASSISTANT OFFICERS AND AGENTS. Officers,
assistant officers and agents, if any, other than those whose duties are
provided for in these by-laws, shall have such authority and perform such
duties as may from time to time be prescribed by resolution of the board of
directors.
SECTION 13. ABSENCE OR DISABILITY OF OFFICERS. In the case of the
absence or disability of any officer of the corporation and of any person
hereby authorized to act in such officer's place during such officer's
absence or disability, the board of directors may by resolution delegate the
powers and duties of such officer to any other officer or to any director, or
to any other person whom it may select.
ARTICLE V
INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS
SECTION 1. NATURE OF INDEMNITY. Each person who was or is made a party
or is threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a
person of whom he or she is the legal representative, 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, employee, fiduciary, or agent of another
corporation or of a partnership, joint venture, trust or other enterprise,
shall be indemnified and held harmless by the corporation to the fullest
extent which it is empowered to do so by the General Corporation Law of the
State of Delaware, as the same exists or may hereafter be amended against all
expense, liability and loss (including attorneys' fees actually and
reasonably incurred by such person in connection with such proceeding and such
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indemnification shall inure to the benefit of his or her heirs, executors and
administrators; provided, however, that, except as provided in Section 2
hereof, the corporation shall indemnify any such person seeking
indemnification in connection with a proceeding initiated by such person only
if such proceeding was authorized by the board of directors of the
corporation. The corporation may, by action of its board of directors,
provide indemnification to employees and agents of the corporation with the
same scope and effect as the foregoing indemnification of directors and
officers.
SECTION 2. PROCEDURE FOR INDEMNIFICATION OF DIRECTORS AND OFFICERS. Any
indemnification of a director or officer of the corporation under Section 1
of this Article V or advance of expenses under Section 5 of this Article V
shall be made promptly, and in any event within 30 days, upon the written
request of the director or officer. If a determination by the corporation
that the director or officer is entitled to indemnification pursuant to this
Article V is required, and the corporation fails to respond within sixty days
to a written request for indemnity, the corporation shall be deemed to have
approved the request. If the corporation denies a written request for
indemnification or advancing of expenses, in whole or in part, or if payment
in full pursuant to such request is not made within 30 days, the right to
indemnification or advances as granted by this Article V shall be enforceable
by the director or officer in any court of competent jurisdiction. Such
person's costs and expenses incurred in connection with successfully
establishing his or her right to indemnification, in whole or in part, in any
such action shall also be indemnified by the corporation. It shall
be a defense to any such action (other than an action brought to enforce a
claim for expenses incurred in defending any proceeding in advance of its
final disposition where the required undertaking, if any, has been tendered
to the corporation) that the claimant has not met the standards of conduct
which make it permissible under the General Corporation Law of the State of
Delaware for the corporation to indemnify the claimant for the amount
claimed, but the burden of such defense shall be on the corporation. Neither
the failure of the corporation (including its board of directors, independent
legal counsel, or its stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances because he or she has met the applicable standard of
conduct set forth in the General Corporation Law of the State of Delaware,
nor an actual determination by the corporation (including its board of
directors, independent legal counsel, or its stockholders) that the
claimant has not met such applicable standard of conduct, shall be a defense
to the action or create a presumption that the claimant has not met the
applicable standard of conduct.
SECTION 3. ARTICLE NOT EXCLUSIVE. The rights to indemnification and the
payment of expenses incurred in defending a proceeding in advance of its
final disposition conferred in this Article V shall not be exclusive of any
other right which any
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person may have or hereafter acquire under any statute, provision of the
certificate of incorporation, by-law, agreement, vote of stockholders or
disinterested directors or otherwise.
SECTION 4. INSURANCE. The corporation may purchase and maintain
insurance on its own behalf and on behalf of any person who is or was a
director, officer, employee, fiduciary, or agent of the corporation 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 him or her and incurred by
him or her in any such capacity, whether or not the corporation would have
the power to indemnify such person against such liability under this Article
V.
SECTION 5. EXPENSES. Expenses incurred by any person described in
Section 1 of this Article V in defending a proceeding shall be paid by the
corporation in advance of such proceeding's final disposition upon receipt of
an undertaking by or on behalf of the director or officer to repay such amount
if it shall ultimately be determined that he or she is not entitled to be
indemnified by the corporation. Such expenses incurred by other employees
and agents may be so paid upon such terms and conditions, if any, as the
board of directors deems appropriate.
SECTION 6. EMPLOYEES AND AGENTS. Persons who are not covered by the
foregoing provisions of the Article V and who are or were employees or agents
of the corporation, or who are or were serving at the request of the
corporation as employees or agents of another corporation, partnership, joint
venture, trust or other enterprise, may be indemnified to the extent
authorized at any time or from time to time by the board of directors.
SECTION 7. CONTRACT RIGHTS. The provisions of this Article V shall be
deemed to be a contract right between the corporation and each director or
officer who serves in any such capacity at any time while this Article V and
the relevant provisions of the General Corporation Law of the State of
Delaware or other applicable law are in effect, and any repeal or
modification of this Article V or any such law shall not affect any rights or
obligations then existing with respect to any state of facts or proceeding
then existing.
SECTION 8. MERGER OR CONSOLIDATION. For purposes of this Article V,
references to "the corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, and employees or agents, so that any person who is or
was a director, officer, employee or agent of such constituent corporation,
or is or was serving at the request of such constituent corporation as a
director, officer, employee or
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agent of another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under this Article V with
respect to the resulting or surviving corporation as he or she would have
with respect to such constituent corporation if its separate existence had
continued.
ARTICLE VI
CERTIFICATES OF STOCK
SECTION 1. FORM. Every holder of stock in the corporation shall be
entitled to have a certificate, signed by, or in the name of the corporation
by the chairman of the board, president or a vice-president and the secretary
or an assistant secretary of the corporation, certifying the number of shares
owned by such holder in the corporation. If such a certificate is
countersigned (1) by a transfer agent or an assistant transfer agent other
than the corporation or its employee or (2) by a registrar, other than the
corporation or its employee, the signature of any such chairman of the board,
president, vice-president, secretary, or assistant secretary may be
facsimiles. In case any officer or officers who have signed, or whose
facsimile signature or signatures have been used on, any such certificate or
certificates shall cease to be such officer or officers of the corporation
whether because of death, resignation or otherwise before such certificate or
certificates have been delivered by the corporation, such certificate or
certificates may nevertheless be issued and delivered as though the person or
persons who signed such certificate or certificates or whose facsimile
signature or signatures have been used thereon had not ceased to be such
officer or officers of the corporation. All certificates for shares shall be
consecutively numbered or otherwise identified. The name of the person to
whom the shares represented thereby are issued, with the number of shares and
date of issue, shall be entered on the books of the corporation. Shares of
stock of the corporation shall only be transferred on the books of the
corporation by the holder of record thereof or by such holder's attorney duly
authorized in writing, upon surrender to the corporation of the certificate
or certificates for such shares endorsed by the appropriate person or
persons, with such evidence of the authenticity of such endorsement,
transfer, authorization, and other matters as the corporation may reasonably
require, and accompanied by all necessary stock transfer stamps. In that
event, it shall be the duty of the corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate or certificates, and
record the transaction on its books. The board of directors may appoint a
bank or trust company organized under the laws of the United States or any
state thereof to act as its transfer agent or registrar, or both in
connection with the transfer of any class or series of securities of the
corporation.
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SECTION 2. LOST CERTIFICATES. The board of directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates previously issued by the corporation alleged to have been lost,
stolen, or destroyed, upon the making of an affidavit of that fact by the
person claiming the certificate of stock to be lost, stolen, or destroyed.
When authorizing such issue of a new certificate or certificates, the board
of directors may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost, stolen, or destroyed
certificate or certificates, or his or her legal representative, to give the
corporation a bond sufficient to indemnify the corporation against any claim
that may be made against the corporation on account of the loss, theft or
destruction of any such certificate or the issuance of such new certificate.
SECTION 3. FIXING A RECORD DATE FOR STOCKHOLDER MEETINGS. In order
that the corporation may determine the stockholders entitled to notice of or
to vote at any meeting of stockholders or any adjournment thereof, the board
of directors may fix a record date, which record date shall not precede the
date upon which the resolution fixing the record date is adopted by the board
of directors, and which record date shall not be more than sixty nor less
than ten days before the date of such meeting. If no record date is fixed by
the board of directors, the record date for determining stockholders entitled
to notice of or to vote at a meeting of stockholders shall be the close of
business on the next day preceding the day on which notice is given, or if
notice is waived, at the close of business on the day next preceding the day
on which the meeting is held. A determination of stockholders of record
entitled to notice of or to vote at a meeting of stockholders shall apply to
any adjournment of the meeting; provided, however, that the board of
directors may fix a new record date for the adjourned meeting.
SECTION 4. FIXING A RECORD DATE FOR ACTION BY WRITTEN CONSENT. In
order that the corporation may determine the stockholders entitled to consent
to corporate action in writing without a meeting, the board of directors may
fix a record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the board of directors, and
which date shall not be more than ten days after the date upon which the
resolution fixing the record date is adopted by the board of directors. If no
record date has been fixed by the board of directors, the record date for
determining stockholders entitled to consent to corporate action in writing
without a meeting, when no prior action by the board of directors is required
by statute, shall be the first date on which a signed written consent setting
forth the action taken or proposed to be taken is delivered to the
corporation by delivery to its registered office in the State of Delaware,
its principal place of business, or an officer or agent of the corporation
having custody of the book in which proceedings of meetings of stockholders
are recorded. Delivery made to the
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corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested. If no record date has been fixed
by the board of directors and prior action by the board of directors is
required by statute, the record date for determining stockholders entitled to
consent to corporate action in writing without a meeting shall be at the
close of business on the day on which the board of directors adopts the
resolution taking such prior action.
SECTION 5. FIXING A RECORD DATE FOR OTHER PURPOSES. In order that the
corporation may determine the stockholders entitled to receive payment of any
dividend or other distribution or allotment or any rights or the stockholders
entitled to exercise any rights in respect of any change, conversion or
exchange of stock, or for the purposes of any other lawful action, the board
of directors may fix a record date, which record date shall not precede the
date upon which the resolution fixing the record date is adopted, and which
record date shall be not more than sixty days prior to such action. If no
record date is fixed, the record date for determining stockholders for any
such purpose shall be at the close of business on the day on which the board
of directors adopts the resolution relating thereto.
SECTION 6. REGISTERED STOCKHOLDERS. Prior to the surrender to the
corporation of the certificate or certificates for a share or shares of
stock with a request to record the transfer of such share or shares, the
corporation may treat the registered owner as the person entitled to receive
dividends, to vote, to receive notifications, and otherwise to exercise all
the rights and powers of an owner.
SECTION 7. SUBSCRIPTIONS FOR STOCK. Unless otherwise provided for in
the subscription agreement, subscriptions for shares shall be paid in full
at such time, or in such installments and at such times, as shall be
determined by the board of directors. Any call made by the board of directors
for payment on subscriptions shall be uniform as to all shares of the same
class or as to all shares of the same series. In case of default in the
payment of any installment or call when such payment is due, the corporation
may proceed to collect the amount due in the same manner as any debt due the
corporation.
ARTICLE VII
GENERAL PROVISIONS
SECTION 1. DIVIDENDS. Dividends upon the capital stock of the
corporation, subject to the provisions of the certificate of incorporation,
if any, may be declared by the board of directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property, or in
shares of the capital stock, subject to the provisions of the certificate of
incorporation.
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Before payment of any dividend, there may be set aside out of any funds of
the corporation available for dividends such sum or sums as the directors
from time to time, in their absolute discretion, think proper as a reserve or
reserves to meet contingencies, or for equalizing dividends, or for repairing
or maintaining any property of the corporation, or any other purpose and the
directors may modify or abolish any such reserve in the manner in which it
was created.
SECTION 2. CHECKS, DRAFTS OR ORDERS. All checks, drafts, or other
orders for the payment of money by or to the corporation and all notes and
other evidences of indebtedness issued in the name of the corporation shall
be signed by such officer or officers, agent or agents of the corporation,
and in such manner, as shall be determined by resolution of the board of
directors or a duly authorized committee thereof.
SECTION 3. CONTRACTS. The board of directors may authorize any officer
or officers, or any agent or agents, of the corporation to enter into any
contract or to execute and deliver any instrument in the name of and on
behalf of the corporation, and such authority may be general or confined to
specific instances.
SECTION 4. LOANS. The corporation may lend money to, or guarantee any
obligation of, or otherwise assist any officer or other employee of the
corporation or of its subsidiary, including any officer or employee who is a
director of the corporation or its subsidiary, whenever, in the judgment of
the directors, such loan, guaranty or assistance may reasonably be expected
to benefit the corporation. The loan, guaranty or other assistance may be
with or without interest, and may be unsecured, or secured in such manner as
the board of directors shall approve, including, without limitation, a pledge
of shares of stock of the corporation. Nothing in this section contained
shall be deemed to deny, limit or restrict the powers of guaranty or warranty
of the corporation at common law or under any statute.
SECTION 5. FISCAL YEAR. The fiscal year of the corporation shall be
fixed by resolution of the board of directors.
SECTION 6. CORPORATE SEAL. The board of directors shall provide a
corporate seal which shall be in the form of a circle and shall have
inscribed thereon the name of the corporation and the words "Corporate Seal,
Delaware". The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
SECTION 7. VOTING SECURITIES OWNED BY CORPORATION. Voting securities
in any other corporation held by the corporation shall be voted by the
president, unless the board of directors specifically confers authority to
vote with respect thereto, which authority may be general or confined to
specific instances, upon some other person or officer. Any person authorized
to vote
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securities shall have the power to appoint proxies, with general power of
substitution.
SECTION 8. INSPECTION OF BOOKS AND RECORDS. Any stockholder of record,
in person or by attorney or other agent, shall, upon written demand under
oath stating the purpose thereof, have the right during the usual hours for
business to inspect for any proper purpose the corporation's stock ledger, a
list of its stockholders, and its other books and records, and to make copies
or extracts therefrom. A proper purpose shall mean any purpose reasonably
related to such person's interest as a stockholder. In every instance where
an attorney or other agent shall be the person who seeks the right to
inspection, the demand under oath shall be accompanied by a power of attorney
or such other writing which authorizes the attorney or other agent to so act
on behalf of the stockholder. The demand under oath shall be directed to the
corporation at its registered office in the State of Delaware or at its
principal place of business.
SECTION 9. SECTION HEADINGS. Section headings in these by-laws are for
convenience of reference only and shall not be given any substantive effect
in limiting or otherwise construing any provision herein.
SECTION 10. INCONSISTENT PROVISIONS. In the event that any provision
of these by-laws is or becomes inconsistent with any provision of the
certificate of incorporation, the General Corporation Law of the State of
Delaware or any other applicable law, the provision of these by-laws shall
not be given any effect to the extent of such inconsistency but shall
otherwise be given full force and effect.
ARTICLE VIII
AMENDMENTS
These by-laws may be amended, altered, or repealed and new by-laws
adopted at any meeting of the board of directors by a majority vote. The fact
that the power to adopt, amend, alter, or repeal the by-laws has been
conferred upon the board of directors shall not divest the stockholders of
the same powers.
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Exhibit 3.5
UNITED STATES OF AMERICA
[SEAL]
MICHIGAN DEPARTMENT OF CONSUMER AND INDUSTRY SERVICES
Lansing, Michigan
This is to Certify that the Annexed copy has been compared by me with the record
on file in this Department and that the same is a true copy thereof.
In testimony whereof, I have hereunto set my hand
and affixed the Seal of the Department, in the City
of Lansing, this 16th day of April, 1999.
/s/ Julie Croll , Director
--------------------
172 0423291 Corporation, Securities and Land Development
Bureau
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE>
(Profit Domestic Corporation)
ARTICLES OF INCORPORATION
These Articles of Incorporation are signed by the incorporator(s) 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.
The name of the corporation is G E L, Inc.
ARTICLE II.
The purpose or purposes for which the corporation is organized is to
engage in any activity within the purposes for which corporations may be
organized under the Business Corporation Act of Michigan. To take raw
materials and fabricate into semi-finished and finished products through use
of machining operations, stamping, grinding and assembly; to design, build,
manufacture, sell and re-sell all types of products; to acquire, buy, sell,
lease, mortgage and hold any real estate.
ARTICLE III.
The total authorized capital stock is:
{Preferred shs.______ Par value $________}
(1) { } per share
{Common shs. 50,000 Par value $1.00 }
{Preferred _____}
and/or shs. of (2) { } no par value. (See part 3 of instructions)
{Common_________}
(3) A statement of all or any of the relative rights, preferences and
limitations of the shares of each class is as follows: All one class, fully
paid and non-assessable. At all elections of Directors of such corporation,
each shareholder shall be entitled to as many votes as shall equal the number of
his shares multiplied by the number of Directors to be elected, and that he may
cast all of such votes for a single Director or may distribute them among the
number to be voted for or any two or more of them as he may see fit. Fifty per
cent (50%) of the number of shares having voting power, the holders of which
shall be present or represented by Proxy at any meeting, shall constitute a
quorum for and votes necessary for the transaction of any business.
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE>
ARTICLE IV.
The address of the initial registered office is:
12249 Lovan Rd. Livonia, Michigan 48150
-------------------------------------- ----------
(No. and Street) (Town or City) (ZIP Code)
The mailing address of the initial registered office is (need not be
completed unless different from the above address):
_______________________________________, Michigan________________
(No. and Street) (Town or City) (ZIP Code)
The name of the initial resident agent at the registered office is:
JOHN M. COPE
----------------
ARTICLE V.
The name(s) and address(es) of the incorporator(s) are as follows:
<TABLE>
<CAPTION>
NAME RESIDENCE OR BUSINESS ADDRESS
---- -----------------------------
<S> <C>
JOHN M. COPE 18715 Innsbrook, Apt. #1
Northville, Michigan 48167
RICHARD BUGOLA 15270 Carol Street
Livonia, Michigan 48150
NICHOLAS DOPULOS 1048 Stafford Place
Detroit, Michigan 48207
</TABLE>
ARTICLE VI.
OPTIONAL (Delete Article VI if not applicable.)
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.
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE>
ARTICLE VII.
(Here insert any desired additional provisions authorized by the Act)
(We), the incorporator(s), sign (our) name(s) this 8th day of Aug. 1976
/s/ John M. Cope
---------------------------------
John M. Cope - President
/s/ Richard Bugola
----------------------------------
Richard Bugola - Vice Pres.
/s/ Nicholas Dopulos
----------------------------------
Nicholas Dopulos - Sec - Treas.
(See Instructions on Reverse Side)
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE>
(Please do not write in spaces below - for Department use)
MICHIGAN DEPARTMENT OF COMMERCE - CORPORATION AND SECURITIES BUREAU
Date Received
Aug. 13, 1976 FILED
Michigan Department of Commerce
AUG 16 1976
/s/ [Illegible]
INFORMATION AND INSTRUCTIONS
Articles of Incorporation - Profit Domestic Corporations
1. Article I - The corporate name of a domestic profit corporation is required
to contain one of the following words or abbreviations: "Corporation",
"Company", "Incorporated", "Limited", "Corp.", "Co.", "Inc." or "Ltd."
2. Article II may state, in general terms, the character of the particular
business to be carried on. Under Section 202(b) of the law, it is a
sufficient compliance to state substantially, ALONE OR WITH SPECIFICALLY
ENUMERATED PURPOSES, that the corporation may engage in any activity within
the purpose for which corporations may be organized under the Business
Corporation Act. The law requires, however, that educational corporations
must state their specific purposes.
3. Article III - The law requires the incorporators of a domestic corporation
having SHARES WITHOUT PAR VALUE to submit IN WRITING the amount of
consideration proposed to be received FOR EACH SHARE which shall be
allocated to stated capital.
4. Article V - The law requires one or more incorporators.
The addresses should include a street number and name (or other
designation), in addition to the name of the city and state.
5. The duration of the corporation should be stated in the Articles ONLY IF
THE DURATION IS NOT PERPETUAL.
6. The Articles must be signed in ink by each incorporator. The names of the
incorporators as set out in Article V should correspond with the
signatures.
7. One original copy of the Articles is required. A true copy will be
prepared by the Corporation and Securities Bureau and returned to the
person submitting the Articles for filing.
8. An effective date, not later than 90 days subsequent to the date of filing,
may be stated in the Articles of Incorporation.
<TABLE>
<S> <C>
9. FEES: Filing Fee................................................$10.00
Franchise Fee - [Illegible] on each dollar of authorized capital
stock, with a minimum franchise fee of...............$25.00
(Make fee payable to State of Michigan)
</TABLE>
10. Mail Articles of Incorporation and fees to:
Michigan Department of Commerce
Corporation and Securities Bureau
Corporation Division
P.O. Drawer C
Lansing, Michigan 48904
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE>
(PLEASE DO NOT WRITE IN SPACES BELOW - FOR DEPARTMENT USE)
MICHIGAN DEPARTMENT OF COMMERCE - CORPORATION AND SECURITIES BUREAU
DATE RECEIVED
JUL 14 1980
FILED
MICHIGAN DEPARTMENT OF COMMERCE
JUL 22 1980
/s/ [Illegible]
-----------------------
DIRECTOR
CORPORATION NUMBER 147-503
CERTIFICATE OF CHANGE OF REGISTERED OFFICE AND/OR CHANGE OF RESIDENT AGENT
(For Use by Domestic and Foreign Corporations)
(See Instructions on Reverse Side)
This certificate is executed in accordance with the provisions of Section
242 of Act 284, Public Acts of 1972, as amended, as follows:
1. The name of the corporation is GEL, Inc.
2. The address of its registered office is: (See Part 1 of instructions on
reverse side)
12249 Levan Rd., Livonia, Michigan 48150
--------------------------------------, ----------
(No. and Street) (Town or City) (ZIP Code)
The mailing address of its registered office is: (Need not be completed
unless different from the above address, see Part 2 of instructions)
Michigan
-------------------------------------------------, --------------
(No. and Street or P.O. Box) (Town or City) (ZIP Code)
3. (The following is to be completed if the address of the registered office
is changed.)
The address of the registered office is changed to: (See Part 2 of
instructions)
32985 Schoolcraft Livonia Michigan 48150
--------------------------------------, ----------
(No. and Street) (Town or City) (ZIP Code)
The mailing address of the registered office is changed to: (Need not be
completed unless different from the above address, see Part 2 of
instructions)
Michigan
-------------------------------------------------, --------------
(No. and Street or P.O. Box) (Town or City) (ZIP Code)
4. The name of the resident agent is /s/ John M. Cope (John M. Cope)
--------------------------------------
(See Part 3 of instructions)
5. (The following is to be completed if the resident agent is changed.)
The name of the successor resident agent is
-----------------------------
6. The corporation further states that the address of its registered office
and the address of the business office of its resident agent, as changed,
are identical.
7. The changes designated above were authorized by resolution duly adopted by
its board of directors or trustees.
Signed this 11 day of July, 1980
MAKE REMITTANCE PAYABLE TO: BY /s/ John M. Cope
"STATE OF MICHIGAN" --------------------------------------
FILING FEE: $5.00 (Signature of President, Vice-President,
Secretary, Assistant Secretary, Chairperson or
Vice-Chairperson)
John M. Cope President
-------------------------------------
(Type or Print Name and Title)
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE>
MICHIGAN DEPARTMENT OF COMMERCE - CORPORATION AND SECURITIES BUREAU
(FOR BUREAU USE ONLY) DATE RECEIVED
APR 30 1985
FILED
MAY 10 1985
Administrator
MICHIGAN DEPT. OF COMMERCE
Corporation & Securities Bureau
CERTIFICATE OF AMENDMENT TO THE ARTICLES OF INCORPORATION
FOR USE BY DOMESTIC CORPORATIONS
(Please read instructions and Paperwork Reduction Act notice on last page)
PURSUANT TO THE PROVISIONS OF ACT 284, PUBLIC ACTS OF 1972, AS AMENDED
(PROFIT CORPORATIONS), OR ACT 162, PUBLIC ACTS OF 1982 (NONPROFIT
CORPORATIONS), THE UNDERSIGNED CORPORATION EXECUTES THE FOLLOWING CERTIFICATE:
1. The present name of the corporation is: GEL, INC.
2. The corporation identification number (CID) assigned by the Bureau is:
147-503
3. The location of its registered office is:
32985 Schoolcraft Livonia Michigan 48150
--------------------------------------, ----------
(Street Address) (City) (ZIP Code)
4. Article III of the Articles of Incorporation is hereby amended to read as
follows:
The total authorized stock is:
Common Shares 5,000,000 Par Value Per Share $.01
--------- -----
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE>
5. COMPLETE SECTION (a) IF THE AMENDMENT WAS ADOPTED BY THE UNANIMOUS CONSENT
OF THE INCORPORATOR(S) BEFORE THE FIRST MEETING OF THE BOARD OF DIRECTORS
OR TRUSTEES; OTHERWISE, COMPLETE SECTION (b)
a. / / The foregoing amendment to the Articles of Incorporation was duly
adopted on the _____ day of _______________, 19_____, in accordance
with the provisions of the Act by the unanimous consent of the
incorporator(s) before the first meeting of the board of directors or
trustees.
Signed this ________day of _______________________, 19_____
________________________________ ________________________________
________________________________ ________________________________
________________________________ ________________________________
________________________________ ________________________________
(Signatures of ALL incorporators; type or print name under each
signature)
b. /X/ The foregoing amendment to the Articles of Incorporation was duly
adopted on the 18th day of April, 1985. The amendment: (check one of
the following)
/ / was duly adopted in accordance with Section 611(2) of the Act
by the vote of the shareholders if a profit corporation, or by
the vote of the shareholders or members if a nonprofit
corporation, or by the vote of the directors if a nonprofit
corporation organized on a nonstock directorship basis. The
necessary votes were cast in favor of the amendment.
/ / was duly adopted by the written consent of ALL the directors
pursuant to Section 525 of the Act and the corporation is a
nonprofit corporation organized on a nonstock directorship basis.
/ / was duly adopted by the written consent of the shareholders or
members having not less than the minimum number of votes required
by statute in accordance with Section 407(1) and (2) of the Act.
Written notice to shareholders or members who have not consented
in writing has been given. (Note: Written consent by less than
all of the shareholders or members is permitted only if such
provision appears in the Articles of Incorporation.)
/X/ was duly adopted by the written consent of ALL the shareholders
or members entitled to vote in accordance with Section 407(3)
of the Act.
Signed this 18th day of April, 1985
By /s/ John M. Cope
------------------------------------
(Signature)
JOHN M. COPE, President
------------------------------------
(Type or Print Name and Title)
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE>
DOCUMENT WILL BE RETURNED TO NAME Name of person or organization
AND MAILING ADDRESS INDICATED IN remitting fees:
THE BOX BELOW. Include name,
street and number (or P.O. box),
city, state and ZIP code. Bassey and Selesko P.C.
-----------------------
-----------------------
Mrs. Sandra L. Polny, Legal Assistant Preparer's name and business
BASSEY AND SELESKO P.C. telephone number:
1400 American Center
27777 Franklin Road Sandra L. Polny
Southfield, Michigan 48034-2379 ----------------------------
(313) 355-5000
----------------------------
INFORMATION AND INSTRUCTIONS
1. This form is issued under the authority of Act 284, P.A. of 1972, as
amended, and Act 162, P.A. of 1982. The amendment cannot be filed until
this form, or a comparable document, is submitted.
2. Submit one original copy of this document. Upon filing, a microfilm copy
will be prepared for the records of the Corporation and Securities Bureau.
The original copy will be returned to the address appearing in the box
above as evidence of filing.
Since this document must be microfilmed, it is important that the filing be
legible. Documents with poor black and white contrast, or otherwise
illegible, will be rejected.
3. This document is to be used pursuant to the provisions of section 631 of
the Act for the purpose of amending the articles of incorporation of a
domestic profit or nonprofit corporation. A nonprofit corporation is one
incorporated to carry out any lawful purpose or purposes not involving
pecuniary profit or gain for its directors, officers, shareholders, or
members. A nonprofit corporation organized on a nonstock directorship
basis, as authorized by Section 302 of the Act, may or may not have
members, but if it has members, the members are not entitled to vote.
4. Item 2--Enter the identification number previously assigned by the Bureau.
If this number is unknown, leave it blank.
5. Item 4--The entire article being amended must be set forth in its entirety.
However, if the article being amended is divided into separately
identifiable sections, only the sections being amended need be included.
6. This document is effective on the date approved and filed by the Bureau. A
later effective date, no more than 90 days after the date of delivery, may
be stated.
7. If the amendment is adopted before the first meeting of the board of
directors, item 5(a) must be completed and signed in ink by all of the
incorporators. If the amendment is otherwise adopted, item 5(b) must be
completed and signed in ink by the president, vice-president, chairperson,
or vice-chairperson of the corporation.
8. FEES: Filing fee (Make remittance payable to State of Michigan)....$10.00
Franchise fee for profit corporations (payable only if
authorized capital stock has increased) -- 1/2 mill (.0005)
on each dollar of increase over highest previous authorized
capital stock.
9. Mail form and fee to:
Michigan Department of Commerce
Corporation and Securities Bureau
Corporation Division
P.O. Box 30054
Lansing, MI 48909
Telephone: (517) 373-0493
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE>
MICHIGAN DEPARTMENT OF COMMERCE - CORPORATION AND SECURITIES BUREAU
(FOR BUREAU USE ONLY)
DATE RECEIVED
JUL 30 1985
FILED
AUG 08 1985
Administrator
MICHIGAN DEPT. OF COMMERCE
Corporation & Securities Bureau
CERTIFICATE OF CHANGE OF REGISTERED OFFICE
FOR USE BY DOMESTIC AND FOREIGN CORPORATIONS
(Please read instructions and Paperwork Reduction Act notice on reverse side)
PURSUANT TO THE PROVISIONS OF ACT 284, PUBLIC ACTS OF 1972, AS AMENDED
(PROFIT CORPORATIONS), OR ACT 162, PUBLIC ACTS OF 1982 (NONPROFIT
CORPORATIONS), THE UNDERSIGNED CORPORATION EXECUTES THE FOLLOWING CERTIFICATE:
1. The name of the corporation is: GEL, INC.
2. The corporation identification number (CID) assigned by the Bureau is:
147-503
3. a. The address of the registered office as currently on file with the
Bureau is:
32985 Schoolcraft, Livonia Michigan 48150
--------------------------------------, ----------
(Street Address) (City) (ZIP Code)
b. The mailing address of the registered office if different than above
is:
Michigan
-----------------------------------, ----------
(P.O. Box) (City) (ZIP Code)
c. The name of the resident agent as currently on file with the Bureau
is:
JOHN M. COPE
4. (Complete if the address of the registered office is changed)
The address of the registered office is changed to:
34000 Autry, Livonia Michigan 48150-1323
--------------------------------------, ----------
(Street Address) (City) (ZIP Code)
The mailing address of the registered office if different than above is:
Michigan
--------------------------------------, ----------
(P.O. Box) (City) (ZIP Code)
5. (Complete if the resident agent is changed)
The name of the successor resident agent is:
6. The corporation further states that the address of its registered office
and the address of the business office of its resident agent, as changed,
are identical.
7. The above changes were authorized by resolution duly adopted by its board
of directors or trustees.
Signed this 10th day of July, 1985
By /s/ Dennis M. Dresser
-------------------------------------------
(Signature)
DENNIS M. DRESSER, President
-------------------------------------------
(Type or Print Name and Title)
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE>
MICHIGAN DEPARTMENT OF CONSUMER AND INDUSTRY SERVICES
CORPORATION, SECURITIES AND LAND DEVELOPMENT BUREAU
Date Received (FOR BUREAU USE ONLY)
DEC 22, 1998 This document is effective on the date filed, unless
a subsequent effective date within 90 days after
received date is stated in the document.
ADJUSTED PURSUANT TO FILED
TELEPHONE AUTHORIZATION
/s/ M. Aretakis DEC 22 1998
Name EFFECTIVE DATE: DECEMBER 30, 1998
Maria T. Aretakis
- ------------------------------------ EXPIRATION DATE: DECEMBER 31, 2003
Address
525 N. Woodward, Suite 2000
- ------------------------------------
City State Zip Code
Bloomfield Hills, MI 48304-2970
- ------------------------------------
DOCUMENT WILL BE RETURNED TO THE NAME
AND ADDRESS YOU ENTER ABOVE.
IF LEFT BLANK DOCUMENT WILL BE MAILED
TO THE REGISTERED OFFICE.
CERTIFICATE OF ASSUMED NAME
FOR USE BY CORPORATIONS, LIMITED PARTNERSHIPS AND
LIMITED LIABILITY COMPANIES
(Please read information and instructions on reverse side)
PURSUANT TO THE PROVISIONS OF ACT 284, PUBLIC ACTS OF 1972 (PROFIT
CORPORATIONS), ACT 162, PUBLIC ACTS OF 1982 (NONPROFIT CORPORATIONS), ACT
213, PUBLIC ACTS OF 1982 (LIMITED PARTNERSHIPS), OR ACT 23, PUBLIC ACTS OF
1993 (LIMITED LIABILITY COMPANIES), THE CORPORATION, LIMITED PARTNERSHIP, OR
LIMITED LIABILITY COMPANY IN ITEM ONE EXECUTES THE FOLLOWING CERTIFICATE:
1. The name of the corporation, limited partnership, or limited liability
company is:
Dura Automotive Systems, Inc. Column Shifter Operations
2. The identification number assigned by the Bureau is: 147-503
3. The assumed name under which business is to be transacted is:
Dura Automotive Systems, Inc.
4. This document is hereby signed as required by the Act.
The effective date of this Certificate of Assumed Name shall be December 30,
1998.
COMPLETE ITEM 5 ON LAST PAGE IF THE NAME IS ASSUMED BY MORE THAN ONE ENTITY.
Signed this 17th day of December, 1998
By /s/ Stephen Graham
- -------------------------------------------------------------
(Signature)
Stephen Graham Authorized Officer
- -------------------------------------------------------------
(Type or Print Name) (Type or Print Title)
- -------------------------------------------------------------
(Limited Partnerships Only - Indicate Name of General Partner
if the General Partner is a corporation or other entity)
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE>
5. If the same name is assumed by two or more corporations, limited
partnerships, or limited liability companies, or any combination thereof,
each participant corporation, limited partnership, or limited liability
company shall file a separate certificate. Each assumed name certificate
shall reflect the correct true name or qualifying assumed name of the other
corporations, limited partnerships, or limited liability companies which
are simultaneously adopting the same assumed name.
An entity that already has the assumed name shall simultaneously file a
CERTIFICATE OF TERMINATION OF ASSUMED NAME and a new CERTIFICATE OF ASSUMED
NAME.
Listed below in alphabetical order are the participating corporations
and/or limited partnerships and/or limited liability companies and their
identification numbers.
<TABLE>
<S> <C>
1. Dura Operating Corp. 640-292
- -------------------------------------------------------- -------------
2.
- -------------------------------------------------------- -------------
3.
- -------------------------------------------------------- -------------
4.
- -------------------------------------------------------- -------------
5.
- -------------------------------------------------------- -------------
6.
- -------------------------------------------------------- -------------
7.
- -------------------------------------------------------- -------------
8.
- -------------------------------------------------------- -------------
9.
- -------------------------------------------------------- -------------
10.
- -------------------------------------------------------- -------------
11.
- -------------------------------------------------------- -------------
12.
- -------------------------------------------------------- -------------
13.
- -------------------------------------------------------- -------------
14.
- -------------------------------------------------------- -------------
15.
- -------------------------------------------------------- -------------
</TABLE>
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE>
MICHIGAN DEPARTMENT OF CONSUMER AND INDUSTRY SERVICES
CORPORATION, SECURITIES AND LAND DEVELOPMENT BUREAU
Date Received (FOR BUREAU USE ONLY)
DEC 22 1998 This document is effective on the date filed, unless a
subsequent effective date within 90 days after received
date is stated in the document.
ADJUSTED PURSUANT TO FILED
TELEPHONE AUTHORIZATION DEC 22 1998
/s/ M. Aretakis
Name EFFECTIVE DATE: December 30, 1998
Maria T. Aretakis
- ------------------------------------
Address
525 N. Woodward, Suite 2000
- ------------------------------------
City State Zip Code
Bloomfield Hills, MI 48304-2970
- ------------------------------------
DOCUMENT WILL BE RETURNED TO THE NAME
AND ADDRESS YOU ENTER ABOVE.
IF LEFT BLANK DOCUMENT WILL BE MAILED
TO THE REGISTERED OFFICE.
CERTIFICATE OF MERGER
FOR USE BY PARENT AND SUBSIDIARY PROFIT CORPORATIONS
(Please read information and instructions on the last page)
PURSUANT TO THE PROVISIONS OF ACT 284, PUBLIC ACTS OF 1972, THE
UNDERSIGNED CORPORATION EXECUTES THE FOLLOWING CERTIFICATE:
1. a. The name of each constituent corporation and its identification number
is:
Dura Shift Systems, Inc.
------------
Dura Automotive Systems, Inc. Column Shifter Operations 147-503
------------
b. The name of the surviving corporation and its identification number
is:
Dura Automotive Systems, Inc. Column Shifter Operations 147-503
------------
c. For each subsidiary corporation, state:
<TABLE>
<CAPTION>
Number of outstanding Number of shares owned by the
Name of corporation shares in each class parent corporation in each class
<S> <C> <C>
Dura Shift Systems, Inc. 1,000 1,000
</TABLE>
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE>
d. The manner and basis of converting the shares of each constituent
corporation is as follows:
See Exhibit A attached hereto.
e. The amendments to the Articles or a Restatement of the Articles of
Incorporation of the surviving corporation to be effected by the
merger are as follows:
Not Applicable.
f. Other provisions with respect to the merger are as follows:
See Exhibit A attached hereto.
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE>
2. The merger is permitted by the state or country under whose law it is
incorporated and each foreign corporation has complied with that law in
effecting the merger.
3. (Delete if not applicable)
DELETED
4. (Delete if not applicable)
DELETED
5. (Complete only if an effective date is desired other than the date of
filing)
The merger shall be effective on the 30th day of December, 1998.
Signed this 17th day of December, 1998
Dura Automotive Systems, Inc. Column Shifter Operations
-------------------------------------------------------------
(Name of Parent Corporation)
By /s/ Karl Storrie
----------------------------------------------------------
(Signature of an authorized officer or agent)
Karl Storrie
----------------------------------------------------------
(Type or Print Name)
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE>
EXHIBIT A
PLAN OF MERGER
PLAN OF MERGER dated as of the 17th day of December, 1998 of Dura Shift
Systems, Inc., a Delaware corporation ("Subsidiary") with and into Dura
Automotive Systems, Inc. Column Shifter Operations, a Michigan corporation
("Parent"). Subsidiary and Parent are hereinafter sometimes called the
"Constituent Corporations" and Parent is hereinafter sometimes called the
"Surviving Corporation".
Parent is a corporation duly organized and existing under the laws of the
State of Michigan, having an authorized capital stock consisting of 5,000,000
shares of Common Stock, $0.01 par value ("Parent Common Stock"). As of the date
hereof, 1,000,000 shares of Parent Common Stock were issued and outstanding.
Subsidiary is a corporation duly organized and existing under the laws of
the State of Delaware having an authorized capital stock consisting of 1,000
shares of Common Stock, $1.00 par value ("Subsidiary Common Stock"). As of the
date hereof, 1,000 shares of Subsidiary Common Stock were issued and
outstanding.
Parent owns all of the outstanding shares of Subsidiary Common Stock.
The directors of Parent deem it advisable for the welfare and best
interests of the Constituent Corporations and for the best interest of the
respective shareholders of said corporations that Subsidiary be merged with and
into Parent on the terms and conditions hereinafter set forth in accordance with
the provisions of Sections 711 and 735 of the Michigan Business Corporation Act
(the "Michigan Act") and Section 253 of the General Corporation Law of the State
of Delaware (the "Delaware Act") which permit such merger (the "Merger").
ARTICLE I.
The Merger
Section 1.1 MERGER OF SUBSIDIARY INTO PARENT. At the Effective Time of
the Merger (as defined in Section 1.2 hereof), Subsidiary shall be merged with
and into Parent. The separate existence of Subsidiary shall thereupon cease,
and Parent shall continue its corporate existence as the Surviving Corporation
under the laws of the State of Michigan under the name of Dura Automotive
Systems, Inc. Column Shifter Operations.
Section 1.2 EFFECTIVE TIME OF THE MERGER. The Merger shall become
effective upon the later of the filing of a Certificate of Merger with the
Department of Commerce, Corporation and Securities Division of the State of
Michigan in accordance with the
1
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE>
Michigan Act and December 30, 1998. The date and time of such effectiveness are
referred to herein as the "Effective Time of the Merger."
Section 1.3 EFFECTS OF THE MERGER. At the Effective Time of the Merger:
(i) the separate existence of Subsidiary shall cease and
Subsidiary shall be merged with and into Parent, which shall be the Surviving
Corporation;
(ii) the Articles of Incorporation of Parent as in effect
immediately prior to the Effective Time of the Merger shall continue in full
force and effect as the Articles of Incorporation of the Surviving Corporation
until they shall thereafter be amended in accordance with its terms and as
provided by law;
(iii) the By-Laws of Parent as in effect immediately prior to the
Effective Time of the Merger shall continue in full force and effect and be the
By-Laws of the Surviving Corporation until they shall thereafter be amended in
accordance with their terms and as provided by law;
(iv) the directors of Parent in office at the Effective Time of the
Merger shall be the directors of the Surviving Corporation, each of such
directors to hold office, subject to the applicable provisions of the By-Laws of
the Surviving Corporation and the Michigan Act, until his or her successor shall
be elected and shall duly qualify;
(v) the officers of Parent in office at the Effective Time of the
Merger shall be the officers of the Surviving Corporation, each of such officers
to hold office, subject to the applicable provisions of the By-Laws of the
Surviving Corporation and the Michigan Act, at the pleasure of the Board of
Directors and until his or her successor is appointed or elected and shall duly
qualify;
(vi) the Surviving Corporation shall possess all the rights,
privileges, immunities, and franchises, of a public as well as of a private
nature, of each of the Constituent Corporations; and all property, real,
personal, and mixed, and all debts due on whatever account, and all other choses
in action, and all and every other interest, of or belonging to or due to each
of the Constituent Corporations, shall be taken and deemed to be transferred to
and vested in the Surviving Corporation without further act or deed; and
(vii) the Surviving Corporation shall thenceforth be responsible and
liable for all liabilities and obligations of each of the Constituent
Corporations, and any claim existing or action or proceeding pending by or
against either of the Constituent Corporations may be prosecuted as if such
Merger had not taken place or the Surviving Corporation may be substituted in
its place. Neither the rights of creditors nor liens upon the property of
either of the Constituent Corporations shall be impaired by the Merger.
2
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE>
ARTICLE II
Effect of Merger on Common Stock
of the Constituent Corporations
Section 2.1 SUBSIDIARY COMMON STOCK. At the Effective Time of the
Merger each share of Subsidiary Common Stock, all of which are owned by Parent,
shall be cancelled and no consideration shall be issuable with respect thereto.
Section 2.2 PARENT COMMON STOCK. At the Effective Time of the Merger
each share of Parent Common Stock which is issued and outstanding immediately
prior to the Effective Time of the Merger shall continue to be outstanding
without any change therein.
ARTICLE III.
General
Section 3.1 TERMINATION. This Plan of Merger and the transactions
contemplated hereby may be terminated at any time by the Board of Directors of
Parent before the Effective Time of the Merger.
Section 3.2 GOVERNING LAW. This Plan of Merger shall be governed by and
construed in accordance with the laws of the State of Michigan.
3
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE>
DOCUMENT WILL BE RETURNED TO NAME AND
MAILING ADDRESS INDICATED IN THE BOX Name of person or organization
BELOW. Include name, street and number remitting fees:
(or P.O. box), city, state and ZIP code. BASSEY AND SELESKO P.C.
-----------------------
Rita E. Lowenstein Preparer's name and business
BASSEY AND SELESKO P.C. telephone number:
27777 Franklin Road, Suite 1400
Southfield, Michigan 48034 Ronald D. Bassey
----------------------------
(313) 355-5000
----------------------------
INFORMATION AND INSTRUCTIONS
1. This form is issued under the authority of Act 284, P.A. of 1972, as
amended, and Act 162, P.A. of 1982. The certificate of change of
registered office and/or change of resident agent cannot be filed until
this form, or a comparable document, is submitted.
2. Submit one original copy of this document. Upon filing, a microfilm copy
will be prepared for the records of the Corporation and Securities Bureau.
The original copy will be returned to the address appearing in the box
above as evidence of filing.
Since this document must be microfilmed, it is important that the filing be
legible. Documents with poor black and white contrast, or otherwise
illegible, will be rejected.
3. This document is to be used pursuant to section 242 of the Act by domestic
and foreign, profit and nonprofit, corporations for the purpose of changing
their registered office or resident agent, or both.
4. Item 2--Enter the identification number previously assigned by the Bureau.
If this number is unknown, leave it blank.
5. Item 3--The address of the registered office and the name of the resident
agent must be the same as are designated in the articles of incorporation
or subsequent change filed with the Bureau.
6. Item 4--A post office box may not be designated as the address of the
registered office. The mailing address may differ from the address of the
registered office only if a post office box address in the same city as the
registered office is designated as the mailing address.
7. This certificate must be signed in ink by the president, vice-president,
chairperson, vice-chairperson, secretary or assistant secretary of the
corporation.
8. FEES: Filing fee (Make remittance payable to State of
Michigan)........................................................$ 5.00
9. Mail form and fee to:
Michigan Department of Commerce
Corporation and Securities Bureau
Corporation Division
P.O. Box 30054
Lansing, Michigan 48909
Telephone: (517) 373-0493
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE>
MICHIGAN DEPARTMENT OF COMMERCE - CORPORATION AND SECURITIES BUREAU
(FOR BUREAU USE ONLY) Date Received
FILED FEB 26 1988
MAR 02 1988
Administrator
MICHIGAN DEPARTMENT OF COMMERCE
Corporation & Securities Bureau
CERTIFICATE OF AMENDMENT TO THE ARTICLES OF INCORPORATION
FOR USE BY DOMESTIC CORPORATIONS
(Please read instructions and Paperwork Reduction Act notice on last page)
PURSUANT TO THE PROVISIONS OF ACT 284, PUBLIC ACTS OF 1972, AS AMENDED
(PROFIT CORPORATIONS), OR ACT 162, PUBLIC ACTS OF 1982 (NONPROFIT
CORPORATIONS), THE UNDERSIGNED CORPORATION EXECUTES THE FOLLOWING CERTIFICATE:
1. The present name of the corporation is: G E L, Inc.
2. The corporation identification number (CID) assigned by the Bureau is:
147-503
3. The location of its registered office is:
34000 Autry Livonia, Michigan 48150-1323
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(Street Address) (City) (ZIP Code)
4. A new Article VII of the Articles of Incorporation is hereby added to read
as follows:
Director Liability
See Attachment A
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE>
Attachment A Certificate Of Amendment To The Articles Of Incorporation
CID#147-503
ARTICLE VII
LIABILITY OF DIRECTORS
A director shall not be personally liable to the corporation or its
shareholders for monetary damages for a breach of the director's fiduciary duty.
This provision, however, does not eliminate or limit the liability of a director
for any of the following:
(I) A breach of the director's duty or loyalty to the corporation or
its shareholders,
(II) Acts or omissions not in good faith or acts or omissions that
involve intentional misconduct or a knowing violation of law,
(III) A violation of Section 551(i) of the Michigan Business Corporation
Act.
(IV) A transaction from which the director derived an improper personal
benefit,
(V) An act or omission occurring before the filing date of this Article
with the Michigan Corporation and Securities Bureau,
If, after the adoption of this Article by the corporation, the Michigan
Business Corporation Act is amended to further limit or eliminate the liability
of a director, then a director shall not be liable to the corporation or its
shareholders to the fullest extent of the Michigan Business Corporation Act, as
amended.
Any repeal or modification of this Article by the shareholders of the
corporation shall not adversely affect any right or protection of a director of
the corporation existing at the time of such repeal or modification.
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE>
5. COMPLETE SECTION (a) IF THE AMENDMENT WAS ADOPTED BY THE UNANIMOUS CONSENT
OF THE INCORPORATOR(S) BEFORE THE FIRST MEETING OF THE BOARD OF DIRECTORS
OR TRUSTEES; OTHERWISE, COMPLETE SECTION (b)
a. / / The foregoing amendment to the Articles of Incorporation was duly
adopted on the _____ day of _______________, 19_____, in accordance with
the provisions of the Act by the unanimous consent of the incorporator(s)
before the first meeting of the board of directors or trustees.
Signed this ________day of _______________________, 19_____
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---------------------------- ----------------------------
---------------------------- ----------------------------
(Signatures of ALL incorporators; type or print name under each signature)
b. /X/ The foregoing amendment to the Articles of Incorporation was duly
adopted on the 24th day of February, 1988. The amendment: (check one
of the following)
/ / was duly adopted in accordance with Section 611(2) of the Act by the
vote of the shareholders if a profit corporation, or by the vote of
the shareholders or members if a nonprofit corporation, or by the vote
of the directors if a nonprofit corporation organized on a nonstock
directorship basis. The necessary votes were cast in favor of the
amendment.
/ / was duly adopted by the written consent of ALL the directors pursuant
to Section 525 of the Act and the corporation is a nonprofit
corporation organized on a nonstock directorship basis.
/ / was duly adopted by the written consent of the shareholders or members
having not less than the minimum number of votes required by statute
in accordance with Section 407(1) and (2) of the Act. Written notice
to shareholders or members who have not consented in writing has been
given. (Note: Written consent by less than all of the shareholders or
members is permitted only if such provision appears in the Articles of
Incorporation.)
/X/ was duly adopted by the written consent of ALL the shareholders or
members entitled to vote in accordance with Section 407(3) of the Act.
Signed this 24th day of February, 1988
By /s/ John M. Cope
------------------------------------
(Signature)
John M. Cope, Chairman
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(Type or Print Name and Title)
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE>
DOCUMENT WILL BE RETURNED TO NAME AND
MAILING ADDRESS INDICATED IN THE BOX BELOW. Name of person or organization
Include name, street and number (or P.O. remitting fees:
box), city, state and ZIP code.
Bassey and Selesko P.C.
------------------------------
Rita E. Lowenstein, Legal Assistant Preparer's name and business
Bassey and Selesko P.C. telephone number:
27777 Franklin Road, Suite 1400
Southfield, Michigan 48034 George A. Contis
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(313) 355-5000
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INFORMATION AND INSTRUCTIONS
1. This form is issued under the authority of Act 284, P.A. of 1972, as
amended, and Act 162, P.A. of 1982. The amendment cannot be filed until
this form, or a comparable document, is submitted.
2. Submit one original copy of this document. Upon filing, a microfilm copy
will be prepared for the records of the Corporation and Securities Bureau.
The original copy will be returned to the address appearing in the box
above as evidence of filing.
Since this document must be microfilmed, it is important that the filing be
legible. Documents with poor black and white contrast, or otherwise
illegible, will be rejected.
3. This document is to be used pursuant to the provisions of section 631 of
the Act for the purpose of amending the articles of incorporation of a
domestic profit or nonprofit corporation. A nonprofit corporation is one
incorporated to carry out any lawful purpose or purposes not involving
pecuniary profit or gain for its directors, officers, shareholders, or
members. A nonprofit corporation organized on a nonstock directorship
basis, as authorized by Section 302 of the Act, may or may not have
members, but if it has members, the members are not entitled to vote.
4. Item 2--Enter the identification number previously assigned by the Bureau.
If this number is unknown, leave it blank.
5. Item 4--The entire article being amended must be set forth in its
entirety. However, if the article being amended is divided into separately
identifiable sections, only the sections being amended need be included.
6. This document is effective on the date approved and filed by the Bureau.
A later effective date, no more than 90 days after the date of delivery,
may be stated.
7. If the amendment is adopted before the first meeting of the board of
directors, item 5(a) must be completed and signed in ink by all of the
incorporators. If the amendment is otherwise adopted, item 5(b) must be
completed and signed in ink by the president, vice-president, chairperson,
or vice-chairperson of the corporation.
8. FEES: Filing fee (Make remittance payable to State of Michigan).....$10.00
Franchise fee for profit corporations (payable only if authorized
capital stock has increased)-- 1 1/2 mill (.0005) on each dollar of
increase over highest previous authorized capital stock.
9. Mail form and fee to:
Michigan Department of Commerce
Corporation and Securities Bureau
Corporation Division
P.O. Box 30054
Lansing, MI 48909
Telephone: (517) 373-0493
<PAGE>
MICHIGAN DEPARTMENT OF COMMERCE - CORPORATION AND SECURITIES BUREAU
(FOR BUREAU USE ONLY)
Date Received
JAN 21 1992
FILED
JAN 23 1992
Administrator
MICHIGAN DEPARTMENT OF COMMERCE
Corporation & Securities Bureau
CERTIFICATE OF CHANGE OF RESIDENT AGENT
FOR USE BY DOMESTIC AND FOREIGN CORPORATIONS
(Please read information and instructions on reverse side)
PURSUANT TO THE PROVISIONS OF ACT 284, PUBLIC ACTS OF 1972, (PROFIT
CORPORATIONS), OR ACT 162, PUBLIC ACTS OF 1982 (NONPROFIT CORPORATIONS), THE
UNDERSIGNED CORPORATION EXECUTES THE FOLLOWING CERTIFICATE:
1. The name of the corporation is: G E L, INC.
2. The corporation identification number (CID) assigned by the Bureau is:
147-503
3. a. The address of the registered office as currently on file with the
Bureau is:
34000 Autry, Livonia , Michigan 48150-1323
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(Street Address) (City) (ZIP Code)
b. The mailing address of the above registered office, if different, is:
, Michigan
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(P.O. Box) (City) (ZIP Code)
c. The name of the resident agent as currently on file with the Bureau
is: JOHN M. COPE
COMPLETE THE APPROPRIATE ITEMS FOR ANY INFORMATION THAT HAS CHANGED
4. The address of the registered office is changed to:
, Michigan
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(Street Address) (City) (ZIP Code)
The mailing address of the above registered office, if different, is:
, Michigan
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(P.O. Box) (City) (ZIP Code)
5. The name of the successor resident agent is: DENNIS M. DRESSER
6. The corporation further states that the address of its registered office
and the address of its resident agent, as changed, are identical.
7. a. The above changes were authorized by resolution duly adopted by its
board of directors or trustees, except when this form is being filed
by the resident agent of a profit corporation to change the address of
the registered office.
b. A copy of this statement has been mailed to the corporation.
Signed this 15th day of January, 1992
By /s/ Dennis M. Dresser
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(Signatue)
DENNIS M. DRESSER, President
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(Type of Print Name) (Type of Print Name)
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE>
DOCUMENT WILL BE RETURNED TO NAME AND
MAILING ADDRESS INDICATED IN THE BOX Name of person or organization
BELOW. Include name, street and number remitting fees:
(or P.O. box), city, state and ZIP code.
Bassey and Selesko P.C.
-----------------------
Ronald D. Bassey, Esq. Preparer's name and business
Bassey and Selesko P.C. telephone number:
27777 Franklin Road, Suite 1400
Southfield, Michigan 48034 Ronald D. Bassey
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(313) 355-5000
----------------------------
INFORMATION AND INSTRUCTIONS
1. The certificate of change of registered office and/or change of resident
agent cannot be filed until this form, or a comparable document, is
submitted.
2. Submit one original copy of this document. Upon filing, a microfilm copy
will be prepared for the records of the Corporation and Securities Bureau.
The original copy will be returned to the address appearing in the box
above as evidence of filing.
Since this document must be microfilmed, it is important that the filing be
legible. Documents with poor black and white contrast, or otherwise
illegible, will be rejected.
3. This document is to be used pursuant to section 242 of the Act by domestic
and foreign corporations for the purpose of changing their registered
office or resident agent, or both.
4. Item 2--Enter the identification number previously assigned by the Bureau.
If this number is unknown, leave it blank.
5. Item 3--The address of the registered office and the name of the resident
agent must be the same as are designated in the articles of incorporation
or subsequent change filed with the Bureau.
6. Item 4--A post office box may not be designated as the address of the
registered office. The resident agent can change the registered office by
filing this form only if this is a PROFIT corporation.
7. This certificate must be signed in ink by the president, vice-president,
chairperson, vice-chairperson, secretary or assistant secretary of the
corporation. (Profit corporations only): If only the registered office
address is changed, it may be signed by the resident agent without
addressing Item 5 or Item 7(a).
8. FEES: (Make remittance payable to State of Michigan. Include corporation
name and CID number on check or money order).........................$ 5.00
9. Mail form and fee to:
Michigan Department of Commerce
Corporation and Securities Bureau
Corporation Division
P.O. Box 30054
6546 Mercantile Way
Lansing, Michigan 48909
Telephone: (517) 334-6302
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE>
MICHIGAN DEPARTMENT OF COMMERCE - CORPORATION AND SECURITIES BUREAU
DATE RECEIVED ADJUSTED PURSUANT TO (FOR BUREAU USE ONLY)
NOV 01 1996 TELEPHONE AUTHORIZATION
From Mr. Coon FILED
NOV 1 1996
Name
William G. Coon, Esq. Administrator
Dean & Fulkerson, P.C. MI DEPARTMENT OF CONSUMER &
Address INDUSTRY SERVICES CORPORATION,
801 W. Big Beaver Rd., 5th Floor SECURITIES & LAND DEVELOPMENT
City State Zip BUREAU
Troy MI 48084
EFFECTIVE DATE:
Document will be returned to the name and address you enter above
CERTIFICATE OF MERGER
(PLEASE READ INFORMATION AND INSTRUCTIONS ON LAST PAGE)
PURSUANT TO THE PROVISIONS OF ACT 284, PUBLIC ACTS OF 1972, THE UNDERSIGNED
CORPORATIONS EXECUTE THE FOLLOWING CERTIFICATE:
1. The Plan and Agreement of Merger is as follows:
a. The name of each constituent corporation and its corporation
identification number is:
WLP Acquisition Company CID #377-268
G E L, INC. CID #147-503
b. The name of the surviving corporation and its corporation
identification number is:
G E L, INC. CID #147-503
c. For each constituent corporation of the merger:
<TABLE>
<CAPTION>
Designation and
number of outstanding Class or series
shares in each class of shares
Name of Corporation or series entitled to vote
------------------- --------------------- ----------------
<S> <C> <C> <C>
WLP Acquisition Company 50,000 Shares Voting
G E L, INC. 393,600 Shares Voting
</TABLE>
The number of shares will not change prior to the effective date of the
merger.
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE>
d. The terms and conditions of the proposed merger, including the manner
and basis of converting the shares of, or membership or other interest
in, each constituent corporation into shares, bonds, or other
securities of, or membership or other interest in, the surviving
corporation, or into cash or other consideration, are as follows:
(i) Each share of common stock of the constituent corporations
which shall be outstanding on the effective date of this merger, and
all rights in respect thereof shall forthwith be changed and converted
into shares of common stock of the surviving corporation as set forth
below:
WLP ACQUISITION COMPANY
Each share of WLP Acquisition Company shall be converted into 10
shares of the surviving corporation.
GEL, INC.
Each share of GEL, Inc. shall be converted into 1.270325203 shares of
the surviving corporation. The shares of GEL, Inc. which are owned by
WLP Acquisition Company and, therefore, owned indirectly by the
shareholders of WLP Acquisition Company, shall be deemed divided among
such shareholders in proportion to their respective ownership
interests in WLP Acquisition Company and converted to shares of the
surviving corporation as if directly owned by such shareholders.
(ii) After the effective date of this merger, each holder of an
outstanding certificate representing shares of common stock of a
constituent corporation shall surrender the same to the surviving
corporation and each such holder shall be entitled upon such surrender
to receive the number of shares of common stock of the surviving
corporation on the basis provided herein. Until so surrendered the
outstanding shares of the stock of a constituent corporation to be
converted into the stock of the surviving corporation as provided
herein, may be treated by the surviving corporation for all corporate
purposes as evidencing the ownership of shares of the surviving
corporation as though said surrender and exchange has taken place.
e. Other provisions with respect to the merger are as follows:
(i) The bylaws of the surviving corporation as they shall exist on
the effective date of this merger shall be and remain the bylaws of
the surviving corporation until the same shall be altered, amended and
repealed as therein provided.
(ii) The directors of the surviving corporation shall continue in
office until the next annual meeting of stockholders and until their
successors shall have been elected and qualified.
(iii) Upon the merger becoming effective, all the property, rights,
privileges, franchises, patents, trademarks, licenses, registrations
and other assets of every kind and description of the merged
corporations shall be transferred to, vested in and devolve upon the
surviving corporation without further act or deed and all property,
rights, and every other interest of the surviving corporation and the
merged corporations shall be as effectively the property of the
surviving corporation as they were of the surviving corporation or by
its successors or assigns, to execute and deliver or cause to be
executed and delivered all such deeds and instruments and to take or
cause to be taken such further or other action as the surviving
corporation may deem necessary or desirable in order to vest in and
confirm to the surviving corporation title to and possession of any
property of the merged corporations acquired or to be acquired by
reason of or as a result of the merger herein provided for and
otherwise to carry out the interest and purposes hereof and the proper
officers and directors of the merged corporations and the proper
officers and directors of the surviving corporation are fully
authorized in the name of the merged corporations or otherwise to take
any and all such action.
2. The merger shall be effective on the filing date of this
certificate.
3. a. The Plan and Agreement of Merger was adopted by the Board of
Directors of each of the following constituent corporations:
WLP Acquisition Company
GEL, Inc.
b. The Plan and Agreement of Merger was approved by the shareholders
of the constituent corporations, in accordance with Section
703(a) of the Act.
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE>
4. a. The executed Plan and Agreement of Merger is on file at the
principal place of business of the surviving corporation, 801 W.
Big Beaver Road, Suite 500, Troy, Michigan 48084.
b. A copy of the Plan and Agreement of Merger will be furnished on
request and without cost to any shareholder of any constituent
corporation.
Signed this 1st day of November, 1996
WLP ACQUISITION COMPANY
By: /s/ O. B. Marx III
---------------------------------
O. B. Marx III
Title: President & CEO
Signed this 1st day of November, 1996
GEL, INC.
By: /s/ O. B. Marx III
---------------------------------
O. B. Marx III
Title: Chairman
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE>
MICHIGAN DEPARTMENT OF COMMERCE - CORPORATION AND SECURITIES BUREAU
DATE RECEIVED (FOR BUREAU USE ONLY)
DEC 17 1996 FILED
DEC 18, 1996
Name Administrator
James P. Dean MI DEPARTMENT OF CONSUMER & INDUSTRY SERVICES
Address
801 W. Big Beaver Road, CORPORATION, SECURITIES & LAND DEVELOPMENT BUREAU
5th Floor
City State Zip EFFECTIVE DATE:
Troy, MI 48084
DOCUMENT WILL BE RETURNED TO NAME AND ADDRESS INDICATED ABOVE
CERTIFICATE OF AMENDMENT TO THE ARTICLES OF INCORPORATION
FOR USE BY DOMESTIC CORPORATIONS
(Please read information and instructions on last page)
PURSUANT TO THE PROVISIONS OF ACT 284, PUBLIC ACTS OF 1972 (PROFIT
CORPORATIONS), OR ACT 162, PUBLIC ACTS OF 1982 (NONPROFIT CORPORATIONS), THE
UNDERSIGNED CORPORATION EXECUTES THE FOLLOWING CERTIFICATE:
1. The present name of the corporation is: GEL, INC.
2. The identification number assigned by the Bureau is: 147-503
3. The location of its registered office is:
34000 AUTRY, LIVONIA, MICHIGAN 48150
(Street Address) (City) (ZIP Code)
4. Article 1 of the Articles of Incorporation is hereby amended to read as
follows:
The name of the Corporation is: GT AUTOMOTIVE SYSTEMS, INC.
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE>
5. COMPLETE SECTION (a) IF THE AMENDMENT WAS ADOPTED BY THE UNANIMOUS CONSENT
OF THE INCORPORATOR(S) BEFORE THE FIRST MEETING OF THE BOARD OF DIRECTORS
OR TRUSTEES; OTHERWISE, COMPLETE SECTION (b). DO NOT COMPLETE BOTH.
a. / / The foregoing amendment to the Articles of Incorporation were duly
adopted on the _____ day of _______________, 19_____, in accordance
with the provisions of the Act by the unanimous consent of the
incorporator(s) before the first meeting of the Board of Directors or
Trustees.
Signed this ________day of _______________________, 19_____.
_____________________________ ______________________________
(Signature) (Signature)
_____________________________ ______________________________
(Type or Print Name) (Type or Print Name)
_____________________________ ______________________________
(Signature) (Signature)
_____________________________ ______________________________
(Type or Print Name) (Type or Print Name)
b. /X/ The foregoing amendment to the Articles of Incorporation was duly
adopted on the 16TH day of DECEMBER, 1996. The amendment: (check one
of the following)
/ / was duly adopted in accordance with Section 611(2) of the Act by the
vote of the shareholders if a profit corporation, or by the vote of
the shareholders or members if a nonprofit corporation, or by the vote
of the directors if a nonprofit corporation organized on a non-stock
directorship basis. The necessary votes were cast in favor of the
amendment.
/ / was duly adopted by the written consent of all the directors pursuant
to Section 525 of the Act and the corporation is a nonprofit
corporation organized on a non-stock directorship basis.
/ / was duly adopted by the written consent of the shareholders or members
having not less than the minimum number of votes required by statute
in accordance with Section 407(1) and (2) of the Act if a nonprofit
corporation, and Section 407(1) of the Act if a profit corporation.
Written notice to shareholders who have not consented in writing has
been given. (Note: Written consent by less than all of the
shareholders or members is permitted only if such provision appears in
the Articles of Incorporation.)
/X/ was duly adopted by the written consent of all the shareholders or
members entitled to vote in accordance with Section 407(3) of the Act
if a non-profit corporation, and Section 407(2) of the Act if a profit
corporation.
Signed this 16TH day of DECEMBER, 1996
By /s/ Paul Oster
---------------------------------------------
(Signature)
PAUL OSTER, VICE-PRESIDENT AND TREASURER
---------------------------------------------
(Type or Print Name and Title)
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE>
MICHIGAN DEPARTMENT OF CONSUMER AND INDUSTRY SERVICES
CORPORATION, SECURITIES AND LAND DEVELOPMENT BUREAU
DATE RECEIVED (FOR BUREAU USE ONLY)
May 14 1998 FILED
May 14, 1998
Name Administrator
PH. 517-663-2525 Ref#83019 MI DEPARTMENT OF CONSUMER & INDUSTRY SERVICES
Attn: Cheryl J. Bixby CORPORATION, SECURITIES & LAND DEVELOPMENT BUREAU
MICHIGAN RUNNER SERVICE
P.O. Box 266 EFFECTIVE DATE:
Eaton Rapids, MI 48827-0266
DOCUMENT WILL BE RETURNED TO THE NAME AND ADDRESS YOU ENTER ABOVE
CERTIFICATE OF AMENDMENT TO THE ARTICLES OF INCORPORATION
FOR USE BY DOMESTIC PROFIT CORPORATIONS
(Please read information and instructions on the last page)
PURSUANT TO THE PROVISIONS OF ACT 284, PUBLIC ACTS OF 1972 (PROFIT
CORPORATIONS), OR ACT 162, PUBLIC ACTS OF 1982 (NONPROFIT CORPORATIONS), THE
UNDERSIGNED CORPORATION EXECUTES THE FOLLOWING CERTIFICATE:
1. The present name of the corporation is:
GT Automotive Systems, Inc.
2. The identification number assigned by the Bureau is: 147-503
3. The location of its registered office is:
34000 Autry, Livonia, Michigan 48150
(Street Address) (City) (ZIP Code)
4. Article I of the Articles of Incorporation is hereby amended to read as
follows:
The name of the Corporation is: Dura Automotive Systems, Inc. Column
Shifter Operations.
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE>
5. (For amendments adopted by unanimous consent of incorporators before the
first meeting of the board of directors or trustees.)
The foregoing amendment to the Articles of Incorporation was duly adopted
on the ______ day of __________________, 19____, in accordance with the
provisions of the Act by the unanimous consent of the incorporator(s)
before the first meeting of the Board of Directors or Trustees.
Signed this ________day of_________________, 19____.
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(Signature) (Signature)
---------------------------- ----------------------------
(Type or Print Name) (Type or Print Name)
---------------------------- ----------------------------
(Signature) (Signature)
---------------------------- ----------------------------
(Type or Print Name) (Type or Print Name)
6. (For profit corporations, and for nonprofit corporations whose articles
state the corporation is organized on a stock or on a membership basis.)
The foregoing amendment to the Articles of Incorporation was duly adopted
on the 13th day of May, 1998 by the shareholders of a profit corporation,
or by the shareholders or members of a nonprofit corporation (check one of
the following)
/ / at a meeting. The necessary votes were cast in favor of the
amendment.
/ / by written consent of the shareholders or members having not less than
the minimum number of votes required by statute in accordance with
Section 407(1) and (2) of the Act if a nonprofit corporation, or
Section 407(1) of the Act if a profit corporation. Written notice to
shareholders or members who have not consented in writing has been
given. (Note: Written consent by less than all of the shareholders or
members is permitted only if such provision appears in the Articles of
Incorporation.)
/X/ by written consent of all the shareholders or members entitled to vote
in accordance with section 407(3) of the Act if a nonprofit
corporation, or Section 407(2) of the Act if a profit corporation.
Signed this 13th day of May, 1998.
By: /s/ Karl Storrie
--------------------------------------------
(Signature of President, Vice-President,
Chairperson, Vice-Chairperson)
Karl Storrie Chairperson
--------------------------------------------
(Type or Print Name) (Type or Print Title)
GOLD SEAL APPEARS ONLY ON ORIGINAL
<PAGE>
BY-LAWS
OF
GEL, INC.
ARTICLE I
OFFICES
SECTION 1. The registered office shall be in the City of Livonia,
County of Wayne, State of Michigan.
SECTION 2. The Corporation may also have offices at such other places
both within or without the State of Michigan as the Board of Directors may from
time to time determine or the business of the corporation may require.
ARTICLE II
FISCAL YEAR
SECTION 1. The fiscal year of the corporation shall end on the last day
of December, of each year unless another date shall be fixed by resolution of
the Board of Directors. After such date is fixed, it may be changed for future
fiscal years at any time by further resolution of the Board of Directors.
ARTICLE III
MEETINGS OF SHAREHOLDERS
SECTION 1. All meetings of the Shareholders for the election of
Directors shall be by waiver of notice and consent or shall be held at such
place either within or without the State of Michigan as shall be designated from
time to time by the Board of Directors and stated in the notice of the meeting.
Meetings of Shareholders for any other purpose may be held at such time and
place, within or without the State of Michigan, as shall be stated in the notice
of the meeting or in a duly executed Waiver of Notice thereof.
SECTION 2. Annual meetings of Shareholders, if actually held shall be
held on such date and time as shall be designated f rom time to time by the
Board of Directors and stated in the notice of the meeting, at which they shall
elect by a plurality vote a Board of Directors, and transact such other business
as may properly be brought before the meeting.
SECTION 3. When required by law, written notice of the annual meeting
stating the place, date and hour of the meeting shall be given to each
Shareholder entitled to vote at such meeting not less than ten (10) nor more
than ninety (90) days before the date of the meeting.
<PAGE>
SECTION 4. Special meetings of the Shareholders, for any purpose or
purposes, unless otherwise prescribed by statute or by the Articles of
Incorporation, may be held by waiver of notice and consent or may be called by
the President and shall be called by the President or Secretary at the request
in writing of any two (2) of the Board of Directors, or at the request in
writing of Shareholders owning not less than ten (10%) percent of the entire
capital stock of the Corporation issued and outstanding and entitled to vote.
Such request shall state the purpose or purposes of the proposed meeting.
SECTION 5. When required by law, written notice of a special meeting
stating the place, date and hour of the meeting and the purpose or purposes
for which the meeting is called, shall be given not less than three (3) nor
more than sixty (60) days before the date of the meeting, to each Shareholder
entitled to vote at such meeting.
SECTION 6. Business transacted at any special meeting of Shareholders
shall be limited to the purposes stated in the notice unless all of said
Shareholders agree to do otherwise.
SECTION 7. Except as otherwise provided by statute or by the Articles
of Incorporation, the holders of fifty (50%) percent of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the Shareholders for the
transaction of business. If, however, such quorum shall not be present or
represented at any meeting of the Shareholders, the Shareholders entitled to
vote thereat, present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. At such-adjourned
meeting at which a quorum shall be present or represented at the meeting as
originally notified. If the adjournment is for more than sixty (60) days, or if
after the adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to each Shareholder of record
entitled to vote at the meeting.
SECTION 8. When a quorum is present at any meeting, the vote of the
holders of a majority of the stock having voting power present in person or
represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provision of the statutes or of
the Articles of Incorporation, a different vote is required in which case such
express provision shall govern and control the decision of such question.
SECTION 9. Each Shareholder shall be entitled to one vote in person or
by proxy for each share of capital stock having voting power held by such
Shareholder, but no proxy shall be voted on after three (3) months from its
date, unless the proxy provides for a longer period. If the Articles of
Incorporation provide for more or less than one vote for any share of on any
matter, every reference in this Article to a majority or other proportion of
stock shall refer to such majority or other proportion of the votes of such
stock. At all elections of Directors of the Corporation each Shareholder having
voting power shall be entitled to exercise the right of cumulative voting if
provided in the Articles of Incorporation.
SECTION 10. Whenever the vote of Shareholders at a meeting thereof
is required or
<PAGE>
permitted to be taken for or in connection with any corporate action, by any
provision of the statutes, the meeting and vote of Shareholders may be dispensed
with if all of the Shareholders who would have been entitled to vote upon the
action if such meeting were held shall consent in writing to such corporate
action taken; or if the Articles of Incorporation authorized the action to be
taken with the written consent of the holders of less than all of the stock who
would have been entitled to vote upon the action if a meeting were held, then on
the written consent of the Shareholders having not less than such percentage of
the number of votes as may be authorized in the Articles of Incorporation;
provided that in no case shall the written consent be by the holders of stock
having less than the minimum percentage of the vote required by statute for the
proposed corporate action, and provided that prompt notice must be given to all
Shareholders of the taking of corporate action without a meeting and by less
than unanimous written consent.
ARTICLE IV
DIRECTORS
SECTION 1. The number of Directors which shall constitute the whole
Board shall be determined, from time to time, at the Annual Meeting of
Shareholders, or at any Special Meeting of Shareholders called for that purpose
set forth in Article III, Section 4, and except as provided in Section 2 of this
Article, and each Director elected shall hold office until his successor is
elected and qualified. Directors need not be Shareholder .
SECTION 2. Vacancies and newly created directorships resulting from any
increase in the authorized number of Directors may be filled by a majority of
the Directors then in office, though less than a quorum, or by a sole remaining
Director, and the Directors so chosen shall hold office until the next annual
election and until their successors are duly, elected and shall qualify, unless
sooner displaced. If there are no Directors in office, then an election of
Directors may be held in the manner provided by statute.
SECTION 3. The business of the Corporation shall be managed by its
Board of Directors which may exercise all such powers of the Corporation and do
all such lawful acts and things as are not by statute or by the Articles of
Incorporation or by these By-laws directed or required to be
exercised or done by the Shareholders.
SECTION 4. A Director of the Corporation who is either present at a
meeting of the Board of Directors at which action on any corporate matter is
taken, or who is absent but has notice of such action by certified mail, shall
be presumed to have assented to the action taken unless his dissent shall be
entered in the minutes of the meeting or unless he shall file his written
dissent to such action with the person acting as the Secretary of the meeting
before the adjournment thereof or shall forward such dissent by certified mail
to the Secretary of the Corporation immediately after the adjournment of the
meeting or within seven (7) days after written notification of such action by
certified mail. The objection shall be deemed made when mailed by certified
mail. Such right to dissent shall not apply to a Director who voted in favor of
such action.
<PAGE>
MEETING OF THE BOARD OF DIRECTORS
SECTION 5. The Board of Directors of the Corporation may hold
meetings, both regular and special, either within or without the State of
Michigan.
SECTION 6. The first meeting of each newly elected Board of Directors
shall be held at such time and place as shall be fixed by the vote of the
Shareholders at the annual meeting and no notice of such meeting shall be
necessary to the newly elected Directors in order legally to constitute the
meeting, provided a quorum shall be present. In the event of the failure of the
Shareholders to fix the time or place of such first meeting of the newly elected
Board of Directors, or in the event such meeting is not held at the time and
place so fixed by the Shareholders, the meeting may be held at such time and
place as shall be specified in a notice given as hereinafter provided for
special meetings of the Board of Directors, or as shall be specified in a
written waiver signed by all of the Directors.
SECTION 7. Regular meetings of the Board of Directors may be held
without notice at such time and at such place as shall from time to time be
determined by the Board.
SECTION 8. Special meetings of the Board may be called by the President
on one day's notice to each Director, either personally or by mail or by
telegram; special meetings shall be called by the President or Secretary in like
manner and on like notice on the written request by (2) of the Directors.
SECTION 9. At all meetings of the Board, a majority of the Directors
shall constitute a quorum for the transaction of business and the act of a
majority of the Directors present at any meeting at which there is a quorum
shall be the act of the Board of Directors, except as may be otherwise
specifically provided by statute or by the Articles of Incorporation. If a
quorum shall not be present at any meeting of the Board of Directors the
Directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
SECTION 10. Unless otherwise restricted by the Articles of
Incorporation or these Bylaws, any action required or permitted to be taken at
any meeting of the Board of Directors or of any committee thereof may be taken
without a meeting, if all members of the Board or committee, as the case may be,
consent thereto in writing, and the writing or writings are filled with the
minutes of proceedings of the Board or committee.
4
<PAGE>
SECTION 11. Members of the Board of Directors may participate in a
board meeting by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in a meeting pursuant to this
section shall constitute presence in person at such meeting.
ARTICLE V
NOTICES
SECTION 1. Whenever, under the provisions of the statutes or of the
Articles of Incorporation or of these By-laws, notice is required to be given to
any Director or Stockholder, it shall not be construed to mean personal notice
unless specifically allowed, but such notice may be given in writing, by mail,
addressed to such Director or Stockholder, at his address as it appears on the
records of the Corporation, with postage thereon prepaid, and such notice shall
be deemed to be given at the time when the same shall be deposited in the United
States mail. Notice to Directors may also be given by telegram.
SECTION 2. Whenever any notice is required to be given under the
provisions of the statutes or of the Articles of Incorporation or of these
By-laws, a waiver thereof in writing, signed by the person or persons entitled
to said notice, whether before or after the time stated therein, shall
be deemed equivalent thereto.
ARTICLE VI
OFFICERS
SECTION 1. The Board of Directors, within twenty-one (21) days after
the annual election of the Directors in each year, shall elect from their number
a President of the Corporation and shall also elect a Secretary and a Treasurer,
who need not be members of the Board. The Board at that time or from time to
time may elect one or more Vice Presidents, Assistant Secretaries and Assistant
Treasurers who may or may not be members of the Board. The same person may hold
any two or more offices excepting those of President and Vice President, but no
officer shall execute, acknowledge or verify any instrument in more than one
capacity. The Board may also appoint such other officers and agents as it may
deem necessary for the transaction of the business of the Corporation.
SECTION 2. The term of office of all officers shall be one year or
until their respective successors are chosen, but any officer may be removed
from office, with or without cause, at any
5
<PAGE>
meeting of the Board of Directors by the affirmative vote of a majority of the
Directors then in office. The Board of Directors shall have power to fill any
vacancies in any offices occurring from whatever reason.
SECTION 3. The salaries and other compensation of all officers of
the Corporation shall be fixed by the Board of Directors.
SECTION 4. The President shall be the chief executive officer of the
Corporation and shall have responsibility for the general and active
management of the business of the Corporation, and shall see that all orders
and resolutions of the Board are carried into effect. He shall execute all
authorized conveyances, contracts, or other obligations in the name of the
Corporation except where the signing and execution thereof shall be expressly
delegated by the Board of Directors to some other officer or agent of the
Corporation. He shall preside at all meetings of the Shareholders and
Directors and shall be ex-officio a member of all standing committees of the
Board.
SECTION 5. The Vice Presidents (if any) in the order designated by the
Board of Directors or, lacking such a designation, by the President, shall in
the absence or disability of the President perform the duties and exercise the
powers of the President and shall perform such other
duties as the Board of Directors shall prescribe.
SECTION 6. The Secretary shall attend all meetings of the board and all
meetings of the Shareholders and record all votes and the minutes of all
proceedings in a book to be kept for that purpose and shall perform like duties
for the standing committees when required. He shall give, or cause to be given,
notice of all meetings of the Shareholders and special meetings of the Board of
Directors and shall perform such other duties as may be prescribed by the Board
of Directors or by the President, under whose supervision he shall act. He shall
execute with the President all authorized conveyances, contracts or other
obligations in the name of the Corporation except as otherwise directed by the
Board of Directors. He 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 his signature or by the signature
of the Treasurer or an Assistant Secretary.
The Secretary shall keep a register of the post office address of each
shareholder. Said address shall be furnished to the Secretary by such
shareholder and the responsibility for keeping said address current shall be
upon the shareholder. The Secretary shall have general charge of the stock
transfer books of the Corporation.
6
<PAGE>
SECTION 7. The Treasurer shall have custody of and keep account of all
money, funds and property of the Corporation, unless otherwise determined by the
Board of Directors, and he shall render such accounts and present such
statements to the Directors and Presidents as may be required of him. He shall
deposit funds of the Corporation which may come into his hands in such bank or
banks as the Board of Directors may designate. He shall keep his bank accounts
in the name of the Corporation and shall exhibit his books and accounts at all
reasonable times to any Director of the Corporation upon application at the
office of the Corporation during business hours. If required by the Board of
Directors, he shall give the Corporation a bond in such sum and with such surety
or sureties as shall be satisfactory to the board for the faithful performance
of the duties of his office and for the restoration to the Corporation in case
of his death, resignation or removal from office of all books, papers, vouchers,
money and other property of whatever kind in his possession or under his control
belonging to the Corporation.
SECTION 8. The Assistant Secretaries and the Assistant Treasurers (if
any), respectively, (in the order designated by the Board of Directors or,
lacking such designation, by the President) in the absence of the Secretary or
the Treasurer, as the case may be, shall perform the duties and exercise the
powers of such Secretary or Treasurer and shall perform such other duties as the
Board of Directors shall prescribe.
ARTICLE VII
CERTIFICATES OF SHARES
SECTION 1. Every holder of shares in the Corporation shall be
entitled to have a certificate, signed by, or in the name of the Corporation
by, the Chairman or Vice-Chairman of the Board of Directors or the President
or a Vice-President and the Treasurer or an Assistant Treasurer, or the
Secretary or an Assistant Secretary of the Corporation, certifying the number
of shares owned by him in the Corporation.
Certificates may be issued for partly paid shares and in such case upon
the face or back of the certificates issued to represent any such partly paid
shares, the total amount paid thereon shall be specified.
If the Corporation shall be authorized to issue more than one class of
stock or more than one series of any class, the powers, designations,
preferences and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights shall be set forth in full or
summarized on the face or back of the
7
<PAGE>
certificate which the Corporation shall issue to represent such class or series
of shares, provided that, except as otherwise provided in Section 471 and 472 of
the Michigan Business Corporation Act, in lieu of the foregoing requirements,
there may be set forth on the face or back of the certificate which the
Corporation shall issue to represent such class or series of shares, a statement
that the Corporation will furnish without charge to each Shareholder who so
requests the powers, designations, preferences and relative, participating,
optional or other special rights of each class of stock or series thereof -and
the qualifications, limitations or restrictions of such preferences and/or
rights.
SECTION 2. Where a certificate is countersigned (1) by a transfer agent
other than the Corporation or its employee, or, (2) by a registrar, other than
the Corporation or its employee, any other signature on the certificate may be a
facsimile. In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent or registrar before such certificate is
issued, it may be issued, by the Corporation with the same effect as if he were
such officer, transfer agent or registrar at the date of issue.
LOST CERTIFICATES
SECTION 3. The Board of Directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate or shares to be lost, stolen or destroyed. When authorizing such
issue of a new certificate or certificates, the Board of Directors may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate or certificates, or his
legal representative, to advertise the same in such manner as it shall require
and/or to give the corporation a bond in such sum as it may direct as indemnity
against any claim that may be made against the corporation with respect to the
certificate alleged to have been lost, stolen or destroyed.
TRANSFER OF STOCK
SECTION 4. Upon surrender to the corporation or the transfer agent of
the Corporation of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignment or authority to transfer, it shall be
the duty of the Corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
8
<PAGE>
FIXING RECORD DATE
SECTION 5. In order that the Corporation may determine the
shareholders entitled to notice of or to vote at any meeting of shareholders
or any adjournment thereof, or to express consent to corporate action in
writing without a meeting, or entitled to receive payment of any dividend or
other distribution or allotment of any rights, or entitled to exercise any
rights in respect of any change, conversion or exchange of stock or for the
purpose of any other lawful action, the Board of Directors may fix, in
advance, a record date, which shall not be more than sixty (60) days nor less
than ten (10) days before the date of such meeting, nor more than sixty (60)
days prior to any other action. A determination of shareholders of record
entitled to notice of or to vote at a meeting of shareholders shall apply to
any adjournment of the meeting; provided, however, that the Board of
Directors may fix a new record date for the adjourned meeting. Absent Board
of Director action, the record date shall be ten (10) days before the date of
such meeting.
REGISTERED STOCKHOLDERS
SECTION 6. The Corporation shall be entitled to recognize the exclusive
right of a person registered on its books as the owner of shares to receive
dividends, and to vote as such owner, and to hold liable for calls and
assessments a person registered on its books as the owner of shares, and shall
not be bound to recognize any equitable or other claim of interest in such share
or shares on the part of any other person, whether or not it shall have express
or other notice thereof, except as otherwise provided by the laws of Michigan.
ARTICLE VIII
INDEMNIFICATION
SECTION 1. To the extent permitted by Michigan law from time to time
in effect and subject to the provisions of Section 3 oi this Article, 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 (whether
or not by or in the right of the Corporation) by reason of the fact that he
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,
employee or agent of another corporation, partnership, joint venture, trust
or other enterprise, against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by him
in connection with such action, suit or proceeding if he acted in good faith
and in a manner he 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 no reasonable cause to believe his 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
9
<PAGE>
a manner which he reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe
that his conduct was unlawful.
SECTION 2. To the extent permitted by Michigan law, from time to time
in effect and subject to the provisions of Section 3 of this Article, the
Corporation shall have power to 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 he 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, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him , in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation or its shareholders and except that no indemnification shall be made
in respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable for negligence or misconduct in the performance of his
duty to the Corporation unless and only to the extent that the court in which
such action or suit was brought shall determine 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 indemnity for such expenses which
such court shall deem proper.
SECTION 3. Any indemnification under Sections 1 and 2 of this Article
(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 director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in said Sections I or 2. Such
determination shall be made (1) by the Board of Directors by a majority vote of
a quorum consisting of directors who were not parties to such action, suit or
proceeding, or (2) if such a quorum is not obtainable, or, even if obtainable
and a quorum of disinterested directors so directs, by independent legal counsel
(compensated by the Corporation) in a written opinion, or (3) by the
shareholders.
10
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SECTION 4. If a director, officer, employee or agent of the Corporation
has been successful on the merits or otherwise as a party to any action, suit or
proceedings referred to in Sec tions I or 2 of this Article, or with respect to
any claim, issue or matter therein (to the extent that a portion of his expenses
can be reasonably allocated thereto), he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
SECTION 5. Expenses incurred in defending a civil, criminal,
administrative or investigative action, suit or proceeding, as authorized by the
Board of Directors, whether a disinterested quorum exists or not, upon receipt
of an undertaking by or on behalf of the director, officer, employee or agent to
repay such amount unless it shall ultimately be determined that he is entitled
to be indemnified by the corporation as authorized in this Article shall be
indemnified.
SECTION 6. The indemnification provided by this Article shall not be
deemed exclusive of any other rights to which those indemnified may be entitled
under any agreement, vote of share holders or disinterested directors, or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.
SECTION 7. 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, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him against
such liability under the provisions of this Article or of Sections 561 to 569 of
the Michigan Business Corporation Law.
ARTICLE IX
GENERAL PROVISIONS
DIVIDENDS
SECTION 1. Dividends upon the capital stock of the Corporation,
subject to the provisions of the Articles of Incorporation, if any, may be
declared by the Board of Directors at any
11
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regular or special meeting, pursuant to law. Dividends may be paid in cash, in
property, or in shares of the capital stock, subject to the provisions of the
Articles of Incorporation and the Michigan Business Corporation Act.
SECTION 2. Before payment of any dividend, there may be set aside out
of any funds of the Corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for' equalizing dividends, or for
repairing or maintaining any property of the Corporation, or for such other
purpose as the directors shall think conducive to the interest of the
Corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created
ANNUAL STATEMENT
SECTION 3. When called for by a vote of the Shareholders, the Board
of Directors shall present at each annual meeting and at any special meeting
of the shareholders a full and clear statement of the business and condition
of the Corporation.
CHECKS
SECTION 4. All checks or demands for money and notes of the Corporation
shall be signed by such officer or officers or such other person or persons as
the Board of Directors may from
time to time designate.
SEAL
SECTION 5. The corporate seal shall have inscribed thereon the name
of the Corporation and the words "Corporate Seal, Michigan". The seal may be
used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise.
LOANS
SECTION 6. No loans shall be contracted on behalf of the Corporation
and no evidence of indebtedness shall be issued in its name unless authorized by
a resolution of the Board of Directors. Such authority may be general or
confined to specific instances.
The Corporation may lend money to, or guarantee any obligation of, or
otherwise assist any officer or other employee of the Corporation or of its
subsidiary, including any officer or employee who is a director of the
Corporation or its subsidiary, whenever, in the judgment of the directors,
12
<PAGE>
such loans, guaranty or assistance may reasonably be expected to benefit the
Corporation. The loan, guaranty or other assistance may be with or without
interest,, and may be unsecured or secured in such manner as the Board of
Directors shall approve, including, without limitation, a pledge of shares of
stock of the corporation. Nothing in this section contained shall be deemed to
deny, limit or restrict the powers of guaranty or warranty of any corporation at
common law or under any statute.
CONTRACTS
SECTION 7. The Board of Directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the Corporation, and such authority
may be general or confined to specific instances.
No contract or transaction between a corporation and one or more of its
directors or officers, or between a corporation and any other corporation,
partnership, association, or other organization in which one or more *of its
directors or officers are directors or officers, or have a financial interest,
shall be void or voidable solely for this reason, or solely because the director
or officer is present at or participates in the meeting of the board or
committee thereof which authorizes the contract or transaction, or solely
because his or their votes are counted for such purpose, if;
(1) The material facts as to his relationship or interest and
as to the contract or transaction are disclosed or are known
to the Board of Directors or the committee, and the board or
committee in good faith authorizes the contract or transaction
by the affirmative votes of a majority of the disinterested
directors, even though the disinterested directors be less
than a quorum; or
(2) The material facts as to his relationship interest and as
to the contract or transaction are disclosed or are known to
the shareholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of
the shareholders; or
(3) The contract or transaction is fair as to the corporation
as of the time it is authorized, approved or ratified, by the
Board of Directors, a committee thereof, or the shareholders.
Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or of a committee
which authorizes the contract or transaction.
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ARTICLE X
AMENDMENTS
SECTION 1. These By-Laws may be altered, amended or repealed or new
By-Laws may be adopted by the shareholders or by the Board of Directors, when
such power is conferred upon the Board of Directors by the Articles of
Incorporation, at any regular meeting of the shareholders or of the Board of
Directors or at any special meeting of the shareholders or of the Board of
Directors if notice of such alteration, amendment, repeal or adoption of new
By-Laws be contained in the notice of such special meeting.
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RESTATED
CERTIFICATE OF INCORPORATION
OF
UNIVERSAL TOOL & STAMPING COMPANY, INC.
FIRST:
The name of the Corporation is Universal Tool & Stamping Company, Inc.,
organized on January 25, 1946.
SECOND:
The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the Indiana Business
Corporation Law.
THIRD:
The period during which the Corporation is to continue is perpetual.
FOURTH:
The address of its principal office is P.O. Box 100, Butler, IN 46721.
The name of its resident agent is C T CORPORATION SYSTEM
The address of the Corporation's registered office in the State of
Indiana is One North Capitol Avenue, Indianapolis, Indiana 46204 (County of
Marion).
FIFTH:
The aggregate number of shares which the Corporation is authorized to
issue is 40,000 shares consisting of Common Stock having a par value of $5.00
per share.
SIXTH:
The amount of paid in capital is $105,000.00.
SEVENTH:
The Board of Directors shall consist of not fewer than three nor more
than seven directors, the exact number of directors to be determined from
time to time by resolution adopted by the affirmative vote of a majority of
the entire Board of Directors.
EIGHTH:
By resolution of the Corporation's Board of Directors dated June 5, 1986
to be effective June 15, 1986, the Corporation elected to be governed by the
provisions of the Indiana Business Corporation Law prior to August 1, 1987
and was certified to be in compliance with the requirements of I.C.
23-1-17-3(b) and I.C. 23-1-18-1 by the Secretary of State of Indiana on June
9, 1986.
<PAGE>
IN WITNESS WHEREOF, the undersigned officers execute these Restated
Articles of Incorporation of the Corporation and certify to the truth of the
facts herein stated, this 15th day of May, 1987.
/s/ Edward P. Weber, Jr. /s/ Brian W. H. Marsden
- --------------------------------- ------------------------------------
Edward P. Weber, Jr. Brian W. H. Marsden
Secretary Chairman and Chief Executive Officer
STATE OF ILLINOIS)
) ss:
COUNTY OF COOK )
I, the undersigned, a Notary Public duly commissioned to take
acknowledgements and administer oaths in the State of Illinois, certify that
Brian W. H. Marsden, the Chairman and Chief Executive Officer and Edward P.
Weber, Jr., Secretary, the officers executing the foregoing Restated Articles
of Incorporation, personally appeared before me, acknowledged the execution
thereof; and swore or attested to the truth of the facts herein stated.
Witness my hand and Notarial Seal this 15th day of May, 1987.
/s/ Roberta A. Glab
---------------------------
ROBERTA A. GLAB
Notary Public
My Commission Expires: My County of Residence is Will
- -------------------------------
OFFICIAL SEAL
ROBERTA A. GLAB
NOTARY PUBLIC STATE OF ILLINOIS
MY COMMISSION EXP. MAR. 2, 1991
- -------------------------------
-2-
<PAGE>
UNIVERSAL TOOL & STAMPING COMPANY, INC.
Incorporated Under the Laws of the State of Indiana
BY-LAWS
As Amended Through May 20, 1999
ARTICLE I
OFFICES
Section 1. Principal Office. The Corporation shall continuously
maintain in the State of Indiana a principal office and shall designate a
resident agent in the State.
Section 2. Other Offices. The Corporation may also have offices at such
other places both within and without the State of Indiana as the Board of
Directors may from time to time determine or the business of the Corporation may
require.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 1. Place of Meetings. All meetings of the shareholders for
the election of directors and for any other purposes shall be held at the
principal office of the Corporation or at such other place either within or
without the State of Indiana as may be authorized by the Board of Directors
and stated in the notice of the meeting.
Section 2. Annual Meeting. An annual meeting of the shareholders of the
Corporation shall be held on the fourth Thursday of April of each year if not a
legal holiday, and, if a legal holiday, then on the next succeeding business day
at 10 o'clock A.M., or on such other date and at such other time as shall be
fixed by the Board of Directors, when the shareholders shall elect a Board of
Directors and transact such other business as may properly came before the
meeting.
Section 3. Special Meetings. Special meetings of the shareholders, for
any purpose or purposes prescribed in the notice of the meeting, may be called
by the Board of Director the Chairman and Chief Executive Officer, the Secretary
or by the holders of not less than one-forth of all the outstanding shares of
the Corporation entitled by the Articles of Incorporation to vote an the
business proposed to be transacted thereat, and shall be held at such place, an
such date, and at such time as they or he shall fix.
Section 4. Notice. Written notice of every meeting of shareholders,
stating the place date, and hour where it is to be held, and, in case of a
special meeting, the purpose or purposes for which it is called, shall be
delivered either personally or by mail, postage prepaid, by the Secretary
<PAGE>
or the officer or persons calling the meeting, to each shareholder of the
Corporation entitled to vote at such meeting not less than ten nor move than
sixty days before the date fixed for such meeting, except as otherwise
provided herein or required by law (meaning herein, as required from time to
time by the Indiana Business Corporation Law from time to time in effect or
the Articles of Incorporation). If Mailed such notice shall be deemed to have
been given when deposited in the United States mail with postage prepaid,
addressed to each shareholder at his address as it appears on the books of
the Corporation. When a meeting is adjourned to another place, date, or time,
written notice need, not be given of the adjourned meeting if the Place,
date, and time thereof are announced at the meeting 'at which the adjournment
is taken. At any adjourned meeting, any business may be transacted which
might have been transacted at the original meeting.
Section 5. Voting Lists. The officer or agent having charge of the
stock ledger of the Corporation shall make at least rive days before each
meeting of shareholders a complete list of the shareholders entitled to vote at
such meeting or any adjournment thereof, arranged in alphabetical order with the
address of and the number of shares registered in the name of each which list
shall be open to the examination of any such shareholder, for any purpose
germane to the meeting, during ordinary business hours for a period of at least
five days prior to the meeting, either at a place where the meeting is to be
held, which place shall be specified in the Notice of Meeting, or if not so
specified, at the place where the meeting is to be held. The stock list shall
also be kept at the place of the meeting during the whole time thereof and shall
be open to the examination of any such shareholder who is present. This list
shall presumptively determine the identity of the shareholders entitled to vote
at the meeting and the number of shares held by each or them.
Section 6. Fixing Record Date. For the purpose of determining
shareholders entitled to receive payment of any dividend or in order to make a
determination of shareholders for any other proper purpose, the Board of
Directors may fix in advance a record date for such purpose, such date in any
case not to be more than seventy days prior to the date on which the action
requiring such determination of shareholders is to be taken. If no record date
is fixed for the determination of shareholders entitled to receive payment of a,
dividend, the end of the day on which the resolution of the Board of Directors
declaring such dividend is adopted shall be the record date for such
determination.
Section 7. Quorum. At all meetings of shareholders, in order to
constitute a Quorum for the transaction of business, there shall be present in
person or represented by proxy holders of record of a majority of the shares of
the class or classes of the capital stock or the Corporation entitled to vote at
such meeting, except that as to any action to be taken by shareholders voting
separately as a class or classes, the holders of a majority of the shares
entitled to vote separately as one class shall constitute a quorum of that class
and may act separately with respect to such action whether or not a quorum of
another class or classes be present, unless a larger number may be required by
law. At any 'meeting of shareholders, if less than a quorum be present, the
holders of record of a majority of the shares present and entitled to vote may
adjourn the meeting from time to time until a quorum shall be present. The
shareholders present at a duly organized meeting may continue to transact
business until adjournment, notwithstanding the withdrawal of enough
shareholders -to leave less
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than a quorum.
Section 8. Vote Required. All elections shall be determined by a
plurality of the votes cast, and except as otherwise required by law or the
Corporation's Articles of Incorporation, all other matters shall be
determined by a majority of the votes cast.
Section 9. Voting of Shares; Proxies. Except as otherwise provided by
law, each shareholder of record having the right to vote shall be entitled at
every meeting Of the shareholders of the Corporation to one vote for each share
of stock having voting power standing in the name of such shareholder on the
books of the Corporation and such votes may be cast either in person or by
written proxy. Every proxy must be executed in writing by the shareholder or by
his duly authorized attorney. Such proxy shall be filed with the Secretary of
the Corporation or other officer or authorized agent to tabulate votes before or
at the time of the meeting. All voting. except on the election of directors and
where otherwise required by law, may be by a voice vote; provided, however, that
upon demand therefor by a shareholder entitled to vote or his proxy, a stock
vote shall be taken. Every stock vote shall be taken by ballots, each of which
shall state the name of the shareholder or proxy voting and such other
information as may be required under the procedure established for the meeting.
Every vote taken by ballots shall be counted by an inspector or inspectors
appointed by the chairman of the meeting.
Section 10. Waiver of Notice. Except as otherwise required by law, any
shareholder may at any time waive any or all notice to him of any meeting of
shareholder by delivering to the Corporation a writing to that effect signed by
him either before or after such meeting, and the presence of any shareholder in
person or by proxy at any meeting of shareholders shall constitute waiver by him
of notice of such meeting, except when the person attends a meeting for the
express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting-is not lawfully called or
convened.
Section 11. Informal Action By Shareholders. Any action required to be
taken it a meeting of the shareholders of the Corporation, or any action which
may be taken at a meeting of the shareholders, may be taken without a meeting
if, prior to such action, a consent in writing, setting forth the action so
taken, shall be signed by all of the shareholders entitled to vote with respect
to the subject matter thereof, and such written consent is filed with the
minutes of the proceedings of the shareholders. Such consent shall have the same
effect as a unanimous vote of shareholders, and may be stated as such in any
articles or document filed with the Secretary of State.
ARTICLE III
DIRECTORS
Section 1. General Powers. The business and affairs of the
Corporation shall be managed by its Board of Directors which may exercise all
the powers of the Corporation and do all such lawful acts and things as arc
not by law or by these By-Laws required to be exercised or done
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by the shareholders.
Section 2. Number and Term of Office. The number of directors shall be
fixed from time to time by the Board of Directors, but shall not be less than
two nor more than seven. Each director shall hold office until the next annual
meeting of shareholders and until his successor is elected and qualified, or
until his earlier resignation, death or removal from office.
Section 3. Vacancies. Any director may resign his office at any time by
delivering his resignation in Writing to the Corporation, and the acceptance of
such resignation, unless required by the terms thereof, shall not be necessary
to make such resignation effective. Any vacancy occurring in the Board of
Directors, caused by death, resignation, increase in number of directors, or
otherwise, shall be filled by a majority vote of the remaining members of the
Board, and such directors so elected shall hold office for the unexpired portion
of the term of the director whose place is filled and/or until the next annual
meeting of the shareholders.
Section 4. Rules. The Board of Directors may adopt such special
rules and regulations for the conduct of their meetings and the management of
the affairs of the Corporation as they may deem proper, not inconsistent with
law or these By-Laws.
Section 5. Place of Meetings. The directors may hold their meetings
at the general office of the Corporation or at such other places as may be
stated in the notice of such meeting.
Section 6. Regular Meetings. Regular meetings of the Board of
Directors may be held without notice at such date, time and place as shall
from time to time be determined by resolution of the Board of Directors.
Section 7. Special Meetings. Special meetings of the Board of
Directors may be called at any time for any purpose by the Chairman and Chief
Executive Officer or the President, and shall be called by the Secretary when
and as he shall be so requested in writing by the Chairman of the Board, the
President or any three directors.
Section 8. Notice of Special Meetings. Notice of every special meeting
of the Board of Directors stating the date, time and place of such meeting shall
be delivered at least two full days prior to the meeting, as hereinafter set
forth, to each director at his business address or such other address as he
shall have previously specified in writing directed to the Secretary. Such
notice shall be deemed to be given when deposited in the United States mail duly
addressed with postage thereon prepaid. Notice, if by telegram. cable, telex or
similar communication, shall be deemed to be given when delivered to the
telegraph or cable company or, in the case of a telex or similar communication
when transmitted. Notice may also be given in person or by telephone. Neither
the business to be transacted at, nor the purpose of, any regular or special
meeting of the Board of Directors need be specified in the notice or waiver of
notice of such meeting.
Section 9. Quorum. At all meetings of the Board of Directors a
majority of the entire
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Board in office shall constitute a Quorum and be sufficient for the
transaction of business, and any act of a majority of the directors present
at a meeting at which there is a Quorum shall be the act or the Board or
Directors, except as may be otherwise specifically provided by law or by
these By-Laws. If a quorum shall not be present at any meeting of directors,
a majority of the directors present thereat may adjourn the meeting from time
to time without notice other than announcement at the meeting of the time and
place of such adjourned meeting.
Section 10. Committees The Board of Directors by resolution adopted by
a majority of the entire Board in office may designate from among its members an
Executive Committee and other committees, each consisting of three or more
directors. Each such committee shall serve at the pleasure of the Board of
Directors.
Section 11. Compensation. The compensation of directors shall be set
from time to time by resolution of the Board of Directors. Directors who are
officers or employees of the Corporation shall receive no compensation for their
duties as directors. Directors shall be reimbursed for expenses incurred in
connection with their attendance at meetings of the Board or Directors or any
committees thereof.
Section 12. Waiver of Notice. Except as otherwise required by law, any
director may at any time waive any or all notice to him of any meeting of the
Board of Directors or the Executive Committee by delivering to the Corporation a
writing to that effect signed by him either before or after such meeting, and
the presence of any director at any meeting of the Board of Directors or the
Executive Committee shall constitute a waiver by him of notice or such meeting
ir such director does not protest, prior to the meeting or at its commencement,
the lack of notice.
Section 13. Informal Action By Director. Unless specifically prohibited
by the Articles of Incorporation. any action required to be taken at a meeting
of the Board of Directors of the Corporation. or any other action which may be
taken at a meeting of the Board of Directors or a committee thereof, may be
taken without a meeting if prior to such action a written consent to such action
is signed by all of the directors entitled to vote with respect to the subject
matter thereof, or by all the members of such committee, as the case may be, and
such written consent is filed with the minutes of proceedings of the Board of
Directors or committee.
Section 14. Participation in Meetings by Conference. Telephone Members
of the Board of Directors, or of any committee thereof, may participate in a
meeting of such Board or committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other and such participation shall constitute presence in
person at such meeting.
Section 15. Amendment or Repeat of By-Laws. Except as otherwise
provided by law the By-Laws may be amended or revealed by the affirmative
vote of a majority of the Board of Directors in office at any meeting of the
Board of Directors.
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Section 16. Removal of Directors. One or more of the directors may be
removed, with or without cause, at a meeting of shareholders by the affirmative
vote of the holders of a majority of the outstanding shares then entitled to
vote at in election of directors.
Section 17. Resignation of Directors. A director may resign at any time
by giving written notice to the Board of Directors, the Chairman and Chief
Executive Officer or to the Secretary of the Corporation. A resignation is
effective when the notice is given unless the notice specifies a future date.
The pending vacancy may be filled before the effective date, but the successor
shall not take office until the effective date.
ARTICLE IV
EXECUTIVE COMMITTEE
Section 1. Appointment. The Executive Committee shall consist of the
Chairman and Chief Executive Officer, the Vice Chairman, the President and one
other member of the Board or Directors or, if the offices of Chairman of the
Board of Directors and President are held by one individual, the Executive
Committee shall consist of such individual, the Vice Chairman and two other
members of the Board of Directors. Vacancies in the Executive Committee may be
filled at any meeting of the Board of Directors. All dir ectors who are not
members of the Executive Committee shall be alternate members of the Executive
Committee. Alternate members of the Executive Committee may from time to time be
designated by the Chairman and Chief Executive Officer to take the place of any
absent member or members at any meeting of the Executive Committee, and any
alternate member of the Executive Committee when so designated shall be deemed a
member of the Executive Committee at such meeting.
Section 2. Powers. The Executive Committee shall have and may exercise
all the powers of the Board of Directors with reference to the conduct of the
business and affairs of the Corporation in the interim between meetings of the
Board of Directors including, but not limited to, the authority to issue and
sell or approve any contract to issue and sell, securities or shares of the
Corporation or designate the terms of a series of a class of securities or
shares. However, no committee has the authority to: (1) authorize distributions;
(2) approve or propose to shareholders any action required by, law to be
approved by shareholders; (3) fill vacancies on the Board of Directors or on any
of its committees; (4) amend the Articles of Incorporation, (5) adopt, amend or
repeal By-Laws, (6) approve a plan of merger not requiring shareholder approval;
or (7) amend or repeal any resolution of the Board of Directors which by its
terms may not be so amended or repealed. The minutes of each meeting of the
Executive Committee shall be presented for approval at the next succeeding
meeting of the Board of Directors.
Section 3. Place of Meetings. Meetings of the Executive Committee
may be held at the general office of the Corporation or at such other places
as may be stated in the notice of the meeting, and may be called by the
Chairman and Chief Executive Officer or by any other member of the Executive
Committee.
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Section 4. Quorum. At any meeting of the Executive Committee, two
members or designated alternate members shall constitute a quorum for the
transaction of business. Any action of the Executive Committee to be effective
must be authorized by the affirmative vote of a majority of the members or
designated alternate members present, and in any event shall require not less
than two affirmative votes.
Section 5. Notice. Notice of every meeting of the Executive Committee
stating the date, time and place of such' meeting shall be delivered at least
two full days prior to the meeting to each member of the Executive Committee and
to each alternate member of the Executive Committee who may be designated to
take the place of any absent member at any meeting of the Executive Committee.
Notice shall be given to each such person in the manner hereinafter set forth at
his business address or such other address as he shall have previously specified
in writing directed to the Secretary, Notice, if by mail, shall be deemed to be
given when deposited in the United States mail duly addressed with postage
thereon prepaid. Notice, if by telegram, cable, telex or similar communication,
shall be deemed to be given when delivered to the telegraph or cable company or,
in the case of a telex or similar communication, when transmitted. Neither the
business to be transacted at, nor the purpose of, any meeting of the Executive
Committee need be specified in the notice or waiver of notice of such meeting.
ARTICLE V
OFFICERS
Section 1. Number The officers of the Corporation shall be a Chairman
and Chief Executive Officer, a Vice Chairman, a President, one or more Vice
Presidents (the number thereof to be determined by the Board of Directors), a
Secretary, a Treasurer, a Controller and such assistants thereto as shall be
determined by the Board of Directors. Any two of the aforesaid offices except
those of Chairman and Chief Executive Officer and-Secretary may be held by the
same person.
Section 2. Election. The Board of Directors, immediately after each
annual meeting of shareholders, shall, by majority vote, elect the officers of
the Corporation. The Board of Directors may also elect or appoint such other
officers, agents and employees as it shall deem necessary who shall have such
authority and shall perform such duties as from time to time shall be prescribed
by the Board of Directors or the Executive Committee.
Section 3. Term of Office. The officers of the Corporation shall hold
office for a term of one year and until their successors are chosen and qualify
in their stead. Any officer elected or appointed by the Board of Directors may
be removed at any time by the affirmative vote of a majority of the directors.
If the office of any officer becomes vacant for any reason, the vacancy may be
filled by the Board of Directors f or the unexpired portion of the term.
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<PAGE>
Section 4. Chairman and Chief Executive Officer. The Chairman of the
Board shall be the Chief Executive Officer of the Corporation. He shall
preside at all meetings of the shareholders and the Board of Directors and
shall have such other duties as may be prescribed from time to time, by the
Board of Directors or the Executive Committee. The Chairman and Chief
Executive Officer need not be an employee of the Corporation. He shall have
charge of the business and operations of the Corporation, subject to the
control of the Board of Directors; shall in general supervise and see that
all orders and resolutions of the Board of Directors and of the Executive
Committee are carried into effect; shall do and perform all acts and things
incident to the position of Chairman and Chief Executive Officer; and, shall
have such other duties as may be prescribed from time to time by the Board of
Directors or the Executive Committee. He shall preside as Chairman at all
meetings of the Executive Committee.
Section 5. Execution of Documents. The Chairman and Chief Executive
Officer shall have, and is hereby given, full power and authority to execute
all duly authorized contracts, agreements, deeds, conveyances or other
obligations of the Corporation, applications, consents proxies and other
powers of attorney, and other documents and instruments, including those
requiring a seal under the seal of the Corporation, except where required or
permitted by law to be otherwise executed and except where the execution
thereof shall be expressly delegated by the Board of Directors to some other
officer or agent of the Corporation. In addition, the Chairman and Chief
Executive Officer may delegate to other officers, employees and agents of the
Corporation the power and authority to execute, on behalf of the Corporation,
duly authorized contracts, agreements, deeds, conveyances, or other
obligations of the Corporation, applications, consents, proxies and other
powers of attorney, and other documents and instruments, with such
limitations as the Chairman and Chief Executive Officer may specify; such
authority so delegated by the Chairman and Chief Executive Officer shall not
be redelegated by the person to whom such execution authority has been
delegated.
Section 6. Vice Chairman. The Vice Chairman shall, under the
direction of the Board of Directors and the supervision of the Chairman and
Chief Executive Officer, assist the Chairman and Chief Executive Officer in
the performance of his responsibilities and shall perform such other
functions as may be assigned to him from time to time by the Board of
Directors, the Executive Committee or the Chairman and Chief Executive
Officer. In the absence, death, or inability to act of the Chairman and Chief
Executive Officer, the Vice Chairman shall, in addition to his other powers
and duties, have and exercise all Powers and duties of the Chairman and Chief
Executive Officer, however, the Vice Chairman shall not preside at a meeting
of the shareholders or of the board of Directors or Executive Committee
unless he is a director of the Corporation.
Section 7. President. The President shall be the Chief Operating
Officer of the Corporation and, under the direction of the Board of Directors
and supervision of the Chairman and chief Executive officer, shall direct and be
responsible-for operations of the Corporation's business and such other
functions as may be assigned to him from time to time by the Board of Directors,
the Executive Committee, the Chairman and Chief Executive officer or the Vice
Chairman. In the absence, death or inability to act of the Vice Chairman, the
President shall, in addition to his other
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powers and duties, have and exercise all powers and duties of the Vice
Chairman.
Section 8. The Vice Presidents. Vice President, in the order determined
by the Board of Directors 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 and have such other powers as the Board of Directors may from
time to time prescribe, except that no Vice President shall have the power and
authority to delegate execution authority reserved to the Chairman and Chief
Executive Officer under Section 5 of this Article V.
Section 9. Vice President-Finance. The Vice President-Finance shall be
the chief financial and administrative officer of the Corporation. He shall be
in charge of the financial affairs of the Corporation under the direction of the
Board of Directors and the supervision of the President. He shall supervise the
activities of the Treasurer and the Controller and shall report periodically to
the Board of Directors or the Executive Committee concerning the financial
condition of the Corporation and shall perform such other duties as shall be
ordered by the Board of Directors, the Executive Committee, the Chairman and
Chief Executive Officer, the Vice Chairman, or the President.
Section 10. Secretary. The Secretary shall attend all meetings of
the Board of Directors, the Executive Committee, and of the shareholders, and
record all the proceedings of the meetings of the Board of Directors, the
Executive Committee and of the shareholders in books to be kept for that
purpose and shall perform like duties for other committees of the Board of
Directors when required. He shall give, or cause to be given, notice of all
meetings of the shareholders and special meetings of the Board of Directors
and shall perform such other duties as may be prescribed by the Board of
Directors or the Chairman and Chief Executive Officer or the President. He
shall have custody of the corporate seal of the Corporation and he or any
Assistant Secretary shall have the authority to affix the same to any
instrument requiring it and, when so affixed, it may be attested by his
signature or by the signature of such Assistant Secretary. The Board of
Directors may give general authority to any other officer to affix the sell
of the Corporation and to attest the affixing by his signature.
Section 11. The Treasurer. Under the supervision of the Vice
President-Finance, the Treasurer shall have the custody of the Corporate funds
and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to 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 way be designated by the Board of Directors. He shall
disburse the funds of the Corporation as may be ordered by the Board of
Directors, taking proper vouchers for such disbursements, and shall render to
the Vice President-Finance, an account of all his transactions as Treasurer and
of the financial condition of the Corporation. In addition, he shall perforim
such other acts as are usually performed by the Treasurer of a corporation or
assigned to him by the Board of Directors, the Executive Committee, the Chairman
and Chief Executive Officer, the Vice Chairman, the President or the Vice
President- Finance.
Section 12. Controller. Under the supervision of the Vice
PrC3ident-Finance, the
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Controller shall be the chief accounting officer of the Corporation. He
shall, when proper, approve all bills for purchases, payrolls, and similar
instruments providing for disbursement of money by the Corporation for
payment by the Treasurer. He shall be in charge of and maintain books of
account and accounting records of the Corporation and shall render to the
Vice President-Finance an account of all his transactions as Controller. In
addition, he shall perform such other acts as are usually performed by the
Controller of a corporation or assigned to him by the Board of Directors, the
Executive Committee, the Chairman and Chief Executive Officer, the Vice
Chairman, the President or the Vice President-Finance.
Section 13. Assistant Secretaries and Assistant Treasurers. The
Assistant Secretary and the Assistant Treasurer, or, if there shall be more than
one, the Assistant Secretaries and Assistant Treasurers in the order determined
by the Board of Directors, shall, in the absence or disability of the Secretary
or Treasurer as the case may be, perform the duties and exercise the powers of
the Secretary or Treasurer as the case way be shall perform such other duties
and have such other powers as the Board of Directors may from time to time
prescribe.
ARTICLE VI
INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHER
Section 1. The Corporation may 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 (other than in action or suit by or in the right of the
Corporation) or proceeding, whether civil, criminal, administrative or
investigative in nature, by reason of the fact that he or she 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, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement, actually and reasonably incurred by such person in connection
with such action, suit or proceeding, if such person acted in good faith and in
a manner he or she reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, 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 he or she reasonably believed to be in or not opposed to the best
interests of the Corporation, or, with respect to any criminal action or
proceeding that the person had reasonable cause to believe that hit or her
conduct was unlawful.
Section 2. The Corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by of in the right of the Corporation to procure a
judgment in its favor by reason of the fact that such person 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, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably
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incurred by such person in connection with the defense or settlement of such
action or suit if such person acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
Corporation, provided that no indemnification shall be made in respect of any
claim, issue or matter as to which such Person shall have been finally
adjudged to be liable for negligence or misconduct in the Performance of his
or her duty to the Corporation unless and only to the extent that the court
in which the action or suit was brought shall determine 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 indemnify for
such expenses which such court shall deem proper. Notwithstanding the
foregoing, the Corporation shall not be required to indemnify any such person
in connection with & proceeding voluntarily initiated by such person unless
the proceeding was authorized by a majority of the entire Board of Directors.
Section 3. To the extent that a present or former director, officer,
employee or agent of the Corporation has been successful on the merits or
otherwise in defense of any actual action, suit or proceeding referred to in
Sections 1 and 2 of this Article VI or in defense of any claim or issue or
matter therein, such person shall be indemnified against that portion of his
expenses (including attorneys' fees) actually and reasonably incurred by such
person in connection with such claim, issue or matter.
Section 4. Any indemnification under Sections I and 2 of this
Article VI (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 director, officer, employee or agent is proper in the circumstances
because he or she has met the applicable standard of conduct set forth in
Sections I and 2 of this Article VI and upon receipt of his or her written
affirmation of good faith belief that he or she has met such standard of
conduct Such determination shall be made (a) by the Board of Directors by a
majority vote of a disinterested quorum or (b) if such a quorum is not
obtainable, or even where such a, quorum is obtainable, if that quorum so
directs by the written opinion of independent legal counsel selected by the
Board of Directors in good faith, or (c) by the shareholders.
Section 5. Expenses incurred in defending a civil or criminal action or
suit, or in the course, of a proceeding may be paid by the Corporation in
advance of the final disposition of such action, suit or proceeding as
authorized in the manner provided in Section 4 of this Article VI, upon receipt
of an undertaking by or on behalf of the director, officer, employee or agent to
repay such amount unless it shall be ultimately determined t at he or she is
entitled to be indemnified by the Corporation as now or hereafter authorized by
law and this Article VI.
Section 6. The indemnification provided by this Article shall not be
deemed exclusive of any other rights to which a person may be entitled under any
By-Law, agreement, vote of shareholders or disinterested directors or otherwise,
both as to action in his official capacity and as to action in another capacity
while holding such office; shall continue its to a person who has ceased to be a
director, officer, employee or agent of the Corporation; and shall inure to the
benefit of the heirs, executors and administrators of such a person.
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Section 7. 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, of is of was serving at the request of the Corporation as a
director, officer, employee of agent of another corporation, partnership,
joint venture, trust of other enterprise, against any liability asserted
against such person incurred by such person in any such capacity, or arising
out of his or her status as such, whether or not the Corporation would have
the power to indemnify such person against liability under the provisions of
this Article.
Section 8. It a corporation has paid indemnity or has advance expenses
to a director, officer, employee or agent, the Corporation shall report the
indemnification or advance in writing to the shareholders -with or before the
notice of the next shareholders meeting.
Section 9. For purposes of this Article VI, references to "the
Corporation" shall include, in addition to the surviving Corporation, any
merging Corporation (including any Corporation having merged with a merging
Corporation) absorbed in a merger which, if its separate existence had
continued, would have had the power and authority to indemnify its directors,
officers, employees or agents, so that any person who is or was a director,
officer, employee or agent of such merging Corporation, or is or was serving at
the request of such merging Corporation as a director, officer, employee or
agent of another corporation, partnership, venture, trust or other enterprise,
shall stand in the same position under the provisions of this Article VI with
respect to the surviving Corporation as such person would have with respect to
such merging Corporation if its separate existence had continued.
Section 10. For purposes of this Article VI references to "other
enterprises" shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on a person with respect to an employee
benefit plan; and references to "serving at the request of the Corporation"
shall include any service as director, officer, employee or agent of the
Corporation which imposes duties on, or involves services by such director,
officer, employee, or agent with respect to an employee benefit plan, its
participations, or beneficiaries. A person who acted in good faith and in a
manner he or she reasonably believed to be in the best interests of the
participants and beneficiaries of an employee benefit plan shall be deemed to
have acted in a manner "not opposed to the best interest of the Corporation" as
referred to in this Article.
ARTICLE VII
CAPITAL STOCK
Section 1. Stock Certificates. Certificates representing shares of
stock of the Corporation shall be in such form as shall be determined by the
Board of Directors and as required by law. They shall be numbered and entered
in the books of the Corporation as they are issued, shall exhibit the
holder's name and the number of shares and shall be signed by the Chairman
and Chief Executive Officer or the President and the Secretary or an
Assistant Secretary or the Treasurer or an Assistant
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<PAGE>
Treasurer of the Corporation and shall bear the corporate seal. Where any
such certificate is countersigned by a transfer agent or a register other
than the Corporation or its employee, the signatures of any such officers and
the seal of the Corporation upon such certificates may be facsimiles,
engraved or printed.
Section 2. Lost, Stolen or Destroyed Certificates. The Board of
Directors may direct a new certificate or certificates to be issued in place of
any certificate or certificates theretofore issued by the Corporation alleged to
have been lost, stolen or destroyed upon the making of an affidavit of that fact
by the person claiming the certificate of stock to be lost, stolen or destroyed.
When authorizing such issue of a new certificate or certificates the Board of
Directors may in its discretion and as a condition precedent to the issuance
thereof require the owner of such lost, stolen or destroyed certificate or
certificates, or his legal representative, to give the Corporation a bond in
such sum and with such surety or sureties as it may direct as indemnity against
any claims that may be made against the Corporation with respect to the
certificate alleged to have been lost, stolen or destroyed. Worn, defaced and
mutilated certificates of stock may be surrendered and canceled and a new
certificate in lieu of the same may be issued
Section 3. Transfer Agents and Registrars. Whenever the Board of
Directors shall so determine, it shall appoint one or more transfer agents and
one or more registrars. Upon surrender to the Corporation or to a transfer agent
of the Corporation of a certificate of stock duly endorsed or accompanied by
proper evidence of succession, assignment of authority to transfer, it shall be
the duty of the Corporation to issue a new certificate and every such transfer
of stock shall be entered on the stock books of the Corporation. The stock books
of the Corporation shall contain the names and addresses of all shareholders of
the Corporation shall contain the names and addresses of all shareholders of the
Corporation shall contain the names and address of all shareholders of the
Corporation, the number and class of shares held by each and the dates when they
respectively became the owners of record thereof.
Section 4. Holder of Record. The Corporation shall be entitled to treat
the holder of record of any share or shares as the holder in fact thereof and,
accordingly, shall not be found to recognize any equitable or other claim to or
interest in such share on the part Of any other person whether or not it shall
have express or other notice thereof, except as expressly provided by law.
ARTICLE VIII
GENERAL PROVISIONS
Section 1. Fixing of Record Date For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or shareholders entitled to receive payment of any
dividend or to receive any other distribution, or for the allotment of any
rights, or for the delivery of evidence of rights or evidences of interests out
of any change, conversion or exchange of capital stock, or for the purpose of
any other lawful action, the Board of Directors may fix in advance a date as the
record date for any such determination of shareholders,
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<PAGE>
such date in any case to be not more than seventy days and, in case of a
meeting of shareholders, not less than ten days prior to the date of such
meeting. If no record date is fixed, the record date for determining
shareholders (i) entitled to notice of or to vote at a meeting of
shareholders shall be at the close of business on the day next preceding the
day on which notice is given, or, if notice is waived, at the close of
business on the day next preceding the day on which the meeting is held; (ii)
entitled to express consent to the corporate action in writing without a
meeting when no prior action by the Board of Directors is necessary, if such
action by written consent is permitted by the Corporation's Articles of
Incorporation, shall be the day on which the first written consent is
expressed; and (iii) for ally other purpose shall be at the close of business
on the day on which the Board of Directors adopts the resolution relating
thereto. When a determination of shareholders entitled to vote at any meeting
of shareholders has been made as provided in this section, such determination
shall apply to any adjournment thereof.
Section 2. Dividends. The Board of Directors may from time to time declare
and the Corporation may pay dividends upon its outstanding shares of capital
stock, in the manner and upon the terms and conditions provided by law.
Section 3. Corporate Seal. The corporate seal of the Corporation shall
consist of two concentric circles between which shall be the name of the
Corporation and the word "Indiana" and in the center of which shall be the word
"Seal." The seal can be used by causing it or a facsimile thereof, to be
impressed, affixed, or in any other manner reproduced.
Section 4. Checks. Drafts All checks, drafts at other, orders for the
payment of money, notes or other evidence of indebtedness issued in the name of
the Corporation shall be signed by such officer or officers or such other person
or persons as the Board of Directors or the Executive Committee may from time to
time designate.
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<PAGE>
CERTIFICATE OF INCORPORATION
OF
ACCO CONTROLS, INC.
1. The name of the corporation is ACCO Cable Controls, Inc.
2. The address of the corporation's registered office in
Delaware is 15 North Street, Dover (Kent County), Delaware 19901. United
Corporate Services, Inc., is the corporation's registered agent at that address.
3. The purpose of the corporation is to engage in any lawful
act or activity for which corporations may be organized under the Delaware
General Corporation Law.
4. The corporation shall have authority to issue a total of
1000 shares of common stock of the par value of $0.01 per share.
5. The name of the sole incorporator is Brett S. Director and
his mailing address is c/o Kaye, Scholer, Fierman, Hays & Handler, L.L.P., 425
Park Avenue, New York, New York
10022.
6. The Board of Directors shall have the power to make, alter
or repeal the by-laws of the corporation.
7. The election of Board of Directors need not be by written
ballot.
8. The corporation shall indemnify to the fullest extent
permitted by Section 145 of the General Corporation Law of Delaware as amended
from time to time each person who is or was a director or officer of the
corporation and the heirs, executors and administrators of such a person. Any
repeal or modification of this ARTICLE EIGHT shall not adversely affect any
right or protection of the corporation existing at the time of such repeal or
modification.
9. The corporation expressly elects not to be governed by
Section 203 of the General Corporation Law of the State of Delaware.
Dated: November 5, 1997.
-------------------------------
/s/ Brett S. Director
Sole Incorporator
<PAGE>
CERTIFICATE OF AMENDMENT
OF
THE CERTIFICATE OF INCORPORATION
OF
ACCO CABLE CONTROLS, INC.
The undersigned being the Sole Director of the corporation, hereby
certifies as follows:
FIRST: The name of the corporation is ACCO Cable Controls, Inc.
SECOND: The corporation hereby amends its Certificate of Incorporation as
follows:
Paragraph FIRST of the Certificate of Incorporation, relating to the
corporate title of the corporation, is hereby amended to read as
follows:
"1. The name of the corporation is Trident Automotive, Inc."
THIRD: This Certificate of Amendment has been duly adopted in accordance
with the provisions of Section 241 of the General Corporation Law of the State
of Delaware.
FOURTH: The corporation has not received any payment for any of its stock.
IN WITNESS WHEREOF, I hereunto sign my name and affirm that the statements
made herein are true under penalties of perjury, this day of December 8, 1997.
-------------------------------
/s/ Charles W. Moore
Sole Director
<PAGE>
CERTIFICATE OF AMENDMENT
OF
THE CERTIFICATE OF INCORPORATION
OF
TRIDENT AUTOMOTIVE, INC.
Trident Automotive, Inc., a Delaware corporation (the "Corporation"),
hereby certifies as follows:
FIRST: The name of the corporation is Trident Automotive, Inc.
SECOND: The corporation amends its Certificate of Incorporation as follows:
Paragraph FIRST of the Certificate of Incorporation is hereby amended in
its entirety to read as follows:
"1. The name of the corporation is Dura Automotive Systems Cable
Operations, Inc."
THIRD: This Certificate of Amendment has been duly adopted in accordance
with the provisions of Section 242 of the General Corporation Law of the State
of Delaware.
IN WITNESS WHEREOF, Trident Automotive, Inc. has caused this Certificatge
of Amendment to be signed by its duly authorized officer this 27th day of
August, 1998.
TRIDENT AUTOMOTIVE, INC.
By: ----------------------------
/s/ John A. Krsul
Its: Secretary
<PAGE>
Exhibit 3.10
BY-LAWS
OF
TRIDENT AUTOMOTIVE, INC.
1. MEETINGS OF STOCKHOLDERS.
1.1 ANNUAL MEETING. The annual meeting of stockholders shall be held on
the 1st day of November in each year, or as soon thereafter as practicable, and
shall be held at a place and time determined by the board of directors (the
"Board").
1.2 SPECIAL MEETINGS. Special meetings of the stockholders may be called
by resolution of the Board or by the president and shall be called by the
president or secretary upon the written request (stating the purpose or purposes
of the meeting) of a majority of the directors then in office or of the holders
of 50% of the outstanding shares entitled to vote. Only business related to the
purposes set forth in the notice of the meeting may be transacted at a special
meeting.
1.3 PLACE AND TIME OF MEETINGS. Meetings of the stockholders may be held
in or outside Delaware at the place and time specified by the Board or the
directors or stockholders requesting the meeting.
1.4 NOTICE OF MEETINGS: WAIVER OF NOTICE. Written notice of each meeting
of stockholders shall be given to each stockholder entitled to vote at the
meeting, except that (a) it shall not be necessary to give notice to any
stockholder who submits a signed waiver of notice before or after the meeting,
and (b) no notice of an adjourned meeting need be given except when required
under Section 1.5 of these by-laws or by law. Each notice of a meeting shall be
given, personally or by mail, not less than 10 nor more than 60 days before the
meeting and shall state the time and place of the meeting, and unless it is the
annual meeting, shall state at whose direction or request the meeting is called
and the purposes for which it is called. If mailed, notice shall be considered
given when mailed to a stockholder at his address on the corporation's records.
The attendance of any stockholder at a meeting, without protesting at the
beginning of the meeting that the meeting is not lawfully called or convened,
shall constitute a waiver of notice by him.
1.5 QUORUM. At any meeting of stockholders, the presence in person or by
proxy of the holders of a majority of the shares entitled to vote shall
constitute a quorum for the transaction of any business. In the absence of a
quorum a majority in voting interest of those present or, if no stockholders are
present, any officer entitled to preside at or to act as secretary of the
meeting, may adjourn the meeting until a quorum is present. At any adjourned
meeting at
<PAGE>
which a quorum is present any action may be taken which might have been taken at
the meeting as originally called. No notice of an adjourned meeting need be
given if the time and place are announced at the meeting at which the
adjournment is taken except that, if adjournment is for more than thirty days or
if, after the adjournment, a new record date is fixed for the meeting, notice of
the adjourned meeting shall be given pursuant to Section 1.4.
1.6 VOTING; PROXIES: Each stockholder of record shall be entitled to one
vote for every share registered in his name. Corporate action to be taken by
stockholder vote, other than the election of directors, shall be authorized by a
majority of the votes cast at a meeting of stockholders, except as otherwise
provided by law or by Section 1.8 of these by-laws. Directors shall be elected
in the manner provided in Section 2.1 of these by-laws. Voting need not be by
ballot unless requested by a stockholder at the meeting or ordered by the
chairman of the meeting; however, all elections of directors shall be by written
ballot, unless otherwise provided in the certificate of incorporation. Each
stockholder entitled to vote at any meeting of stockholders or to express
consent to or dissent from corporate action in writing without a meeting may
authorize another person to act for him by proxy. Every proxy must be signed by
the stockholder or his attorney-in-fact. No proxy shall be valid after three
years from its date unless it provides otherwise.
1.7 LIST OF STOCKHOLDERS. Not less than 10 days prior to the date of any
meeting of stockholders, the secretary of the corporation shall prepare a
complete list of stockholders entitled to vote at the meeting, arranged in
alphabetical order and showing the address of each stockholder and the number of
shares registered in his name. For a period of not less than 10 days prior to
the meeting, the list shall be available during ordinary business hours for
inspection by any stockholder for any purpose germane to the meeting. During
this period, the list shall be kept either (a) at a place within the city where
the meeting is to be held, if that place shall have been specified in the notice
of the meeting, or (b) if not so specified, at the place where the meeting is to
be held. The list shall also be available for inspection by stockholders at the
time and place of the meeting.
1.8 ACTION BY CONSENT WITHOUT A MEETING. Any action required or permitted
to be taken at any meeting of stockholders may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voting. Prompt notice of the taking of any such action shall
be given to those stockholders who did not consent in writing.
2. BOARD OF DIRECTORS.
2.1 NUMBER, QUALIFICATION, ELECTION AND TERM OF DIRECTORS. The business
of the corporation shall be managed by the Board, which shall consist of not
less than one nor more than seven directors. The number of directors may be
changed by resolution of a majority of the
2
<PAGE>
Board or by the stockholders, but no decrease may shorten the term of any
incumbent director. Directors shall be elected at each annual meeting of
stockholders and shall hold office until the next annual meeting of stockholders
and until the election and qualification of their respective successors, subject
to the provisions of Section 2.9.
2.2 QUORUM AND MANNER OF ACTING. A majority of the directors then in
office shall constitute a quorum for the transaction of business at any meeting,
except as provided in Section 2.10 of these by-laws. Action of the Board shall
be authorized by the vote a majority of the directors present at the time of the
vote if there is a quorum, unless otherwise provided by law or these by-laws.
In the absence of a quorum a majority of the directors present may adjourn any
meeting from time to time until a quorum is present.
2.3 PLACE OF MEETINGS. Meetings of the Board may be held in or outside
Delaware.
2.4 ANNUAL AND REGULAR MEETINGS. Annual meetings of the Board, for the
election of officers and consideration of other matters, shall be held either
(a) without notice immediately after the annual meeting of stockholders and at
the same place, or (b) as soon as practicable after the annual meeting of
stockholders, on notice as provided in Section 2.6 of these by-laws. Regular
meetings of the Board may be held without notice at such times and places as the
Board determines. If the day fixed for a regular meeting is a legal holiday,
the meeting shall be held on the next business day.
2.5 SPECIAL MEETINGS. Special meetings of the Board may be called by the
president or by a majority of the directors. Only business related to the
purposes set forth in the notice of meeting may be transacted at a special
meeting.
2.6 NOTICE OF MEETINGS; WAIVER OF NOTICE. Notice of the time and place of
each special meeting of the Board, and of each annual meeting not held
immediately after the annual meeting of stockholders and at the same place,
shall be given to each director by mailing it to him at his residence or usual
place of business at least three days before the meeting, or by delivering or
telephoning or telegraphing it to him at least two days before the meeting.
Notice of a special meeting shall also state the purpose or purposes for which
the meeting is called. Notice need not be given to any director who submits a
signed waiver of notice before or after the meeting or who attends the meeting
without protesting at the beginning of the meeting the transaction of any
business because the meeting was not lawfully called or convened. Notice of any
adjourned meeting need not be given, other than by announcement at the meeting
at which the adjournment is taken.
2.7 BOARD OR COMMITTEE ACTION WITHOUT A MEETING. Any action required or
permitted to be taken by the Board or by any committee of the Board may be taken
without a meeting if all of the members of the Board or of the committee consent
in writing to the adoption of a resolution authorizing the action. The
resolution and the written consents by the members of the
3
<PAGE>
Board or the committee shall be filed with the minutes of the proceeding of the
Board or of the committee.
2.8 PARTICIPATION IN BOARD OR COMMITTEE MEETINGS BY CONFERENCE TELEPHONE.
Any or all members of the Board or of any committee of the Board may participate
in a meeting of the Board or of the committee by means of a conference telephone
or similar communications equipment allowing all persons participating in the
meeting to hear each other at the same time. Participation by such means shall
constitute presence in person at the meeting.
2.9 RESIGNATION AND REMOVAL OF DIRECTORS. Any director may resign at any
time by delivering his resignation in writing to the president or secretary of
the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any or all of the directors may be removed at
any time, either with or without cause, by vote of the stockholders.
2.10 VACANCIES. Any vacancy in the Board, including one created by an
increase in the number of directors, may be filled for the unexpired term by a
majority vote of the remaining directors, though less than a quorum.
2.11 COMPENSATION. Directors shall receive such compensation as the Board
determines, together with reimbursement of their reasonable expenses in
connection with the performance of their duties. A director may also be paid
for serving the corporation, its affiliates or subsidiaries in other capacities.
3. COMMITTEES.
3.1 EXECUTIVE COMMITTEE. The Board, by resolution adopted by a majority
of the entire Board, may designate an Executive Committee of one or more
directors which shall have all the powers and authority of the Board, except as
otherwise provided in the resolution, section 141(c) of the Delaware General
Corporation Law, or any other applicable law. The members of the Executive
Committee shall serve at the pleasure of the Board. All action of the Executive
Committee shall be reported to the Board at its next meeting.
3.2 OTHER COMMITTEES. The Board, by resolution adopted by a majority of
the entire Board, may designate other committees of directors of one or more
directors, which shall serve at the Board's pleasure and have such powers and
duties as the Board determines.
3.3 RULES APPLICABLE TO COMMITTEES. The Board may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of any member of a committee, the member or members present at
a meeting of the committee and not disqualified, whether or not a quorum, may
unanimously appoint another director to act at the meeting in place of the
absent or disqualified member. All action of a committee shall be reported to
the Board at its
4
<PAGE>
next meeting. Each committee shall adopt rules of procedure and shall meet as
provided by those rules or by resolutions of the Board.
4. OFFICERS.
4.1 NUMBER; SECURITY. The executive officers of the corporation shall be
the president, one or more vice presidents (including an executive vice
president, if the Board so determines), a secretary and a treasurer. Any two or
more offices may be held by the same person. The Board may require any officer,
agent or employee to give security for the faithful performance of his duties.
4.2 ELECTION; TERM OF OFFICE. The executive officers of the corporation
shall be elected annually by the Board, and each such officer shall hold office
until the next annual meeting of the Board and until the election of his
successor, subject to the provisions of Section 4.4.
4.3 SUBORDINATE OFFICERS. The Board may appoint subordinate officers
(including assistant secretaries and assistance treasurers), agents or
employees, each of whom shall hold office for such period and have such powers
and duties as the Board determines. The Board may delegate to any executive
officer or to any committee the power to appoint and define the powers and
duties of any subordinate officers, agents or employees.
4.4 RESIGNATION AND REMOVAL OF OFFICERS. Any officer may resign at any
time by delivering his resignation in writing to the president or secretary of
the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any officer appointed by the Board or
appointed by an executive officer or by a committee may be removed by the
Board either with or without cause, and in the case of an officer appointed
by an executive officer or by a committee, by the officer or committee who
appointed him or by the president.
4.5 VACANCIES. A vacancy in any office may be filled for the unexpired
term in the manner prescribed in Sections 4.2 and 4.3 of these by-laws for
election or appointment to the office.
4.6 THE PRESIDENT. The president shall be the chief executive officer of
the corporation and shall preside at all meetings of the Board and of the
stockholders. Subject to the control of the Board, he shall have general
supervision over the business of the corporation and shall have such other
powers and duties as presidents of corporations usually have or as the Board
assigns to him.
4.7 VICE PRESIDENT. Each vice president shall have such powers and duties
as the Board or the president assigns to him.
5
<PAGE>
4.8 THE TREASURER. The treasurer shall be the chief financial officer of
the corporation and shall be in charge of the corporation's books and accounts.
Subject to the control of the Board, he shall have such other powers and duties
as the Board or the president assigns to him.
4.9 THE SECRETARY. The secretary shall be the secretary of, and keep the
minutes of, all meetings of the Board and of the stockholders, shall be
responsible for giving notice of all meetings of stockholders and of the Board,
and shall keep the seal and, when authorized by the Board, apply it to any
instrument requiring it. Subject to the control of the Board, he shall have
such powers and duties as the Board or the president assigns to him. In the
absence of the secretary from any meeting, the minutes shall be kept by the
person appointed for that purpose by the presiding officer.
4.10 SALARIES. The Board may fix the officers' salaries, if any, or it may
authorize the president to fix the salary of any other officer.
5. SHARES.
5.1 CERTIFICATES. The corporation's shares shall be represented by
certificates in the form approved by the Board. Each certificate shall be
signed by the president or a vice president and by the secretary or an assistant
secretary, or the treasurer or an assistant treasurer, and shall be sealed with
the corporation's seal or a facsimile of the seal. Any or all of the signatures
on the certificate may be a facsimile.
5.2 TRANSFERS. Shares shall be transferable only on the corporation's
books, upon surrender of the certificate for the shares, properly endorsed. The
Board may require satisfactory surety before issuing a new certificate to
replace a certificate claimed to have been lost or destroyed.
5.3 DETERMINATION OF STOCKHOLDERS OF RECORD. The Board may fix, in
advance, a date as the record date for the determination of stockholders
entitled to notice of or to vote at any meeting of the stockholders, or to
express consent to or dissent from any proposal without a meeting, or to receive
payment of any dividend or the allotment of any rights, or for the purpose of
any other action. The record date may not be more than 60 or less than 10 days
before the date of the meeting or more than 60 days before any other action.
6. MISCELLANEOUS
6.1 FISCAL YEAR. The Board may determine the corporation's fiscal year.
Until changed by the Board, the corporation's fiscal year shall be end March 31.
6.2 VOTING OF SHARES IN OTHER CORPORATIONS. Shares in other corporations
which are held by the corporation may be represented and voted by the president
or a vice president of this
6
<PAGE>
corporation or by proxy or proxies appointed by one of them. The Board may,
however, appoint some other person to vote the shares.
6.3 AMENDMENTS. By-laws may be amended, repealed or adopted by the
stockholders.
7
<PAGE>
CERTIFICATE OF INCORPORATION
OF
ADWEST AMERICA, INC
* * *
1. The name of the corporation is ADWEST AMERICA, INC.
2. The address of its registered office in the State of Delaware is
Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle. The name of its registered agent at
such address is The Corporation Trust Company.
3. The nature of the business or purposes to be conducted or promoted is:
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
4. The total number of shares of stock which the corporation shall have
authority to issue is Sixty Thousand; all of such shares shall be
without par value.
5. The name and mailing address of each incorporator is as follows:
K. A. Widdoes 1209 Orange St., Wilmington, De. 19801
6. The corporation is to have perpetual existence.
7. In furtherance and not in limitation of the powers conferred by
statute, the board of directors is expressly authorized:
To make, alter or repeal the bylaws of the corporation.
8. Elections of directors need not be by written ballot unless the bylaws
of the corporation shall so provide.
Meetings of stockholders may be held within or without the State of
Delaware, as the bylaws may provide. The books of the corporation may
be kept (subject to any provision contained in the statutes) outside
the State of Delaware at such place or places as may be designated from
time to time by the board of directors or in the bylaws of the
corporation.
<PAGE>
Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of
equitable jurisdiction within the State of Delaware may, on the
application in a summary way of this corporation or of any creditor or
stockholder thereof or on the application of any receiver or receivers
appointed for this corporation under the provisions of Section 291 of
Title 8 of the Delaware Code or on the application of trustees in
dissolution or of my receiver or receivers appointed for this
corporation under the provisions of Section 279 of Title 8 of the
Delaware Code order a meeting of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of this
corporation. as the case may be, to be summoned in such manner as the
said court directs. If a majority in number representing three-fourths
in value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this corporation, as the case
may be. agree to any compromise or arrangement and to any
reorganization of this corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said
application has been made, be binding on all the creditors or class of
creditors, and/or on all the stockholders or class of stockholders, of
this corporation, as the case may be, and also on this corporation.
9. The corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred
upon stockholders herein are granted subject to this reservation.
10. A director of the corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach
of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii)
under Section 174 of the Delaware General Corporation Law, or (iv) for
any transaction from which the director derived any improper personal
benefit.
WE, THE UNDERSIGNED, being each of the incorporators hereinbefore
named, for the purpose of forming a corporation pursuant to the General
Corporation Law of the State of Delaware. do make this certificate,
hereby declaring and certifying that this is our act and deed and the
facts herein stated are true, and accordingly have hereunto set our
hands this 3rd day of February, 1995.
/s/ K.A. Widdoes
<PAGE>
ADWEST AMERICA, INC.
* * * * *
B Y L A W S
ARTICLE I
OFFICES
Section 1. The registered office shall be in the City of Wilmington,
County of New Castle, State of Delaware.
Section 2. The corporation may also have offices at such other places
both within and without the State of Delaware as the board of directors may from
time to time determine or the business of the corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. All meetings of the stockholders for the election of
directors shall be held in the City of Detroit, State of Michigan, at such place
as may be fixed from time to time by the board of directors, or at such other
place either within or without the State of Delaware as shall be designated from
time to time by the board of directors and stated in the notice of the meeting.
Meetings of stockholders for any other purpose may be held at such time and
place, within or without the State of Delaware, as shall be stated in the notice
of the meeting or in a duly executed waiver of notice thereof.
Section 2. The annual meetings of stockholders, commencing with the
year 1996, shall be held on the second Tuesday in September, if not a legal
holiday, and if a legal holiday, then the next secular day following, at
10:00 A.M., or at such other date and time as shall be designated from time
to time by the Board of Directors and stated in the notice of the meeting, at
which they shall elect by a plurality vote a board of directors, and transact
such other business as may properly be brought before the meeting.
<PAGE>
Section 3. Written notice of the annual meeting stating the place, date
and hour of the meeting shall be given to each stockholder entitled to vote at
such meeting not less than 10 nor more than 60 days before the date of the
meeting.
Section 4. The officer who has charge of the stock ledger of the
corporation shall prepare and make, at least ten days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present.
Section 5. Special meetings of the stockholders, for any purpose or
purposes, unless otherwise prescribed by statute or by the certificate of
incorporation, may be called by the president and shall be called by the
president or secretary at the request in writing of a majority of the board of
directors, or at the request in writing of stockholders owning a majority in
amount Of the entire capital stock of the corporation issued and outstanding and
entitled to vote. Such request shall state the purpose or purposes of the
proposed meeting.
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Section 6. Written notice of a special meeting stating the place, date
and hour of the meeting and the purpose or purposes for which the meeting is
called, shall be given not less than 5 nor more than 10 days before the date of
the meeting, to each stockholder entitled to vote at such meeting.
Section 7. Business transacted at any special meeting of stockholders
shall be limited to the purposes stated in the notice.
Section 8. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
certificate of incorporation. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders entitled to
vote thereat, present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
notified. If the adjournment is for more than thirty days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting.
Section 9. When a quorum is present at any meeting, the vote of the
holders of a majority of the stock having voting power present in person or
represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provision of the statutes or of
the certificate of incorporation, a different vote is required in which case
such express provision shall govern and control the decision of such question.
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Section 10. Unless otherwise provided in the certificate of
incorporation each stockholder shall at every meeting of the stockholders be
entitled to one vote in person or by proxy for each share of the capital stock
having voting power held by such stockholder, but no proxy shall be voted on
after three years from its date, unless the proxy provides for a longer period.
Section 11. Unless otherwise provided in the certificate of
incorporation, any action required to be taken at any annual or special meeting
of stockholders of the corporation, or any action which may be taken at any
annual or special meeting of such stockholders, may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such 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 those
stockholders who have not consented in writing.
ARTICLE III
DIRECTORS
Section 1. The number of directors which shall constitute the whole
board shall be not less than one nor more than five. The first board shall
consist of one director. Thereafter, within the limits above specified, the
number of directors shall be determined by resolution of the board of directors
or by the stockholders at the annual meeting. The directors shall be elected at
the annual meeting of the stockholders, except as provided in Section 2 of this
Article, and each director elected shall hold office until his successor is
elected and qualified. Directors need not be stockholders.
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Section 2. Vacancies and newly created directorships resulting from any
increase in the authorized number of directors may be filled by a majority of
the directors then in office, though less than a quorum, or by a sole remaining
director, and the directors so chosen shall hold office until the next annual
election and until their successors are duly elected and shall qualify, unless
sooner displaced. If there are no directors in office, then an election of
directors may be held in the manner provided by statute. If, at the time of
filling any vacancy or any newly created directorship, the directors then in
office shall constitute less than a majority of the whole board (as constituted
immediately prior to any such increase), the Court of Chancery may, upon
application of any stockholder or stockholders holding at least ten percent of
the total number of the shares at the time outstanding having the right to vote
for such directors, summarily order an election to be held to fill any such
vacancies or newly created directorships, or to replace the directors chosen by
the directors then in office.
Section 3. The business of the corporation shall be managed by or under
the direction of its board of directors which may exercise all such powers of
the corporation and do all such lawful acts and things as are not by statute or
by the certificate of incorporation Or by these bylaws directed or required to
be exercised or done by the stockholders.
MEETINGS OF THE BOARD OF DIRECTORS
Section 4. The board of directors of the corporation may hold meetings,
both regular and special, either within or without the State of Delaware.
Section 5. The first meeting of each newly elected board of directors
shall be held at such time and place as shall be fixed by the vote of the
stockholders at the annual meeting and no notice of such meeting shall be
necessary to the newly elected directors in order legally to constitute the
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meeting, provided a quorum shall be present. In the event of the failure of the
stockholders to fix the time or place of such first meeting of the newly elected
board of directors, or in the event such meeting is not held at the time and
place so fixed by the stockholders, the meeting may be held at such time and
place as shall be specified in a notice given as hereinafter provided for
special meetings of the board of directors, or as shall be specified in a
written waiver signed by all of the directors.
Section 6. Regular meetings of the board of directors may be held
without notice at such time and at such place as shall from time to time be
determined by the board.
Section 7. Special meetings of the board may be called by the president
on five days' notice to each director, either personally or by mail or by
facsimile communication; special meetings shall be called by the president or
secretary in like manner and on like notice on the written request of two
directors unless the board consists of only one director; in which case special
meetings shall be called by the president or secretary in like manner and on
like notice on the written request of the sole director.
Section 8. At all meetings a majority of the board directors shall
constitute a quorum for the transaction of business and the act of a majority of
the directors present at any meeting at which there is a quorum shall be the act
of the board of directors, except as may be otherwise specifically provided by
statute or by the certificate of incorporation. If a quorum shall not be present
at any meeting of the board of directors the directors present thereat may
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present.
Section 9. Unless otherwise restricted by the certificate of
incorporation or these by-laws, any action required or permitted to be taken at
any meeting of the board of directors or of any
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committee thereof may be taken without a meeting, if all members of the board
or committee, as thecase may be, consent thereto in writing, and the writing
or writings are filed with the minutes of proceedings of the board or
committee.
Section 10. Unless otherwise restricted by the certificate of
incorporation or these by-laws, members of the board of directors, or any
committee designated by the board of directors, may participate in a meeting of
the board of directors, or any committee, by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and such participation in a meeting shall
constitute presence in person at the meeting.
COMMITTEES OF DIRECTORS
Section 11. The board of directors may, by resolution passed by a
majority of the whole board designate one or more committees, each committee to
consist of one or more of the directors of the corporation. The board may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee.
Any such committee, to the extent provided in the resolution of the
board of directors, shall have and may exercise all the powers and authority of
the board of directors in the management of the business and affairs of the
corporation, and may authorize the seal of the corporation to may be affixed to
all papers which may require it; but no such committee shall have the power or
authority in reference to amending the certificate of incorporation, (except
that a committee may, to the extent authorized in the resolution or resolutions
providing for the issuance of shares of stock adopted by the board of directors
as provided in Section 151(a) fix any of the preferences of rights of such
shares relating to dividends, redemption, dissolution, any distribution of
assets of the corporation or the
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conversion into, or the exchange of such shares for, shares of any other
class or classes or any otherseries of the same or any other class or classes
of stock of the corporation) adopting an agreement of merger or
consolidation, recommending to the stockholders the same, lease or exchange
of all or substantially all of the corporation's property and assets,
recommending to the stockholders a dissolution of the corporation or a
revocation of a dissolution, or amending the by-laws of the corporation; and,
unless the resolution or the certificate of incorporation expressly so
provide, no such committee shall have the power of authority to declare a
dividend or to authorize the issuance of stock or to adopt a certificate of
ownership and merger. Such committee or committees shall have such name or
names as may be determined from time to time by resolution adopted by the
board of directors.
Section 12. Each committee shall keep regular minutes of its meetings
and report the same to the board of directors when required.
COMPENSATION OF DIRECTORS
Section 13. Unless otherwise restricted by the certificate of
incorporation or these by-laws, the board of directors shall have the authority
to fix the compensation of directors. The directors may be paid their expenses,
if any, of attendance at each meeting of the board of directors and may be paid
a fixed sum for attendance at each meeting of the board of directors or a stated
salary as director. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for attending
committee meetings.
REMOVAL OF DIRECTORS
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Section 14. Unless otherwise restricted by the certificate of
incorporation or by law, any director or the entire board of directors may be
removed, with or without cause, by the holders of a majority of shares entitled
to vote at an election of directors.
ARTICLE IV
NOTICES
Section 1. Whenever, under the provisions of the statutes or of the
certificate of incorporation or of these by-laws, notice is required to be given
to any director or stockholder, it shall not be construed to mean personal
notice, but such notice may be given in writing, by mail, addressed to such
director or stockholder, at his address as it appears on the records of the
corporation, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States mail.
Notice to directors may also be given by facsimile telecommunication.
Section 2. Whenever any notice is required to be given under the
provisions of the statutes or of the certificate of incorporation or of these
by-laws, a waiver thereof in writing, signed by the person or persons entitled
to said notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.
ARTICLE V
OFFICERS
Section 1. The officers of the corporation shall be chosen by the board
of directors and shall be a president, a vice-president, a secretary and a
treasurer. The board of directors may also choose additional vice-presidents,
and one or more assistant secretaries and assistant treasurers. Any number
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of offices may be held by the same person, unless the certificate of
incorporation or these by-laws otherwise provide.
Section 2. The board of directors at its first meeting after each
annual meeting of stockholders shall choose a president, one or more
vice-presidents, a secretary and a treasurer.
Section 3. The board of directors may appoint such other officers and
agents as it shall deem necessary who shall hold their offices for such terms
and shall exercise such powers and perform such duties as shall be determined
from time to time by the board.
Section 4. The salaries of all officers and agents of the corporation
shall be fixed by the board of directors.
Section 5. The officers of the corporation shall hold office until
their successors are chosen and qualify. Any officer elected or appointed by the
board of directors may be removed at any time by the affirmative vote of a
majority of the board of directors. Any vacancy occurring in any office of the
corporation shall be filled by the board of directors.
THE PRESIDENT
Section 6. The president shall be the chief executive officer of the
corporation, shall preside at all meetings of the stockholders and the board of
directors, shall have general and active management of the business of the
corporation and shall see that all orders and resolutions of the board of
directors are carried into effect.
Section 7. He shall execute bonds, mortgages and other contracts
requiring a sea], under the seal of the corporation, except where required or
permitted by law to be otherwise signed and executed and except where the
signing and execution thereof shall be expressly delegated by the board of
directors to some other officer or agent of the corporation.
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THE VICE PRESIDENT
Section 8. In the absence of the president or in the event of his
inability or refusal to act, the vice-president (or in the event there be more
than one vice-president, the vice-presidents in the order designated by the
directors, or in the absence of any designation, then in the order of their
election) shall perform the duties of the president, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the
president. The vice-presidents shall perform such other duties and have such
other powers as the board of directors may from time to time prescribe.
THE SECRETARY AND ASSISTANT SECRETARY
Section 9. The secretary shall attend all meetings of the board of
directors and all meetings of the stockholders and record all the proceedings of
the meetings of the corporation and of the board of directors in a book to be
kept for that purpose and shall perform like duties for the standing committees
when required. He shall give, or cause to be given, notice of all meetings of
the stockholders and special meetings of the board of directors, and shall
perform such other duties as may be prescribed by the board of directors or
president, under whose supervision he shall be. He shall have custody of the
corporate seal of the corporation and he, or an assistant secretary, shall have
authority to affix the same to any instrument requiring it and when so affixed,
it may be attested by his signature or by the signature of such assistant
secretary. The board of directors may give general authority to any other
officer to affix the seal of the corporation and to attest the affixing by his
signature.
Section 10. The assistant secretary, or if there be more than one, the
assistant secretaries in the order determined by the board of directors (or if
there be no such determination, then in. the order of their election) shall, in
the absence of the secretary or in the event of his inability or refusal to act,
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perform the duties and exercise the powers of the secretary and shall perform
such other duties and have such other powers as the board of directors may from
time to time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 11. The treasurer shall have the custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts
and disbursements in books belonging to the corporation and shall deposit all
moneys and other valuable effects in the name and to the credit of the
corporation in such depositories as may be designated by the board of
directors.
Section 12. He shall disburse the funds of the corporation as may be
ordered by the board of directors, taking proper vouchers for such
disbursements, and shall render to the president and the board of directors, at
its regular meetings, or when the board of directors so requires, an account of
all his transactions as treasurer and of the financial condition of the
corporation.
Section 13. If required by the board of directors, he shall give the
corporation a bond (which shall be renewed every six years) in such sum and with
such surety or sureties as shall be satisfactory to the board of directors for
the faithful performance of the duties of his office and for the restoration to
the corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the corporation.
Section 14. The assistant treasurer, or if there shall be more than
one, the assistant treasurers in the order determined by the board of directors
(or if there be no such determination, then in the order of their election)
shall, in the absence of the treasurer or in the event of his inability or
refusal to act, perform the duties and exercise the powers of the treasurer and
shall perform such other duties and have such other powers as the board of
directors may from time to time prescribe.
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ARTICLE VI
CERTIFICATES FOR SHARES
Section 1. The shares of the corporation shall be represented by a
certificate or shall be uncertificated. Certificates shall be signed by, or in
the name of the corporation by, the chairman or vice-chairman of the board of
directors, or the president or a vice-president, and by the treasurer or an
assistant treasurer, or the secretary or an assistant secretary of the
corporation.
If the corporation shall be authorized to issue more than one class of
stock or more than one series of any class, the powers, designations,
preferences and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualification, limitations or
restrictions of such preferences and/or rights shall be set forth in full or
summarized on the face or back of the certificate which the corporation shall
issue to represent such class or series of stock, provided that, except as
otherwise provided in section 202 of the General Corporation Law of Delaware, in
lieu of the foregoing requirements, there may be set forth on the face or back
of the certificate which the corporation shall issue to represent such class or
series of stock, a statement that the corporation will furnish without charge to
each stockholder who so requests the powers, designations, preferences and
relative, participating, optional or other special rights of each class of stock
or series thereof and the qualifications, limitations or restrictions of such
preferences and/or rights.
Within a reasonable time after the issuance or transfer of
uncertificated stock, the corporation shall send to the registered owner thereof
a written notice containing the information required to be set forth or stated
on certificates pursuant to Sections 151, 156, 202(a) or 218(a) or a statement
that the corporation will furnish without charge to each stockholder who so
requests the powers, designations, preferences and relative participating,
optional Or other special rights of each class of
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stock or series thereof and the qualifications, limitations or restrictions of
such preferences and/or rights.
Section 2. Any of or all the signatures on a certificate may be
facsimile. In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
io be such officer, transfer agent or registrar before such certificate is
issued, it may be issued by the corporation with the same effect as if he were
such officer, transfer agent or registrar at the date of issue.
LOST CERTIFICATES
Section 3. The board of directors may direct a new certificate or
certificates or uncertificated shares to be issued in place of any certificate
or certificates theretofore issued by the corporation alleged to have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen or destroyed. When
authorizing such issue of a new certificate or certificates or uncertificated
shares, the board of directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, stolen or
destroyed certificate or certificates, or his legal representative, to advertise
the same in such manner as it shall require and/or to give the corporation a
bond in such sum as it may direct as indemnity against any claim that may be
made against the corporation with respect to the certificate alleged to have
been lost, stolen or destroyed.
TRANSFER OF STOCK
Section 4. Upon surrender to the corporation or the transfer agent of
the corporation of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignation or authority to transfer, it shall be
the duty of the corporation to issue a new certificate to the person
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entitled thereto, cancel the old certificate and record the transaction upon its
books. Upon receipt of proper transfer instructions from the registered owner of
uncertificated shares such uncertificated shares shall be cancelled and issuance
of new equivalent uncertificated shares or certificated shares shall be made to
the person entitled thereto and the transaction shall be recorded upon the books
of the corporation.
FIXING RECORD DATE
Section 5. In order that the corporation may determine the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the board of directors may fix, in advance, a record date,
which shall not be more than sixty nor less than ten days before the date of
such meeting, nor more than sixty days prior to any other action. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting: provided,
however, that the board of directors may fix a new record date for the adjourned
meeting.
REGISTERED STOCKHOLDERS
Section 6. The corporation shall be entitled to recognize the exclusive
right of a person registered on its books as the owner of shares to receive
dividends, and to vote as such owner, and to hold liable for calls and
assessments a person registered on its books as the owner of shares, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on
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the part of any other person, whether or not it shall have express or other
notice thereof, except as otherwise provided by the laws of Delaware.
ARTICLE VII
GENERAL PROVISIONS
DIVIDENDS
Section 1. Dividends upon the capital stock of the corporation, subject
to the provisions of the certificate of incorporation, if any, may be declared
by the board of directors at any regular or special meeting, pursuant to law.
Dividends may be paid in cash, in property, or in shares of the capital stock,
subject to the provisions of the certificate of incorporation.
Section 2. Before payment of any dividend, there may be set aside out
of any funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purpose as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
ANNUAL STATEMENT
Section 3. Section 3. The board of directors shall present at each
annual meeting, and at any special meeting of the stockholders when called for
by vote of the stockholders, a full and clear statement of the business and
condition of the corporation.
CHECKS
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Section 4. All checks or demands for money and notes of the corporation
shall be signed by such officer or officers or such other person or persons as
the board of directors may from time to time designate.
FISCAL YEAR
Section 5. The fiscal year of the corporation shall be fixed by
resolution of the board of directors.
SEAL
Section 6. The corporate seal shall have inscribed thereon the name of
the corporation, the year of its organization and the words "Corporate Seal,
Delaware". The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
INDEMNIFICATION
Section 7. The corporation shall indemnify its officers, directors,
employees and agents to the extent permitted by the General Corporation Law of
Delaware.
ARTICLE VIII
AMENDMENTS
Section 1. These bylaws may be altered, amended or repealed or new
bylaws may be adopted by the stockholders or by the board of directors, when
such power is conferred upon the board of directors by the certificate of
incorporation at any regular meeting of the stockholders or of the board of
directors or at any special meeting of ;he stockholders or of the board of
directors if notice of such alteration, amendment, repeal or adoption of new
bylaws be contained in the notice of such special meeting. If the power to
adopt, amend or repeal bylaws is conferred upon the board of directors by
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the certificate of incorporation it shall not divest or limit the power of the
stockholders to adopt, amend or repeal bylaws.
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ADWEST AMERICA, INC.
MINUTES OF THE ANNUAL MEETING
OF THE SOLE SHAREHOLDER
BY WRITTEN CONSENT
DATED THE 10TH DAY OF SEPTEMBER, 1996
The undersigned, being the sole Shareholder of Adwest America, Inc., a
Delaware corporation, hereby adopts by this written consent, in accordance with
The General Corporation Law of the State of Delaware, after due consideration of
these as well as alternatives, the following resolutions with the same force and
effect as if they had been adopted at a duly convened meeting of the sole
Shareholder of the Corporation.
As Graham R. Menzies has organized the agenda of this meeting, he
shall be considered the Chairman for the purpose of this consent.
I.
RESOLVED, that ARTICLE II, Section 2, of Bylaws of the
Corporation are hereby amended to provide that: "The annual meetings
of stockholders, commencing with the year 1996, shall be held on the
second Tuesday in September, if not a legal holiday, and if a legal
holiday, then the next secular day following, at 10:00 A.M., or at
such other date and time as shall be designated from time to time by
the Board of Directors and stated in the notice of the meeting, at
which they shall elect by a plurality vote a board of directors, and
transact such other business as may properly be brought before the
meeting."
II.
RESOLVED, that the activities of this Corporation, including
all of its business, the conduct of its affairs and all actions taken
by its Officers and Directors, be and they hereby are approved and
ratified.
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220-958
ARTICLES OF INCORPORATION
For use by Domestic Profit Corporations
(Please read information and instructions on the last page)
Pursuant to the provisions of Act 284, Public Acts of 1972, the
undersigned corporation executes the following Articles:
ARTICLE I
The name of the corporation is:
Western Automotive, Inc.
ARTICLE II
The purpose or purposes for which the corporation is formed is to engage in any
activity within the purposes for which corporations may be formed under the
Business Corporation Act of Michigan:
ARTICLE III
The total authorized shares:
1. Common Shares 60,000
Preferred Shares
2. A statement of all or any of the relative rights, preferences and
limitations of the shares of each class is as follows:
<PAGE>
ARTICLE IV
1. The address of the registered office is:
19th Floor, One Woodward Avenue, Detroit, Michigan 48226
2. The mailing address of the registered office if different than above:
3. The name of the resident agent at the registered office is: John R.
Nicholson, Esq.
ARTICLE V
The name(s) and address(es) of the incorporator(s) is (are) as follows:
Name Resident or Business Address
John R. Nicholson, Esq. 19th Floor, One Woodward Avenue
Detroit, Michigan 48226
ARTICLE VI (Optional. Delete if not applicable)
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 (Optional. Delete if not applicable)
Any action required or permitted by the Act to be taken at an annual or special
meeting of shareholders may be taken without a meeting, without prior notice,
and without a vote, if consents in writing, setting forth the action so taken
are signed by the holders of outstanding shares having not less than the minimum
number of votes that would be necessary to authorize or take the action at a
meeting at which all shares entitled to vote on the action were present and
voted. The written consents shall bear the date of signature of each shareholder
who signs the consent. No written consents shall be effective to take the
corporation action referred to unless, within 60 days after the record date for
determining shareholders entitled to express consent to or to dissent from a
proposal without a meeting, written consents signed by a sufficient number of
shareholders to take the action are delivered to the corporation. Delivery shall
be to the corporation's registered office, its principal place of business, or
an officer or agent of the corporation having custody of the minutes of the
proceedings of its shareholders. Delivery made to a corporation's registered
office shall be by hand or by certified 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.
<PAGE>
Use space below for additional Articles or for continuation of previous
Articles. Please identify any Article being continued or added. Attach
additional pages if needed.
I, the incorporator sign my name this 17th day of January, 1995.
/s/ John R. Nicholson, Esq.
- --------------------------------------------------------------
<PAGE>
CERTIFICATE OF AMENDMENT TO THE ARTICLES OF INCORPORATION
For use by Domestic Profit and Nonprofit Corporations
Please read information and instructions on the last page)
Pursuant to the provisions of Act 284, Public Acts of 1972 (profit
corporations), or Act 162, Public Acts of 1982 (nonprofit corporations), the
undersigned corporation executes the following Certificate:
1. The present name of the corporation is: Western Automotive, Inc.
2. The identification number assigned by the Bureau is: 220-958
3. The location of the registered office is: 19th Floor, One Woodward
Avenue, Detroit, Michigan 48226
4. Article I of the Articles of Incorporation is hereby amended to read
as follows::
The name of the corporation is: Adwest Western Automotive, Inc.
<PAGE>
5. COMPLETE SECTION (a) IF THE AMENDMENT WAS ADOPTED BY THE UNANIMOUS
CONSENT OF THE INCORPORATOR(S) BEFORE THE FIRST MEETING OF THE BOARD OF
DIRECTORS OR TRUSTEES; OTHERWISE, COMPLETE SECTION (b). DO NOT COMPLETE
BOTH.
a. |X| The foregoing amendment to the Articles of
Incorporation was duly adopted on the _____ day of
__________, 19__, in accordance with the provisions
of the Act by the unanimous consent of the
incorporator(s) before the first meeting of the Board
of Directors or Trustees.
Signed this __________ day of ____________________, 19_____
---------------------------------- --------------------------------
(Signature) (Signature)
---------------------------------- --------------------------------
(Type or Print Name) (Type or Print Name)
---------------------------------- --------------------------------
(Signature) (Signature)
---------------------------------- --------------------------------
(Type or Print Name) (Type or Print Name)
b. |X| The foregoing amendment to the Articles of
Incorporation was duly adopted on the 2nd day of
January, 1997. The amendment: (check one of the
following)
| | was duly adopted in accordance with Section 611(2)
of the Act by the vote of the shareholders if a
profit corporation, or by the vote of the
shareholders or members if a nonprofit
corporation, or by the vote of the directors if a
nonprofit corporation organized on a nonstock
directorship basis. The necessary votes were cast
in favor of the amendment.
| | as duly adopted by the written consent of all
directors pursuant to Section 525 of the Ac wt and
the corporation is a nonprofit corporation
organized on a nonstock directorship basis.
| | was duly by the written consent of the
shareholders or members having not less than the
minimum number of votes required by statute in
accordance with Section 407(1) and (2) of the Act
if a nonprofit corporation, or Section 407(1) of
the Act if a profit corporation. Written notice to
shareholders who have not consented in writing has
been given. (Note: Written consent by less than
all of the shareholders or members is permitted
only if such provision appears in the Articles of
Incorporation.)
| | was duly adopted by the written consent of all the
shareholders or members entitled to vote in
accordance with Section 407(3) of the Act if a
nonprofit corporation, or Section 407(2) of the
Act if a profit corporation.
Signed this 27th day of January, 1997
By /s/ Alan Symonds
-------------------------------------------------
President
<PAGE>
BYLAWS
OF
WESTERN AUTOMOTIVE, INC.
ARTICLE I
OFFICES
1.01 PRINCIPAL OFFICE - The principal office and the registered office
of the Corporation shall be at such places in the State of Michigan as the Board
of Directors shall from time to time determine.
1.02 OTHER OFFICES - The Corporation may have offices at such other
places, either within or without the State of Michigan, as the Board of
Directors may from time to time determine.
ARTICLE II
STOCK
2.01 CAPITAL STOCK - Shares of capital stock of the Corporation shall
be issued in such amounts, at such times, for such consideration, under such
plans and upon such terms and conditions as the Board of Directors shall
determine, subject to any relevant restrictions and Provisions of the Articles
of Incorporation and these Bylaws.
2.02 CERTIFICATES FOR SHARES - Every Shareholder shall be entitled to a
certificate for his shares signed by the President or a Vice President and the
Secretary or an Assistant Secretary certifying the number and class of shares
represented by such certificates, and, in the event that more than one class of
stock is authorized, the certificate shall state that the Corporation will
furnish to the Shareholder, upon written request, a full statement of the terms,
provisions, preferences and limitations of all classes of stock. If such shares
are not fully paid, the certificate shall indicate the amount paid.
2.03 TRANSFER OF SHARES - Shares shall be transferred only on the books
of the Corporation by the person named in the certificate, or by attorney
lawfully authorized in writing, and upon surrender of the certificate. A record
shall be made of every such transfer.
2.04 REGISTERED SHAREHOLDERS - The Corporation shall have the right to
treat the registered holder of any shares as the absolute owner thereof, and
shall not be bound to recognize any claim to such shares, legal or equitable, on
the part of any other person.
2.05 CLOSING THE STOCK TRANSFER BOOKS - The Board of Directors shall
have power to close the stock transfer books of the Corporation for a period not
exceeding forty (40) days preceding the date fixed for any meeting of the
Shareholders, or for payment of any dividend or allotment of rights,
<PAGE>
or for any change or conversion or exchange of capital stock to go into effect;
provided, however, that in lieu of closing the stock transfer books, the Board
of Directors may fix in advance a date not exceeding forty (40) days preceding
the date fixed for any of said events as a record date for the determination of
Shareholders entitled to notice of and to vote at any such meeting, or to
receive payment of any such dividend or to receive such allotment of rights or
to participate in any such change, conversion or exchange of capital stock, and
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 to
receive payment of such dividend or to receive such allotment of rights, or to
participate in such change, conversion or exchange of capital stock, 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 By-Law
shall affect the rights of a Shareholder and his transferee or transferor as
between themselves.
2.06 LOST OR DESTROYED CERTIFICATES - Upon the presentation to the
Corporation of a proper affidavit attesting the loss, destruction or mutilation
of any certificate or certificates for shares of stock of the Corporation, the
Board of Directors shall direct the issuance of a new certificate or
certificates to replace the certificates so alleged to be lost, destroyed or
mutilated. The Board of Directors may require as a condition precedent to the
issuances of new certificates any or all of the following (a) presentation of
additional evidence or proof of the loss, destruction or mutilation claimed; (b)
advertisement of loss in such manner as the Board of Directors may direct or
approve; (c) a bond or agreement of indemnity, in such form and amount and with
such sureties, or without sureties, as the Board of Directors may direct or
approve; (d) the order or approval of a court or judge.
2.07 REGULATIONS - The Board of Directors shall have power and
authority to make all such rules and regulations as the Board shall deem
expedient regulating the issue, transfer and registration of certificates for
shares in the Corporation.
ARTICLE III
SHAREHOLDER MEETINGS
3.01 PLACE OF MEETINGS - All meetings of Shareholders shall be held at
the principal office of the Corporation in the State of Michigan, unless
otherwise directed or approved by the Board of Directors or by the Shareholders
holding a majority of the shares of stock of the Corporation outstanding and
entitled to vote.
3.02 ANNUAL MEETING - The annual meeting of Shareholders shall be held
on the second Tuesday in September of each year at 11 A.M.
3.03 SPECIAL MEETINGS - Special meetings of Shareholders may be called
by the President and shall be called by the President or Secretary at the
written request of Shareholders holding a
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<PAGE>
majority of the shares of stock of the Corporation outstanding and entitled to
vote. The request shall state the purpose or purposes for which the meeting is
to be called.
3.04 NOTICE - Written notice of every Shareholder meeting shall be
delivered personally or mailed to each Shareholder entitled to vote thereat, at
his or her address as the same appears on the stock records of the Corporation,
at least ten (10) days prior to any meeting, and any notice of a special meeting
shall state the purpose or purposes thereof. Notice of the time, place and
purpose of any Shareholder meeting may be waived by telegram, radiogram,
cablegram or other writing by those not present and entitled to vote thereat,
either before or after the holding thereof, and whenever all the Shareholders
shall meet in person or by proxy, such meeting shall be valid for all purposes,
without call or notice.
3.05 ACTION WITHOUT A MEETING - Any action required or permitted to be
taken at a meeting of the Shareholders may be taken without a meeting if a
consent in writing, setting forth the action so taken, shall be signed by
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.
3.06 QUORUM - At any meeting of Shareholders, the holders of a majority
of all the voting shares of the Corporation then outstanding, present in person
or by proxy, shall constitute a quorum. Any meeting, including those at which
less than a quorum is present, may be adjourned from time to time by vote of a
majority of voting shares of those who attend, and such adjourned meeting may be
held without notice other than the announcement at the meeting at which
adjournment is voted. When a quorum shall be present upon any such adjourned
day, any business may be transacted which might have been transacted at the
meeting as originally called.
3.07 VOTING - Each Shareholder shall be entitled to one (1) vote for
each share of voting stock registered in his or her name on the books of the
Corporation. A Shareholder may vote in person or by proxy duly appointed by an
instrument in writing filed with the Secretary of the meeting. Election of the
Directors shall be by cumulative voting.
3.08 CHAIRMAN AND SECRETARY OF MEETINGS - The President or Vice
President and the Secretary or Assistant Secretary, if present, shall act as
Chairman and Secretary, respectively, of every meeting of Shareholders unless
otherwise directed by the Shareholders present at such meeting.
3.09 OTHER CORPORATION - Any other corporation owning voting shares in
this Corporation may vote upon the same by the president of such stockholder
corporation, or by proxy appointed by him or her, unless some other person shall
be appointed to vote upon such shares by resolution of the board of directors of
such stockholder corporation.
3
<PAGE>
ARTICLE IV
DIRECTORS
4.01 NUMBER, TERM OF OFFICE AND REMOVAL - The affairs of this
Corporation shall be managed by a Board of Directors consisting of not less than
one Director. Said Directors shall hold office until the next annual meeting of
Shareholders and until their respective successors are elected and qualified.
The Shareholders may, at any special meeting called for that purpose, remove any
member of the Board of Directors, with or without cause, and at such meeting or
any other meeting called for that purpose, may elect a Director to fill the
vacancy thus created.
4.02 VACANCIES - Vacancies in the Board of Directors occurring by
reason of death, resignation, removal, increase in the number of Directors, or
otherwise, may be filled by the remaining members of the Board by a majority
vote, unless, in the case of removal, the vacancy is filled by the Shareholders
of the Corporation, and such Directors so elected shall hold office until their
respective successors are elected and qualified at the next annual meeting of
Shareholders or at any special meeting of Shareholders called for such purpose.
4.03 ORGANIZATIONAL MEETING - At the place of holding the annual
meeting of Shareholders or any special meeting called for the purpose of
election of the Board of Directors, and immediately following the same, the
Board of Directors, as constituted upon final adjournment of said meeting shall
convene without other or further notice than this By-Law for the purpose of
electing Officers and transacting other business properly brought before it. The
organizational meeting in any year may be held at a different time and place if
so designated by the Directors of such new Board.
4.04 REGULAR MEETINGS - Regular meetings of the Board of Directors
shall be held at such time and at such place or places as the Directors shall
from time to time determine. If the time and place of the next regular meeting
of the Board is determined at any meeting of the Board, no notice of the meeting
shall be required. If the time and place is changed after a prior determination,
the Secretary shall give such notice to the Directors as is provided in the case
of a special meeting.
4.05 SPECIAL MEETINGS - Special meetings of the Board of Directors
shall be called by the Secretary upon the written request of any Director. The
Secretary shall convene a special meeting not later than thirty (30) days after
receipt of the written request and shall give notice of the time, place and
purpose thereof to each Director, by mail, telegram or other writing, at least
forty-eight (48) hours before the date fixed for such meeting. At any meeting,
regular or special, at which every Director shall be present, even though
without notice, any business may be transacted. Notice of the time, place and
purpose of any meeting, regular or special, of the Board of Directors may be
waived by telegram, radiogram, cablegram or other writing by those not present
and entitled to vote thereat, either before or after the holding thereof.
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<PAGE>
4.06 ACTION WITHOUT A MEETING - Any action required or permitted to be
taken at a meeting of the Board of Directors may be taken without a meeting if a
consent in writing, setting forth the action so taken, shall be signed by all
the Directors.
4.07 QUORUM - At all meetings of the Board of Directors, a Majority
shall constitute a quorum for the transaction of business. Any meeting,
including those at which less than a quorum is present, may be adjourned by
majority vote of those who attend, and the adjourned, meeting may be held
without notice except the announcement at the meeting at which adjournment is
voted. If the Directors shall consent in writing to any action to be taken by
the Corporation, such action shall be as valid corporate action as though it had
been authorized at a meeting of the Board of Directors.
4.08 MANAGEMENT - The Directors shall have exclusive authority to make
management decisions necessary to the conduct of the business of the Corporation
either directly or through Officers and agents selected by them. Independent
business decisions made by the Directors or pursuant to their direction shall
not require ratification by the Shareholders or their successors in interest.
4.09 EXECUTIVE COMMITTEE - The Board of Directors may designate two or
more of their number to constitute an executive committee which shall have and
exercise the authority of the Board of Directors in the management of the
business of the Corporation between meetings of the Board, subject to such
limitations and restrictions as the Board may impose. This provision is
discretionary and may be adopted in the future from time to time.
4.10 COMPENSATION OF DIRECTORS - Directors may receive salaries, fees
and/or expenses for their attendance and services at meetings of the Board and
of committees thereof. This provision is discretionary and may be adopted in the
future from time to time.
ARTICLE V
OFFICERS
5.01 TITLE, APPOINTMENT AND REMOVAL - The Board of Directors may select
a President, one or more vice Presidents, a Secretary and a Treasurer, and such
other Officers, including a Chairman of the Board, as the Board shall deem
advisable. Officers shall hold their offices for such terms as shall be
determined by the Board. An Officer need not be a Director of the Corporation.
Any two of the above offices, except those of President and Vice President, may
be held by the same person, but no Officer shall execute, acknowledge or verify
any instrument in more than one capacity. The Board of Directors may fix the
salaries of the Officers of the Corporation. Any Officer or agent may be
removed, for or without cause, or any vacancies filled, by the Board of
Directors whenever, in its judgment, the business interests of the Corporation
will be served thereby.
5.02 EXECUTION OF INSTRUMENTS - The Board of Directors of the
Corporation may in any instance designate the Officers and agents who shall have
authority to execute any contract,
5
<PAGE>
conveyance 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 or the President or 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.
ARTICLE VI
DUTIES OF OFFICERS
6.01 CHAIRMAN OF THE BOARD - The Chairman of the Board, if such office
is filled, shall preside at all meetings of the Shareholders and Directors at
which he or she is present. He or she shall serve as liaison between the Board
and the President during the intervals between duly convened meetings.
6.02 PRESIDENT - The President shall be the chief executive and
operational Officer of the Corporation. He or she shall see that all orders and
resolutions of the Board are carried into effect, and he or she shall have the
general powers of supervision and management as are usually vested in the chief
executive officer of a corporation.
6.03 VICE PRESIDENTS - The Vice Presidents, in the order of their
seniority (official capacity and designation) shall, in the absence or
disability of the President, perform his or her duties and exercise his or her
powers, and shall perform such other duties as the Board of Directors may
prescribe.
6.04 SECRETARY - The Secretary shall attend all sessions of the Board
and all meetings of the Shareholders and shall record all votes and the minutes
of all proceedings in a book to be kept for that purpose. He or she shall give
or cause to be given notice of all meetings of the Shareholders and of the Board
of Directors and shall perform such other duties as may be delegated by the
Board of Directors or the President. The Secretary may delegate any of his or
her duties, powers, and authorities to one or more Assistant Secretaries, unless
such delegation be disapproved by the Board of Directors.
6.05 TREASURER - The Treasurer shall have the custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in the name and to the credit of the Corporation in such
depositories as may be designated by the Board of Directors. He or she 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 be
disapproved by the Board of Directors.
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<PAGE>
6.06 BONDS - The Board of Directors of the Corporation may require any
officer, agent or employee to give bond for the faithful discharge of his duty
and for the protection of the Corporation, in such sum and with such surety or
sureties as the Board may deem advisable.
ARTICLE VII
CONTRACTS WITH DIRECTORS
7.01 CONTRACTS WITH DIRECTORS - In the absence of fraud, no contract or
other transaction between the Corporation and any other corporation shall be
affected or invalidated by the fact that any Director of this Corporation is
interested in or is a director or officer of such other corporation, and any
Director may be a party or may be interested in any contract or transaction of
this Corporation or in which this Corporation is interested; and in the absence
of fraud, no contract, act or transaction of the Corporation with any person or
persons, firm or corporation, shall be affected or invalidated by the fact that
any Director of this Corporation is a party to or interested in such contract,
act or transaction, or in any way connected with such person or persons, firm or
corporation and in the absence of fraud, each and every person who may become a
Director of this Corporation is hereby relieved from any liability that might
otherwise exist from thus contracting with the Corporation for the benefit of
himself or herself or any firm, association or corporation in which he or she
may be in any way interested.
ARTICLE VIII
INDEMNIFICATION
8.01 THIRD PARTY ACTIONS - The Corporation shall indemnify any 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 he or
she 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 foreign or domestic corporation,
partnership, joint venture, trust or other enterprise, whether for profit or
not, against expenses including attorneys, fees, judgments, penalties, fines and
amounts paid in settlement actually and reasonably incurred by him or her in
connection with the action, suit, or proceeding, if he or she acted in good
faith and in a manner which he or she 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, if he had no reasonable cause to
believe that his or her conduct was unlawful. The termination of an action, suit
or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, does not, of itself, create a presumption that the
person did not act in good faith and in a manner which he 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
reasonable cause to believe that his conduct was unlawful.
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<PAGE>
8.02 DERIVATIVE ACTION - The Corporation shall indemnify any 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 to procure a
judgment in its favor by reason of the f act that he or she 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 foreign or domestic corporation, partnership, joint
venture, trust, or other enterprise, whether for profit or not, against
expenses, including actual and reasonable attorneys' fees and amounts paid in
settlement incurred by him or her in connection with the action or suit, if he
or she acted in good faith and in a manner he or she 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 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
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnification for the expenses which the court considers proper.
8.03 DETERMINATION OF RIGHT TO INDEMNIFICATION
(1) To the extent that a Director, Officer, Employee or Agent
of the Corporation has been successful on the merits or otherwise in
defense of an action, suit, or proceeding referred to in Sections 8.01
or 8.02 above, or in defense of a claim, issue, or matter in the
action, suit or proceeding, he or she shall be indemnified against
expenses, including actual and reasonable attorneys' fees, incurred by
him or her in connection with the action, suit or proceeding and an
action, suit or proceeding brought to enforce the mandatory
indemnification provided in this Section 8.03.
(2) Any indemnification under Sections 8.01 or 8.02 above,
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 Director, Officer, Employee or Agent is proper
in the circumstances because he has met the applicable standard of
conduct as set forth in Sections 8.01 or 8.02 above. This determination
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 were not parties to the
action, suit or proceeding;
(b) If the quorum described in subdivision (a) is not
obtainable, then by a majority vote of a committee of
Directors who are not parties to the action. The committee
shall consist of not less than two (2) disinterested
Directors;
(c) if the majority described in subdivision (b) is
not obtainable, then by a majority vote of the Shareholders
who are not parties to the action, suit or proceeding;
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(d) If the majority vote of Shareholders described in
subdivision (c) is not obtainable, then by independent legal
counsel in a written opinion.
(3) If a person is entitled to indemnification under Sections
8.01 or 8.02 above, for a portion of expenses including attorney's
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.
8.04 ADVANCE PAYMENT - Expenses incurred in defending a civil or
criminal action, suit, or proceeding described in Sections 8.01 and 8.02 above,
may be paid by the Corporation in advance of the final disposition of such
action, suit, or proceeding upon receipt of an undertaking by or on behalf of
the Director, Officer, Employee or Agent to repay the expenses if it is
ultimately determined that he is not entitled to be indemnified by the
Corporation. The undertaking shall be by unlimited general obligation of the
person on whose behalf advances are made but need not be secured.
8.05 VALIDITY OF PROVISIONS
(1) The indemnification or advancement of expenses provided
under Sections 8.01 to 8.04 is not exclusive of other rights to which a
person seeking indemnification or advancement of expenses may be
entitled under the Articles of Incorporation, Bylaws, or a contractual
agreement. 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.
(2) The indemnification provided for in Sections 8.01 to 8.05
continues as to a person who ceases to be a Director, Officer, Employee
or Agent and shall inure to the benefit of the heirs, executors, and
administrators of the person.
8.06 PURCHASE OF INSURANCE - The Corporation shall have the power to
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 him or her 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 the power to indemnify him or her
against such liability under Sections 8.01 to 8.05.
8.07 DEFINITION OF CORPORATION - For purposes of Sections 8.01 to 8.06
above, "Corporation" includes all constituent corporations absorbed in a
consolidation or merger and the resulting or surviving corporation, so that a
person who is or was a Director, Officer, Employee or Agent of the constituent
corporation or is or was serving at the request of the constituent corporation
as a Director, Officer, Partner, Trustee, Employee or Agent of another foreign
or domestic
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corporation, partnership, joint venture, trust or other enterprise, whether for
profit or not, shall stand in the same position under the provisions of this
Article VIII with respect to the resulting or surviving corporation as the
person would if he had served the resulting or surviving corporation in the same
capacity.
ARTICLE IX
SEAL
9.01 SEAL - The Corporation shall not be required to have a seal.
ARTICLE X
AMENDMENTS
10.01 AMENDMENTS - The Shareholders or the Board of Directors may
alter, amend, add to or repeal these Bylaws, including fixing and altering the
number of Directors, provided that the Board of Directors shall not make or
alter any Bylaws fixing their qualifications, classifications or term of office,
and provided further that notice of any meeting of Shareholders or Board of
Directors called for the purpose of amending these Bylaws shall include notice
of the proposed amendments.
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<PAGE>
ARTICLES OF INCORPORATION
FOR USE BY DOMESTIC PROFIT CORPORATION
(Please read information and instructions on last page)
PURSUANT TO THE PROVISIONS OF ACT 284, PUBLIC ACTS OF 1972, THE UNDERSIGNED
CORPORATION EXECUTES THE FOLLOWING ARTICLES:
ARTICLE I
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The name of the corporation is: X.E. Co.
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ARTICLE II
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The purpose or purposes for which the corporation is formed is to engage in any
activity within the purposes for which corporations may be formed under the
Business Corporation Act of Michigan.
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ARTICLE III
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The total authorized shares:
1. Common Shares 60,000
-----------
Preferred Shares None
----------
2. A statement of all or any of the relative rights, preferences and
limitations of the shares of each class is as follows:
N/A
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ARTICLE IV
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1. The address of the registered office is: 27335 W. 11 Mile Road,
Southfield, MI 48035
2. The mailing address of the registered office if different than above:
27335 W. 11 Mile Road, Southfield, MI 48035
3. The name of the resident agent at the registered office is: James O.
Futterknecht, Jr.
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ARTICLE V
<PAGE>
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The name(s) and address(es) of the incorporator(s) is (are) as follows:
Name Residence or Business Address
Stephen J. Lowney 313 S. Washington Square, Lansing, MI 48933-2193
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Use space below for additional Articles or for continuation of previous
Articles. Please identify any Article being continued or added. Attach
additional pages if needed.
ARTICLE VI
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A director of the corporation shall not be personally liable to the corporation
or its shareholders for monetary damages for a breach of fiduciary duty as a
director, except for liability: (a) for any breach of the director's duty of
loyalty to the corporation or its shareholders; (b) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law; (c) resulting from a violation of ss.55(1) of the Michigan Business
Corporation Act; or (d) for any transaction from which the director derived an
improper personal benefit. In the event the Michigan Business Corporation Act is
amended, after approval by the shareholders of this Article VI to authorize
corporate action further eliminating or limiting the personal liability of
directors, then the liability of a director of the corporation shall be
eliminated or limited to the fullest extent permitted by the Michigan Business
Corporation Act, as so amended. Any repeal, modification or adoption of any
provision in these Articles of Incorporation inconsistent with this Article VI
shall not adversely affect any right or protection of a director of the
corporation existing at the time of such repeal, modification or adoption.
- -----------------------------------------------------------------------------
I, the incorporator, sign my name this 17th day of December, 1996.
- ----------------------------------- ------------------------------------
/S/ STEPHEN J. LOWNEY
<PAGE>
Dated: December 17, 1996
BYLAWS
OF
X.E. CO.
ARTICLE I
SHARES OF STOCK
1.1 CERTIFICATE OF SHARES. The certificates of shares of capital stock
of the Corporation shall be in such form as shall be approved by the Board of
Directors and as shall be required by law. The certificates of shares shall
be signed by the Chairman of the Board, Vice-Chairman of the Board, President
or any another officer of the Corporation. The certificates may be sealed
with the seal of the Corporation or a facsimile thereof.
1.2 TRANSFER OF SHARES. Shares of capital stock of the Corporation
shall be transferred by endorsement of the certificates representing said
shares by the registered holder thereof, or by his legal representative, who
shall furnish proper evidence of authority to transfer, or by his attorney
who shall be authorized by a Power of Attorney which is duly executed and
filed with the Secretary of the Corporation, and by the surrender of the
shares to the Secretary for cancellation. The person whose name is listed on
the books of the Corporation as the owner of the shares shall be deemed by
the Corporation to be the owner thereof for all purposes.
1.3 LOST CERTIFICATES. In the event of loss of stock certificates, new
certificates shall be issued only upon proof of loss by affidavit by the
registered holder and approval by the Board of Directors, who may require a
Bond of Indemnity in a form satisfactory to them as a condition thereof.
1.4 FIXING OF RECORD DATE. For the purpose of determining shareholders
entitled to notice of and to vote at a meeting of shareholders or an
adjournment of a meeting, the Board may fix a record date which shall not
precede the date on which the resolution fixing the record date is adopted by
the Board. The date shall be not more than sixty (60) nor less than ten (10)
days before the date of the meeting. If a record date is not fixed, the
record date for determination of shareholders entitled to notice of or to
vote at a meeting of shareholders shall be the close of business on the day
next preceding the day on which notice is given, or if no notice is given,
the day next preceding the day on which the meeting is held. When a
determination of shareholders of record entitled to notice of or to vote at a
meeting of shareholders has been made as provided in this section, the
<PAGE>
determination applies to any adjournment of the meeting, unless the Board
fixes a new record date under this section for the adjourned meeting.
For the purpose of determining shareholders entitled to express consent
to or to dissent from a proposal without a meeting, the Board may fix a
record date which shall not precede the date on which the resolution fixing
the record date is adopted by the Board and shall not be more than ten (10)
days after the Board resolution. If a record date is not fixed and prior
action by the Board is required with respect to the corporate action to be
taken without a meeting, the record date shall be the close of business on
the day on which the resolution of the Board is adopted. If a record date is
not fixed and prior action by the Board is not required, the record date
shall be the first date on which a signed written consent is delivered to the
Corporation pursuant to Section 407 of the Michigan Business Corporation Act,
as amended, or any successor provision.
For the purpose of determining shareholders entitled to receive payment
of a share dividend or distribution, or allotment of a right, or for the
purpose of any other action, the Board may fix a record date which shall not
precede the date on which the resolution fixing the record date is adopted by
the Board. The date shall not be more than sixty (60) days before the
payment of the share dividend or distribution or allotment of a right or
other action. If a record date is not fixed, the record date shall be the
close of business on the day on which the resolution of the Board relating to
the corporate action is adopted.
1.5 DIVIDENDS. The Board of Directors may, from time to time, declare
and the Corporation may pay dividends on its outstanding shares in the manner
and upon the terms and conditions provided by law and its Articles of
Incorporation.
ARTICLE II
SHAREHOLDERS
2.1 ANNUAL MEETING. The annual meeting of the shareholders shall be
held at a time and place designated by the Board of Directors. The purpose of
the annual meeting shall be to elect Directors, and to transact such other
business as may come before the meeting.
2.2 SPECIAL MEETING. Special meetings of the shareholders may be
called by the President or Secretary and shall be called by either of them on
the request in writing or by vote of one or more shareholders of record
owning a majority of the issued and outstanding shares of capital stock of
the Corporation.
2.3 NOTICE OF MEETING. Written notice of the time, place and purpose
of any shareholders' meeting shall be given to each shareholder, either
personally or by mail, not less than ten (10) days nor more than sixty (60)
days before the meeting. If mailed, notice shall be deemed given by
2
<PAGE>
depositing the same in a post office box, postage prepaid, and addressed to
the last-known address of such shareholder.
2.4 QUORUM OF SHAREHOLDERS. Except as hereinafter provided and as
otherwise provided by law, at any meeting of the shareholders, a majority in
interest of all the capital stock issued and outstanding, represented by
shareholders of record in person or by proxy, shall constitute a quorum. The
shareholders present in person or by proxy at such meeting may continue to do
business until adjournment, notwithstanding the withdrawal of enough
shareholders to leave less than a quorum. Less interest than a quorum may
adjourn any meeting.
2.5 VOTING. Each outstanding share is entitled to one vote on each
matter submitted to a vote, unless otherwise provided in the Articles of
Incorporation. A vote may be cast either orally or in writing. When an
action, other than the election of Directors, is to be taken by 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 plurality is
required by the Articles of Incorporation or by law. Except as otherwise
provided by the Articles of Incorporation, the Directors shall be elected by
a plurality of the votes cast at an election of Directors.
2.6 PROXIES. Shareholders of record may vote at any meeting either in
person or by proxy in writing, which shall be filed with the secretary of the
meeting before being voted. Such proxies shall entitle the holders thereof to
vote at any adjournment of such meeting, but shall not be valid after the
final adjournment thereof. No proxy shall be valid after the expiration of
three (3) years from the date of its execution unless the shareholder
executing it shall have specified therein the length of time it is to
continue in force, which shall be for some limited period.
2.7 WAIVER OF NOTICE. Attendance of a person at a meeting of
shareholders, in person or by proxy, constitutes a waiver of notice of the
meeting, except when the shareholder attends a meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction of
any business because the meeting is not lawfully called or convened.
2.8 CONSENT IN WRITING. Any action required or permitted 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 before or after the action all
the shareholders entitled to vote consent in writing.
2.9 ELECTRONIC MEETINGS. The shareholders may participate in a meeting
of the shareholders by means of conference telephone or similar
communications equipment by means, of which all persons participating in the
meeting can hear each other. Participation in a meeting pursuant to this
Section shall constitute presence in person at the meeting.
3
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ARTICLE III
BOARD OF DIRECTORS
3.1 NUMBER, TERM, AND QUALIFICATIONS. The business and affairs of the
Corporation shall be managed by its Board of Directors. The number of
Directors on the first Board of Directors shall be two (2). Thereafter, the
number of Directors of the Corporation may be changed from time to time, as
determined by the Board of Directors or shareholders of the Corporation. A
Director need not be a shareholder. Each Director shall hold office for the
term for which he is elected and until his successor shall have been elected
and qualified or until his resignation or removal.
3.2 MEETINGS. Regular meetings of the Board of Directors shall be held
either with or without notice, at such times and such places as any of the
Directors may by resolution from time to time determine. Special meetings of
the Board of Directors shall be held whenever called by the. President; or
when the President shall be required to call a special meeting upon written
request by any Director. Due notice of any special meeting, which may be
waived, shall be given by the Secretary, in writing, not later than the day
preceding the meeting. A Director's attendance at, or participation in, a
meeting constitutes a waiver of notice of the meeting, except where, at the
beginning of the meeting or upon his arrival, the Director 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. A member of the Board
or 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 hear each other. Participation
in a meeting pursuant to this method constitutes presence in person at the
meeting.
3.3 QUORUM. A majority of the members of the Board then in office, or
of the members of a committee thereof, constitutes a quorum for the
transaction of business.
3.4 VOTING. The vote of the majority of members present at a meeting
at which a quorum is present constitutes the action of the Board or of the
committee.
3.5 VACANCIES. Vacancies in the Board of Directors, including a vacancy
resulting from an increase in the number of Directors, may be filled by
either the shareholders or the Directors. If the Directors remaining in
office constitute fewer than a quorum of the Board, they may fill the vacancy
by the affirmative vote of a majority of all Directors remaining in office.
3.6 ACTION WITHOUT A MEETING. Action may be taken by the Board of
Directors or a committee thereof without a meeting if, before or after the
action, all members of the Board then in office or of the committee consent
thereto in writing. The written consent shall be filed with the minutes of
the proceedings of the Board or committee.
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3.7 REMOVAL OF DIRECTORS. 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.
3.8 ELECTRONIC MEETINGS. The Board of Directors or any committee
designated by the Board of Directors may participate in a meeting of such
Board, or committee, by means of conference telephone or similar
communications equipment by means, of which all persons participating in the
meeting can hear each other. Participation in a meeting pursuant to this
Section shall constitute presence in person at the meeting.
ARTICLE IV
OFFICERS
4.1 OFFICERS. The officers of this Corporation shall consist of a
President, a Secretary, a Treasurer, and if desired, a Chairman of the Board
and one or more Vice Presidents, who shall be elected by the Board of
Directors at the annual meeting held immediately after the adjournment of the
regular annual meeting of the shareholders. The Board of Directors may also
appoint such other officers and agents as they shall deem necessary for the
transaction of business of the Corporation. 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. Two
or more offices may be held by the same person, but an officer shall not
execute, acknowledge or verify an instrument in more than one capacity, if
the instrument is required by law, or the Articles of Incorporation, or these
Bylaws, to be executed and acknowledged or verified by two or more officers.
4.2 DUTIES OF OFFICERS. The officers of the Corporation shall be
charged with such duties and authority as usually appertains to such offices
in a Corporation, except that said duties may be varied or added to by the
Board of Directors.
4.3 REMOVAL OF OFFICERS AND AGENTS. Any officer or agent may be
removed by the Board of Directors whenever in its judgment the business
interests of the Corporation will be served thereby.
ARTICLE V
FISCAL YEAR
5.1 FISCAL YEAR. The Corporation's fiscal year shall be as determined
from time to time by the Board of Directors.
5
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ARTICLE VI
AMENDMENTS
6.1 AMENDMENTS. These Bylaws may be altered or amended by the
shareholders or the Board of Directors. Amendment of the Bylaws by the Board
requires the vote of not less than a majority of the members of the Board
then in office.
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<PAGE>
CERTIFICATE OF LIMITED PARTNERSHIP
OF
EXCEL OF TENNESSEE, L.P.
ARTICLE I
NAME
The name of the limited partnership is "Excel of Tennessee, L.P."
ARTICLE II
PARTNERSHIP'S REGISTERED OFFICE AND REGISTERED AGENT
The address of the limited partnership's registered office in Tennessee
is 2220 Helton Drive, Lawrenceburg, Tennessee 38464, in Lawrence County.
The name of the limited partnership's registered agent at such registerd
office is Joel Mow.
ARTICLE III
PRINCIPAL OFFICE
The address of the limited partnership's principal office is 2220 Helton
Drive, Lawrenceburg, Tennessee 38464.
ARTICLE IV
GENERAL PARTNER
The name and business address of the sole general partner of the limited
partnership are as follows:
Name Address
---- -------
Excel Industries of Michigan, Inc. 27335 West Eleven Mile Road
Southfield, Michigan 48034
Excel Industries of Michigan, Inc.
General Partner
By: /s/ Joseph A. Robinson
--------------------
Joseph A. Robinson
Treasurer
<PAGE>
AGREEMENT OF LIMITED PARTNERSHIP
OF
EXCEL OF TENNESSEE L.P.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I
DEFINITIONS..........................................................................5
Section 1.1 Terms Defined Herein......................................5
Section 1.2 Other Definitional Provisions.............................7
ARTICLE II
FORMATION; NAME AND PURPOSE..........................................................8
Section 2.1 Formation.................................................8
Section 2.2 Name......................................................8
Section 2.3 Business Purpose..........................................8
Section 2.4 Registered Offices and Registered Agents..................8
ARTICLE III
CAPITAL CONTRIBUTIONS AND LOANS......................................................8
Section 3.1 Capital Contributions.....................................8
Section 3.2 Capital Accounts..........................................9
Section 3.3 Capital Withdrawal Rights, Interests and Priority........11
Section 3.4 Loans by Partners........................................11
ARTICLE IV
ALLOCATIONS AND DISTRIBUTIONS.......................................................11
Section 4.1 Profits, Losses and Distributive Shares of Tax Items.....11
Section 4.2 Allocation of Income Loss and Credits....................12
Section 4.3 Section 704(c) and Revaluation Allocations...............14
Section 4.4 General Allocation Provisions............................14
Section 4.5 Non-Liquidation Cash Distribution........................14
Section 4.6 Liquidation Distributions................................14
Section 4.7 Withholding of Distributions.............................15
Section 4.8 No Priority..............................................15
Section 4.9 Tax Withholding..........................................15
Section 4.10 Reserves.................................................15
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<S> <C>
ARTICLE V
GENERAL PARTNER.....................................................................16
Section 5.1 Authorized Acts..........................................16
Section 5.2 Management of Partnership Business.......................16
Section 5.3 Business Control.........................................16
Section 5.4 Transfer or Withdrawal by General Partners...............16
Section 5.5 Admission of Additional General Partners.................17
Section 5.6 Indemnification..........................................17
Section 5.7 Restrictions on General Partner's Authority..............17
ARTICLE VI
LIMITED PARTNERS....................................................................18
Section 6.1 Authority of Limited Partners............................18
Section 6.2 Voting Rights............................................18
Section 6.3 Restrictions on Transfer.................................18
Section 6.4 Substitute Limited Partners..............................18
Section 6.5 Assignees................................................18
ARTICLE VII
TERM AND DISSOLUTION................................................................19
ARTICLE VIII
ACCOUNTING AND BANK ACCOUNTS........................................................20
Section 8.1 Fiscal Year and Accounting Method........................20
Section 8.2 Books and Records........................................20
Section 8.3 Financial Reports........................................20
Section 8.4 Tax Returns and Elections; Tax Matters Partner...........20
Section 8.5 Section 754 Election.....................................21
Section 8.6 Negotiable Instruments, Deeds, Contracts and Shares......21
ARTICLE IX
MISCELLANEOUS.......................................................................21
Section 9.1 Title to Assets..........................................21
Section 9.2 Nature of Interest in the Partnership....................22
Section 9.3 Organizational Expenses..................................22
Section 9.4 No Third Party Rights....................................22
Section 9.5 Entire Agreement; Amendment..............................22
Section 9.6 Amendment to Certificate.................................22
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<S> <C>
Section 9.7 Severability.............................................22
Section 9.8 Binding Agreement........................................22
Section 9.9 Governing Law............................................22
Section 9.10 Headings.................................................23
Section 9.11 Counterparts.............................................24
</TABLE>
iii
<PAGE>
AGREEMENT OF LIMITED PARTNERSHIP
OF
EXCEL OF TENNESSEE, L.P.
THIS AGREEMENT OF LIMITED PARTNERSHIP is made and entered into as of
the 20th day of December, 1996, by and between Excel Industries of Michigan,
Inc., a Michigan corporation, as general partner (the "General Partner"), and
X.E. Co., a Michigan corporation, as limited partner (the "Limited Partner")
WHEREAS, the parties hereto desire to form and operate a limited
partnership under the laws of the State of Tennessee and the terms and
conditions recited herein;
NOW, THEREFORE, it is hereby agreed as follows:
ARTICLE I
DEFINITIONS
Section 1.1 TERMS DEFINED HEREIN
As used herein, te following defined terms shall have the following
meanings, unless the context otherwise specifies:
"ACT" means the Revised Uniform Limited Partnership Act as adopted
by the State of Tennessee, TENN. CODE ANN. Section 61-2-101 ET SEQ., and any
successor statute.
"AGREEMENT" means this Agreement of Limited Partnership, as amended and
in effect from time to time.
"AGREEMENT" means the aggregate amount of cash on hand or in bank,
money market or similar accounts of the Partnership from time to time derived
from any source (other than Capital Contributions and Liquidation Proceeds)
which the General Partner determines is available for distribution to the
Partners after taking into account any amount required or appropriate to
maintain a reasonable amount of Reserves.
"CAPITAL ACCOUNT" means the separate account established and
maintained for each Partner by the Partnership pursuant to Section 3.2.
"CAPITAL CONTRIBUTION", with respect to a Partner, means the total
amount of cash and the fair value of property contributed by such Partner (or
such Partner's predecessor in interest) to the capital of the Partnership. The
initial Capital Contribution of each Partner pursuant to Section 3.1 hereof
<PAGE>
is set forth on SCHEDULE A attached hereto, which schedule shall be amended from
time to time to reflect any additional Capital Contributions.
"CERTIFICATE" " means the Certificate of Limited Partnership as filed
with the Secretary of State of Tennessee, as amended from time to time.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, or corresponding provisions of future laws.
"CREDIT" means all tax credits allowed by the Code with respect to
activities of the Partnership or the Property.
"FAIR VALUE" of an asset means its fair market value.
"GENERAL PARTNER" means any Person designated as a General Partner in
the Schedule or any Person who becomes a General Partner as provided herein.
"INCOME" AND "LOSS" mean, respectively, for each fiscal year or
other period, an amount equal to the Partnership's taxable income or loss for
such year or period, determined in accordance with Code Section 703(a),
except that for this purpose (i) all items of income, gain, deduction or loss
required to be separately stated by Code Section 703(a)(1) shall be included
in taxable income or loss; (ii) tax exempt income shall be added to taxable
income or loss; (iii) any expenditures described in Code Section 705(a)(2)(B)
(or treated as Code Section 705(a)(2)(B) expenditures pursuant to Treasury
Regulation Section 1.704-1 (b)(2)(iv)(i)) and not otherwise taken into
account in computing taxable income or loss shall be subtracted; and (iv)
taxable income or loss shall be adjusted to reflect any item of income or
loss specifically allocated in Article IV hereof.
"INTEREST" refers to all of a Partner's rights and interests in the
Partnership in the Partner's capacity as a Partner, all as provided in the
Certificate, this Agreement and the Act including, without limitation, such
Partner's interest in the total capital, profits and losses of the Partnership.
"LIMITED PARTNER" means any Person designated as a Limited Partner in
the Schedule or any Person who becomes a Limited Partner as provided herein.
"LIQUIDATION" shall have the meaning set forth in Treasury Regulation
Section 1.704(b)(2)(iI)(g) and any amendatory or successor Section of such
Regulation.
"LIQUIDATION PROCEEDS" means the proceeds from the sale of any Property
and all Property at the time of liquidation of the Partnership and all Proceeds
thereof, including, without limitation, the receipt of a note or other
instrument providing for installment payments.
"PARTNER" means any General Partner or Limited Partner.
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"PARTNERSHIP" means the limited partnership formed in accordance with
this Agreement by the parties hereto, as said Agreement may from time to time be
construed and amended.
"PERCENTAGE INTEREST" means the portion or share from time to time
which a Partner shares in the Partnership's Income, Losses, and Credits. The
initial Percentage Interests of the Partners are set forth on SCHEDULE A
attached hereto. SCHEDULE A shall be amended from time to time to reflect any
changes in such Percentage Interests of the Partners.
"PROPERTY" means all properties and assets in which the Partnership may
have an interest or own from time to time.
"RESERVES" means amount set aside from time to time by the General
Partner pursuant to Section 4.10 hereof.
"REVALUATION" shall mean the occurrence of any event described in
clause (x), (y) or (z) of Section 3.2 hereof in which the book basis of Property
is adjusted to its Fair Value.
'SCHEDULE" means SCHEDULE A annexed hereto as amended from time to time
and as so amended at the time of reference thereto.
"TAX MATTERS PARTNER" has the meaning set forth in Section 8.4 hereof.
"TREASURY REGULATIONS" means the final and temporary regulations
promulgated by the United States Treasury Department pursuant to the Code, as
such regulations are amended and in effect from time to time.
"WITHDRAWAL" means, with respect to the General Partner, the General
Partner's ceasing to be a general partner upon the occurrence of any of the
events specified in TENN. CODE ANN. Section 61-2-402(a).
Section 1.2 OTHER DEFINITIONAL PROVISIONS
(a) As used in this Agreement, accounting terms not defined in
this Agreement, and accounting terms partly defined to the extent not
defined, shall have the respective meanings given to them under
generally accepted accounting principles.
(b) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement, and section, subsection, schedule and exhibit references are
to this Agreement unless otherwise specified.
3
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(c) Words of the masculine gender shall be deemed to include
the feminine or neuter genders, and vice versa, where applicable. Words
of the singular number shall be deemed to include the plural number,
and vice versa, where applicable.
ARTICLE II
FORMATION; NAME AND PURPOSE
Section 2.1 FORMATION
The parties hereby agree to form a limited partnership pursuant to the
provisions of the Act and this Agreement.
Section 2.2 NAME
The name of the Partnership shall be "Excel of Tennessee, L.P."
Section 2.3 BUSINESS PURPOSE
The purpose of the Partnership is (1) to own and operate that certain
manufacturing facility which produces encapsulated window assemblies for the
automotive industry located in Lawrenceburg, Tennessee and to carry on all
businesses and activities related or ancillary thereto and (ii) to carry on such
other businesses permitted under the Act as the Partners shall determine from
time to time.
Section 2.4 REGISTERED OFFICES AND REGISTERED AGENTS
(a) TENNESSEE. The registered office of the Partnership in
Tennessee is 2220 Helton Drive, Lawrenceburg, Tennessee 38464. The
registered agent for the Partnership at such office shall be Joel Mow.
The General Partner may, in its discretion, change the Partnership's
registered office or registered agent in Tennessee, PROVIDED THAT the
appropriate form of notice is filed with the Tennessee Secretary of
State.
(b) OTHER OFFICES AND REGISTERED AGENTS. The Partnership may
have other offices at other places within or without Tennessee as the
General Partner may determine.
4
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ARTICLE III
CAPITAL CONTRIBUTIONS AND LOANS
Section 3.1 CAPITAL CONTRIBUTIONS
Simultaneously with the execution of this Agreement, each Partner shall
contribute to the Partnership such Partner's initial Capital Contribution as set
forth on SCHEDULE A for that Partner. Each Partner's initial Capital
Contribution shall be treated for purposes of this Agreement as having been made
on the effective date of this Agreement. The Partners agree that as of the date
of this Agreement (and after the foregoing initial Capital Contributions) they
are allocated the Percentage Interests in the Partnership set forth on SCHEDULE
A attached hereto. The Percentage Interests of the Partners may not be changed
or altered except pursuant to the terms and conditions of this Agreement or as
the Partners shall otherwise unanimously agree in writing. Capital Contributions
subsequent to the initial Capital Contributions shall be reflected by
appropriate amendments to SCHEDULE A.
Section 3.2 CAPITAL ACCOUNTS
A separate Capital Account shall be maintained for each Partner. Each
Partner's Capital Account shall be equal to such Partner's initial Capital
Contribution, as provided in Section 3.1 hereof. Thereafter, each Partner's
Capital Account shall be: (i) increased by (a) the amount of money contributed
by such Partner, (b) the Fair Value of property contributed by such Partner (net
of liabilities secured by such contributed property that the Partnership is
considered to assume or take subject to under Code Section 752), (c) allocations
to such Partner, pursuant to Article IV, of Partnership income or gain (or items
thereof), and (d) to the extent not already netted out under clause (ii)(b)
below, the amount of any Partnership liabilities assumed by the Partner or which
are secured by any property distributed to such Partner; and (ii) decreased by
(a) the amount of money distributed to such Partner, (b) the Fair Value of
property distributed to such Partner (net of liabilities secured by such
distributed property that such Partner is considered to assume or take subject
to under Code Section 752), (c) allocations to such Partner, pursuant to Article
IV, of Partnership loss or deduction (or items thereof), and (d) to the extent
not already netted out under clause (i)(b) above, the amount of any liabilities
of the Partner assumed by the Partnership or which are secured by any property
contributed by such Partner to the Partnership.
In the event any Interest is transferred in accordance with the terms
of this Agreement, the transferee shall succeed to the Capital Account of the
Transferor to the extent it related to the transferred Interest.
In the event of (x) an additional Capital Contribution by an existing
or an additional Partner of more than a de minimis amount which results in a
shift in Interests, (y) the distribution by the Partnership to a Partner of more
than a de minimis amount of property as consideration for an
5
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Interest, or (z) the liquidation of the Partnership within the meaning of
Treasury Regulation Section 1.704- 1 (b)(2)(ii) (g), the book basis of the
Property shall be adjusted to Fair Value and the Capital Accounts of' all the
Partners shall be adjusted simultaneously to reflect the aggregate net
adjustment to book basis as if the Partnership recognized gain and loss equal
to the amount of such aggregate net adjustment; PROVIDED HOWEVER that the
adjustments resulting from clause (x) or (y) above shall be made only if the
Partners determine that such adjustments are necessary or appropriate to
reflect the relative economic interests of the Partners.
In the event that Property is subject io Code Section 704(c) or is
revalued on the books of the Partnership in accordance with the preceding
paragraph pursuant to Section 1.704-1(b)(2)(iv)(f) of the Treasury Regulations,
the Partners' Capital Accounts shall be adjusted in accordance with Section
1.704-1(b)(2)(iv)(g) of the Treasury Regulations for allocations to the Partners
of depreciation, amortization and gain or loss, as computed for book purposes
(and not tax purposes) with respect to such property.
The foregoing provisions of this Section 3.2 and the other provisions
of this Agreement relating to the maintenance of Capital Accounts are intended
to comply with Treasury Regulation Section 1.704-1(b) and 1.704-2, and shall be
interpreted and applied in a manner consistent with such Treasury Regulations.
In the event the General Partner determines that it is prudent or advisable to
modify the manner in which the Capital Accounts or any increases or decreases
thereto, are computed in order to comply with such Treasury Regulations, the
General Partner may cause such modification to be made, provided that it is not
likely to have a material effect on the amounts distributable to any Partner
upon the dissolution of the Partnership.
Section 3.3 CAPITAL WITHDRAWAL RIGHTS, INTERESTS AND PRIORITY
Except as expressly provided in this Agreement, no Partner shall be
entitled to (i) withdraw or reduce such Partner's Capital Account, (ii) receive
any distributions from the Partnership, or (ii) withdraw or- receive property
other than cash in return for such Partner's Capital Contribution. No Partner
shall be entitled to receive or be credited with any interest on the balance in
such Partner's Capital Account at any time. Except as may be otherwise expressly
provided herein, no Partner shall have Priority over any other Partner as to the
return of the balance in such Partner's Capital Account.
Section 3.4 LOANS BY PARTNERS
Any Partner may make a loan to the Partnership in such amounts, at such
times and on such terms and conditions as may be approved by the General
Partner. Loans by any Partner to the Partnership shall not be considered as
contributions to the capital of the Partnership.
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ARTICLE IV
ALLOCATIONS AND DISTRIBUTIONS
Section 4.1 PROFITS, LOSSES AND DISTRIBUTIVE SHARES OF TAX ITEMS
The Partnership's Income or Loss, as the case may be, for each fiscal
year of the Partnership, as determined in accordance with such method of
accounting as may be adopted for the Partnership pursuant to Article VIII
hereof, shall be allocated to the Members for both financial accounting and
income tax purposes as set forth in this Article IV.
Section 4.2 ALLOCATION OF INCOME LOSS AND CREDITS
(a) After giving affect to the allocations set forth in
Section 4.2(b) (the 'Special Allocations"), Income, Loss and Credits
for each fiscal year shall allocated among the Partners in accordance
with their respective Percentage Interests. To the extent there is a
change in the respective Percentage Interests of the Partners during
the year, Income, Loss and Credits shall be allocated among the
pre-adjustment periods as provided in Section 4.4.
(b) (i) QUALIFIED INCOME OFFSET. Notwithstanding the
allocations provided in Section 4.2(a) and except as otherwise
provided in this Section 4.2(b), in the event that any Partner
receives an unexpected allocation of loss or deduction or an
unexpected distribution as described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6) which results in a deficit
balance in such Partner's Capital Account (after taking into account
reductions for the items set forth ii Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6)) in excess of (i) the amount
such Partner is obligated to restore., if any, and (ii) the amount
such Partner 's deemed to be obligated to restore pursuant to the
penultimate sentence of Treasury Regulation Section 1.704-2(g)(1)
and Section 1.704-2(i)(5), such Partner shall be allocated items of
gross income or gain in the amount necessary to eliminate such
excess as quickly as possible. This provision is intended to satisfy
the definition of "qualified income offset" as defined in Treasury
Regulation 1.704-1(b)(2)(ii)(d).
(ii) MINIMUM GAIN. Notwithstanding the allocations
provided in Section 4.2(a) and except as otherwise provided in this
Section 4.2(b), if there is a net decrease in "Partnership Minimum
Gain," defined below, during any fiscal year, each Partner shall be
allocated items of gross income and gain for such fiscal year and,
if necessary, for subsequent fiscal years, in an amount equal to
such Partner's share of the net decrease in such Partnership Minimum
Gain, determined in accordance with Treasury Regulation Section 1.704-
(2)(g)(2). This provision is intended to satisfy the definition of a
"minimum gain chargeback" as defined in Treasury Regulation Section
1.704-2(f), and the term "Partnership Minimum Gain" shall have the
meaning ascribed to the term "partnership minimum main" in Treasury
Regulation Section 1.704-2(d).
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(iii) GROSS INCOME ALLOCATION. Notwithstanding the
allocations provided in Section 4.2(a) and except as otherwise
provided in this Section 4.2(b), in the event any Partner has a
deficit Capital Account at the close of any fiscal year which is in
excess of the sum of (a) the amount such Partner is obligated to
restore pursuant to any provision of this Agreement and (b) the
amount such Partner is deemed to be obligated to restore pursuant to
the penultimate sentences of Treasury Regulation Section
1.704-2(g)(1) and 1.704-2(i)(5), each Partner shall be specially
allocated items of gross income and gain in the amount of such
excess as quickly as possible, provided that an allocation pursuant
to this Section is- 4.2(b)(iii) shall be made only if and to the
extent that such Partner would have a deficit Capital Account in
excess of such sum after all other allocations provided for in this
Section 4.2 have been made as if Section 4.2(b)(i) hereof and this
Section 4.2(b)(iii) were not in this Agreement.
(iv) PARTNER NONRECOURSE DEDUCTIONS AND PARTNER
NONRECOURSE DEB MINIMUM GAIN. Notwithstanding the allocation
provided for in Section 4.2(a) and 'except as otherwise provided in
this Section 4.2(b), any Partner Nonrecourse Deduction, defined as
having the meaning ascribed to the term "partner nonrecourse
deduction" in Treasury Regulation Section 1.704-2(i)(2) for any
fiscal year shall be allocated to the Partner who bears the economic
risk of loss in accordance with Treasury Regulation Section
1.704-2(i)(1), and if there is a net decrease in Partner Nonrecourse
Debt Minimum Gain during any fiscal year, exch Partner shall be
allocated items of gross income and gain for such fiscal year and,
if necessary, for subsequent fiscal years, in an amount equal to
such Partner's share of the net decrease in such Partner's
Nonrecourse Debt Minimum Gain, determined in accordance with
Treasury Regulation Section 1.704-2(i)(4). This provision is
intended to comply with the chargeback provisions of Treasury
Regulation Section 1.704-2(i)(4), and the term "Partner Nonrecourse
Debt Minimum Gain" shall have the meaning ascribed to the term
"partner nonrecourse debt minimum gain in Treasury Regulation
Section 1.704-2(i)(3).
(v) PARTNERSHIP NONRECOURSE DEDUCTIONS.
Notwithstanding the allocations provided for in Section 4.2(a) and
except as otherwise provided in this Section 4.2(b), any Partnership
Nonrecourse Deductions defined a having the meaning ascribed to the
term "Partnership Nonrecourse Deductions" in Treasury Regulation
Section 1.704-2(c), for any fiscal year shall be allocated to the
Partners in accordance with their Percentage Interests as provided
under Treasury Regulation Section 1.704-2(c)
(vi) LIMITATION ON LOSS ALLOCATIONS. The Losses
allocated pursuant to Section 4.2(a) shall not exceed the maximum
amount of Losses that can be allocated without causing any Partner
to have a deficit balance in such Partner's Capital Account at the
end of any fiscal year (decreased by the amount such Partner is
obligated to restore to the Partnership and the amount such Partner
is deemed to be obligated to restore pursuant to the penultimate
sentence of Treasury Regulations Section 1.704-2(g )(1) and Section
1.704-2(i)(5), and increased by the items set forth in Treasury
Regulations Section 1-704-1 (b)(2)(ii)(d)(4), (5) or (6)). All
Losses in excess of the limitations set forth in this paragraph
shall be allocated among
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<PAGE>
the Partner or Partners, pro-rata to the extent each, respectively, is
liable, exposed or otherwise bears the economic rise of loss with
respect to any debt or other -obligation of the Partnership.
(vii) CURATIVE ALLOCATIONS. The allocation set
forth in Sections 4.2(b)(i), (ii), (iii), (iv), (v) and (vi) hereof
(the "Regulatory Allocations") are intended to comply with certain
requirements of Treasury Regulations Section 1.7( 4-1 and J Section
1.704-2. Notwithstanding any other provision of this Section 4.2
(other than Regulatory Allocations), the Regulatory Allocations
shall be taken into account in allocating Losses and Income and
items of gross income, gain and deduction among the Partners so
that, to the extent possible, the net amount of such allocations to
the Partners shall be equal to the net amount that would have been
allocated to the Partners if the Regulatory Allocations had not
occurred. Any Regulatory Allocations hereunder shall thereafter be
cured or reversed in the quickest possible time frame but in a
manner that is not in violation of the Treasury Regulation.
Section 4.3 SECTION 704(c) AND REVALUATION ALLOCATIONS.
In accordance with Code Section 704(c) and the Treasury Regulations
thereunder, income, gain, loss and deduction with respect to any property
contributed to the capital of the Partnership shall, solely for tax purposes, be
allocated among the Partners so as to take into account any variation between
the adjusted basis of such property to the Partnership for federal income tax
purposes and its Fair Value immediately after the adjustment in the same manner
as under Code Section 704(c) and the Treasury Regulations thereunder. In the
event of a Revaluation, subsequent allocations of income, gain, loss and
deduction with respect to such property shall take account of any variations
between the adjusted basis of such property to the Partnership for federal
income tax purposes and its Fair Value immediately after the adjustment in the
same manner as under Code Section 704(c) and the Treasury Regulations
thereunder. Any elections or other decisions relating to such allocations shall
be made by the General Partner in a manner that reasonably reflects the purpose
and intention of this Agreement. Allocations pursuant to this Section 4.3 are
solely for income tax purposes and shall not affect, or in any way be taken into
account in computing, for book purposes, any Partner's Capital Account or share
of income or loss, pursuant to any provision in this Agreement.
Section 4.4 GENERAL ALLOCATION PROVISIONS.
Except as otherwise provided in this Agreement, all items that are
components of net Income or net Loss shall be allocated among the Partners in
the same proportions as they share such net Income or net Loss, as the case may
be, for the year. For purposes of determining the Income, Loss or any other
items for any period, Income, Loss or any such other items shall be determined
on a daily, monthly or other basis, as determined by the General Partner using
any permissible method under the Code and the Treasury Regulations.
Section 4.5 NON-LIQUIDATION CASH DISTRIBUTION.
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This amount, if any, of Available Cash shall be reasonably determined
by the General Partner from time to time and shall be distributed to the
Partners at such times and in such amounts as reasonably determined by the
General Partners at such times and in such amounts as reasonably determined by
the General Partner, in proportion to the Partners' respective Percentage
Interests.
Section 4.6 LIQUIDATION DISTRIBUTIONS
In the event of a Liquidation, Liquidation Proceeds shall be
distributed in the following order of priority:
(a) To the payment of debts and liabilities of the Partnership
(including to Partners to the extent otherwise permitted by law) and
the expenses of liquidation; then
(b) To the settling up of such reserves as the Person required
or authorized by law to wind up the Partnership's affairs may
reasonably deem necessary or appropriate for any disputed, contingent
or unforseen liabilities or obligations of the Partnership, provided
that any such reserves shall be paid over by such person to an
independent escrow agent, to be held by such agent or its successor for
such period as such person shall deem advisable for the purpose of
applying such reserves to the payment of such liabilities or
obligations and at the expiration of such period, the balance of such
reserves, if any, shall be distributed as hereinafter provided; the:
(c) To the Partners in accordance with and to the extent of
their respective Capital Account balances, after taking into account
the allocation of all Income or Loss pursuant to this Agreement for the
fiscal year(s) in which the Partnership is liquidated and all
adjustments to the Partner's Capital Accounts pursuant to Section 3.2
hereof.
All such Liquidation distributions shall be made no later than the end of the
taxable year during which such Liquidation takes place or if later, within 90
days after the date of such Liquidation.
Section 4.7 WITHHOLDING OF DISTRIBUTIONS.
Notwithstanding any other provision of this Agreement, to the extent
not inconsistent with the Treasury Regulations promulgated under Code Section
704, the General Partner (or any Person required or authorized by law to wind up
the Partnership affairs) may suspend, reduce or otherwise restrict distributions
of Available Cash and Liquidation Proceeds when, in its sole opinion, such
action is in the best interests of the Partnership.
Section 4.8 NO PRIORITY.
Except as may be otherwise expressly provided herein, no Partner shall
have priority over any other Partner as to Partnership income, gain, los,
credits and deductions or distributions.
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Section 4.9 TAX WITHHOLDING.
Notwithstanding any other provision of this Agreement, the General
Partner is authorized to take any action that it determines to be necessary or
appropriate to cause the Partnership to comply with any withholding requirements
established under any federal, state or local tax law, including, without
limitation, withholding on any distribution to any Partner. For all purposes of
this Article IV, any amount withheld on any distribution and paid over to the
appropriate governmental body shall be treated as if such amount had in fact
been distributed to the Partner.
Section 4.10 RESERVES
The General Partner shall have the right to establish, maintain and
expend such Reserves to provide for working capital, future maintenance, repair
or replacement of the Property, debt service, future investments and such other
purposes as the general Partner may deem necessary or advisable.
ARTICLE V
GENERAL PARTNER
Section 5.1 AUTHORIZED ACTS.
Except as otherwise provided in this Agreement, the General Partner, in
the name and on behalf of the Partnership, shall have the authority to manage
the Partnership and its business and, in furtherance of same, shall have the
authority to perform all acts which the Partnership is authorized to perform.
Section 5.2 MANAGEMENT OF PARTNERSHIP BUSINESS
The business affairs of the Partnership shall be managed by the General
Partner. The General Partner shall devote such amount of its time and services,
and the time and services of its employees and agents, as, in its discretion, it
deems necessary to the proper conduct of such business affairs. Any party may
rely on any action taken by the General Partner as having been a duly-authorized
act of the Partnership.
Section 5.3 BUSINESS CONTROL.
No Limited Partner (except one who may also be the General Partner, and
then only in such Partner's capacity as General Partner) shall participate in or
having any control over the Partnership business, except as required by law.
Each Limited Partner hereby consents to the exercise by the General Partner of
the powers conferred upon it by this Agreement and to the employment, when, if
in the discretion of the General Partner, the same is deemed necessary or
advisable , of such employees, agents, attorneys or other professionals, the
General Partner may determine (notwithstanding that any parties to this
Agreement may have an interest in, or be one of, such
11
<PAGE>
employees, agents, attorneys or other professionals). No Limited Partner (except
one who may also be a General Partner, and then only in such Partner's capacity
as General Partner) shall have any authority or right to act for or bind the
Partnership.
Section 5.4 TRANSFER OR WITHDRAWAL BY GENERAL PARTNERS.
No General Partner may (i) voluntarily resign or withdraw as a General
Partner of the Partnership or (ii) transfer, sell or assign its Interest in the
Partnership without the consent of all the remaining Partners. Any transfer of
an Interest or any portion thereof of a General Partner without the consent
required under this Section 5.4 shall be treated as a Withdrawal of such General
Partner.
Section 5.5 ADMISSION OF ADDITIONAL GENERAL PARTNERS.
Additional General Partners may only be admitted to the Partnership
with the unanimous written consent of all the Partners.
Section 5.6 INDEMNIFICATION.
The Partnership shall indemnify and hold harmless the General Partner
against any claims or liability incurred by the General Partner provided that
the acts or omissions giving rise to such claims or liabilities were performed
in good faith by the General Partner in the reasonable belief that the General
Partner was acting within the scope of its authority under this Agreement.
Nothing contained in this paragraph shall be construed as imposing any liability
on any Limited Partner (except as one who may also be a General Partner, and
then only in such Partner's capacity as a General Partner).
Section 5.7 RESTRICTIONS ON GENERAL PARTNER'S AUTHORITY.
The General Partner shall not have authority to, and covenants and
agrees that it shall not, do any of the following acts without the unanimous
consent of all of the Partners:
(a) Cause or permit the Partnership to engage in any activity
that is not consistent with the business purpose of the Partnership set
forth in Section 2.3 hereof;
(b) Knowingly do any act in contravention of this Agreement;
(c) Knowingly do anything that would substantially impair the
ability of the Partnership to carry on the ordinary business of the
Partnership except as otherwise provided herein;
(d) Confess a judgment against the Partnership;
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<PAGE>
(e) Possess any Property of the Partnership or assign rights
in any Property of the Partnership, other than for Partnership
purposes;
(f) Admit any additional Partners;
(g) Sell or otherwise encumber or dispose of substantially
all of the Property of the Partnership; or
(h) Cause the Partnership to incur any indebtedness in excess
of $10,000,000.00.
ARTICLE VI
LIMITED PARTNERS
Section 6.1 AUTHORITY OF LIMITED PARTNERS
The Limited Partners shall have no authority (i) to take part in the
management or control of the Partnership or of its business or affairs or (ii)
to act for or bind the Partnership in any matter.
Section 6.2 VOTING RIGHTS
Notwithstanding the provisions of Section 6.1, the Limited Partners
shall have the right to vote on or consent to such matters as are specifically
reserved for the approval of all Partners or of the Limited partners hereunder.
Section 6.3 RESTRICTIONS ON TRANSFER
Except as permitted below and otherwise provided herein, no Limited
partner may transfer, sell, alienate, assign or otherwise dispose of all or any
part of such Limited Partner's Interest in the Partnership, whether voluntarily,
to involuntarily or by operation of law, or at judicial sale or otherwise,
without the consent of all of their remaining Partners. In the event such
consent is obtained and the transfer is effected, the transferee of such
Interest shall become a substitute Limited Partner pursuant to the provisions of
Section 6.4. In the event the transferee of an Interest of a Limited Partner is
not admitted as a substitute Limited Partner pursuant to Section 6.4, then the
provisions of Section 6.5 shall apply.
Section 6.4 SUBSTITUTE LIMITED PARTNERS
No Limited Partner shall have the right to substitute an assignee as a
substitute Limited Partner in such Limited Partner's place, unless the consent
required by Section 6.3 shall have been obtained and the provisions of this
Section 6.4 shall have been complied with. Any substitute Limited Partner shall,
as a condition of admission as a substitute Limited partner, agree to be bound
by all the provisions of this Agreement and shall execute such instrument or
instruments as shall be
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<PAGE>
required by the General Partner to signify such substitute Limited Partner's
agreement to be bound by all the provisions of this Agreement. Upon the
admission of substitute Limited Partner, the Schedule shall be amended to
reflect such admission.
Section 6.5 ASSIGNEES
An assignee of a Limited Partner who does not become a substitute
Limited Partner shall have the right to receive the same share of profits,
losses and distributions of the Partnership to which the assigning Limited
Partner would have been entitled if no such assignment had been made by such
Limited Partner. Any Limited partner who shall assign all of such Limited
Partner's Interest in the Partnership shall cease to be a Limited Partner except
that, unless and until the assignee of such Limited Partner becomes a substitute
Limited Partner, the assignor Limited Partner shall retain all the statutory
rights and be subject to all the statutory obligations of an assignor Limited
Partner, subject to the assignee's right under the preceding sentence. As
assignee of the interest of a Limited Partner who does not become a substitute
Limited Partner as provided aforesaid and who desires to make a further
assignment of such assignee's Interest shall be subject to all the provisions of
this Article VI to the same extent and in the same manner as any Limited Partner
desiring to make an assignment of such Limited Partner's Interest.
ARTICLE VII
TERM AND DISSOLUTION
The Partnership shall continue in full force and effect until December
31, 2026, except that the Partnership shall be dissolved prior to such date upon
the happening of any of the following events:
(a) the sale or other disposition of all or substantially
all of the assets of the Partnership;
(b) the unanimous vote of the Partnership to dissolve;
(c) the happening of any event, other than a Withdrawal of a
General Partner, that causes a dissolution of the Partnership under the
Act; or
(d) the Withdrawal of a General Partner, unless (i) at the
time of such withdrawal there is at least one remaining General Partner
and all such General Partners agree to continue the business of the
Partnership (which continuation of the business of the Partnership
(which continuation of the business of the Partnership is hereby
authorized) or (ii) within ninety (90) days after such Withdrawal all
remaining partners agree in writing to continue the business of the
Partnership and agree in writing to the appointment of one (1) or more
additional General Partners, if necessary or desired.
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Upon a Withdrawal of a General Partner who is the Sole General Partner
under clause (d) above, the Property of the Partnership shall be transferred
from the withdrawing General Partner to a Person who shall act as a liquidating
trustee and: (A) hold the Property during the winding up of the business of the
Partnership if no agreement in writing to continue the business of the
Partnership and to admit one (1) or more additional General Partners is made by
the remaining Partners under clause (d)(ii) above or (B) transfer the Property
to such additional General Partner(s) as are admitted under clause (d)(ii) upon
their admission.
ARTICLE VIII
ACCOUNTING AND BANK ACCOUNTS
Section 8.1 FISCAL YEAR AND ACCOUNTING METHOD
The fiscal year and taxable year of the Partnership shall be a 52-53
week year ending on the last Saturday in December. The accrual method of
accounting shall be used by the Partnership.
Section 8.2 BOOKS AND RECORDS
At all times during the existence of the Partnership, the Partnership
shall cause to be maintained full and accurate books of account, which shall
reflect all Partnership transactions and be appropriate and adequate for the
Partnership's business. The books and records of the Partnership shall be
maintained at the offices of the Partnership where the General Partner perform
its primary duties hereunder. Copies of such books and records shall be provided
from time to time to teach of the Partners upon reasonable written request. In
addition, each Partner (or such Partner's designated representative) shall have
the right during ordinary business hours and upon reasonable notice to inspect
and copy (at such Partner's own expense) all books and records of the
Partnership.
Section 8.3 FINANCIAL REPORTS
(a) After the end of each fiscal year, a balance sheet of the
Partnership as of the end of the such year and related financial
statements for the year then ended shall be delivered to each Partner.
(b) After the end of each fiscal year, all information with
respect to the Partnership necessary for the Partners' federal and
state income tax returns and a copy of the Partnership's federal and
state income tax returns shall be delivered to each Partner.
Section 8.4 TAX RETURNS AND ELECTIONS; TAX MATTERS PARTNER
The Partnership shall cause to be prepared and timely filed all
federal, state and local income tax returns or other returns or statements
required by applicable law. The Partnership shall claim
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<PAGE>
all deductions and make such elections for federal or state income tax purposes
which the General Partner reasonably believes will produce the most favorable
tax results for the Partners. Excel Industries of Michigan, Inc. is hereby
designated as the Partnership's "Tax Matters Partner," who shall act as the
Partnership's tax matters partner," as defined in the Code, and in such capacity
is hereby authorized and empowered to act for and represent the Partnership and
each of the Partners before (i) the Internal Revenue Service (the "Service") in
any audit or examination of any Partnership tax return, and (ii) any court
selected by the Partners for judicial review of any adjustment assessed by the
Service. Excel Industries of Michigan, Inc. does hereby accept such designation.
Each of the Partners by execution of this Agreement consents and agrees to
become bound by all actions of the Partner acting as Tax Matters Partner,
including any contest, settlement or obligation or position which the Tax
Matters Partner may deem proper under the circumstances. The Partners
specifically acknowledge, without limiting the general applicability of this
Section, that the Tax Matters Partner shall not be liable, responsible or
accountable in damages or otherwise to the Partnership or any Partner with
respect to any action taken by such partner in its capacity as the Tax Matters
Partner, provided it used reasonable business judgment with respect to the
action taken. All out-of-pocket expenses incurred by the Tax Matters Partner in
its capacity as the Tax Matters Partner shall be considered expenses of the
Partnership for which the Tax Matters Partner shall be entitled to full
reimbursement.
Section 8.5 SECTION 754 ELECTION
In the event (i) a distribution of Partnership assets occurs which
satisfies the provisions of Section 734 of the Code, or (ii) a transfer of an
Interest occurs which satisfies the provisions of Section 743 of the Code, upon
the determination of the General Partner, the Partnership shall elect, pursuant
to Section 754 of the Code, to adjust the basis of the Partnership's property to
the extent allowed by such Section 734 or 743 and shall cause such adjustments
to be made and maintained.
Section 8.6 NEGOTIABLE INSTRUMENTS, DEEDS, CONTRACTS AND SHARES
(a) EXECUTION OF NEGOTIABLE INSTRUMENTS. All checks, drafts,
notes, bonds bills of exchange and orders for the payment of money of
the Partnership shall be signed by the General Partner or any Person
authorized by the General Partner from time to time.
(b) EXECUTION OF DEEDS, CONTRACTS, ETC. All deeds and
mortgages made by the Partnership and other material written contracts
and agreements into which the Partnership enters other than
transactions in the ordinary course of business shall be executed in
its name by the General Partner.
ARTICLE IX
MISCELLANEOUS
Section 9.1 TITLE TO ASSETS
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Title to the Property and all other assets acquired by the Partnership
shall be held in the name of the Partnership. No Partner shall individually have
any ownership interest or rights in the Property or any other assets of the
Partnership, except directly by virtue of such Partnership's ownership of an
Interest. No Partnership shall have any right to seek or obtain a partition of
the Property or other assets of the Partnership nor shall any Partner have the
right to any specific assets of the Partnership upon the liquidation of or any
distribution from the Partnership.
Section 9.2 NATURE OF INTEREST IN THE PARTNERSHIP
A Partner's Interest shall be personal property for all purposes.
Section 9.3 ORGANIZATIONAL EXPENSES
The Partnership shall pay the expenses incurred in connection with the
creation and formation of the Partnership.
Section 9.4 NO THIRD PARTY RIGHTS
None of the provisions contained in this Agreement shall be for the
benefit of or enforceable by any third parties, including creditors of the
Partnership.
Section 9.5 ENTIRE AGREEMENT; AMENDMENT
This Agreement (together with the Certificate contains the entire
agreement among the Partners relative to the formation,, operation and
continuation of the Partnership. Except as otherwise expressly provided
elsewhere in this Agreement, this Agreement and the Certificate shall not be
altered, modified or changed except by a written document duly executed by all
Partners at the time of such alteration, modification or change.
Section 9.6 AMENDMENT TO CERTIFICATE
Each Partner appoints the General Partner, acting through an authorized
officer thereof, as its agent for the purpose of executing all certificates of
amendment, restatement, or cancellation to the Certificate which are approved as
provided in this Agreement or which are required to be filed with the Tennessee
Secretary of State pursuant to the Act.
Section 9.7 SEVERABILITY
In the event any provision of this Agreement is held to be illegal,
invalid or unenforceable to any extent, the legality and enforceability of the
remainder of this Agreement shall not be affected thereby and shall remain in
full force and effect and be enforced to the greatest extent permitted by law.
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Section 9.8 BINDING AGREEMENT
Subject to the restrictions on the disposition of Interests herein
contained, the provisions of this Agreement shall be binding upon, and inure to
the benefit of, the parties hereto and their respective heirs, personal
representatives, successors and permitted assigns.
Section 9.9 GOVERNING LAW
This Agreement shall be governed by and construe in accordance with the
laws of the State of Tennessee, without regard to the principles of conflicts of
law thereof.
Section 9.10 HEADINGS
The headings of the Articles and Sections of this Agreement are for
convenience only and shall not be considered in construing or interpreting any
of the terms or provisions hereof.
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Section 9.11 COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original and all of which shall constitute one
agreement that is binding upon all of the parties hereto, notwithstanding that
all parties are not signatories to the same counterpart.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
GENERAL PARTNER
Excel Industries of Michigan, Inc.
By:_________________________________
/S/ Joseph A. Robinson
Treasurer
LIMITED PARTNER
X.E. Co.
By:_________________________________
/S/ Joseph A. Robinson
Treasurer
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SCHEDULE A
<TABLE>
<CAPTION>
CAPITAL CONTRIBUTOR PERCENTAGE INTEREST
------------------- -----------------------
<S> <C> <C>
Excel Industries of Michigan, Inc. $ 10.00 1%, as General Partner
X.E. Co. $ 990.00 99%, as Limited Partner
</TABLE>
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Corporate Certificate No. 151
(Sept. 1969)
STATE OF INDIANA
OFFICE OF THE SECRETARY OF STATE
CERTIFICATE OF INCORPORATION
OF
ELEVEN TWENTY N. MAIN STREET CORPORATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
I, LARRY A. CONRAD, SECRETARY OF STATE OF THE STATE OF INDIANA, HEREBY
CERTIFY THAT ARTICLES OF INCORPORATION OF THE ABOVE CORPORATION, IN THE FORM
PRESCRIBED BY MY OFFICE, PREPARED AND SIGNED IN DUPLICATE BY THE
INCORPORATOR(S), AND ACKNOWLEDGED AND VERIFIED BY THE SAME BEFORE A NOTARY
PUBLIC, HAVE BEEN PRESENTED TO ME AT MY OFFICE ACCOMPANIED BY THE FEES
PRESCRIBED BY LAW; THAT I HAVE FOUND SUCH ARTICLES CONFORM TO LAW; THAT I
HAVE ENDORSED MY APPROVAL UPON THE DUPLICATE COPIES OF SUCH ARTICLES; THAT
ALL FEES HAVE BEEN PAID AS REQUIRED BY LAW; THAT ONE COPY OF SUCH ARTICLES
HAS BEEN FILED IN MY OFFICE; AND THAT THE REMAINING COPY OF SUCH ARTICLES
BEARING THE ENDORSEMENT OF MY APPROVAL AND FILING HAS BEEN RETURNED BY ME TO
THE INCORPORATOR(S) OR HIS (THEIR) REPRESENTATIVES; ALL AS PRESCRIBED BY THE
PROVISIONS OF THE INDIANA GENERAL CORPORATION ACT, AS AMENDED.
WHEREFORE, I HEREBY ISSUE TO SUCH CORPORATION THIS CERTIFICATE OF
INCORPORATION, AND FURTHER CERTIFY THAT ITS CORPORATE EXISTENCE HAS BEGUN.
IN WITNESS WHEREOF, I HAVE HEREUNTO SET MY HAND AND AFFIXED
THE SEAL OF THE STATE OF INDIANA, AT THE CITY OF
INDIANAPOLIS, THIS 23rd DAY OF September, 1971
[SEAL]
------------------------------------------------
LARRY A. CONRAD, SECRETARY OF STATE.
BY
----------------------------------------------
DEPUTY
<PAGE>
Corporate Form No. 101 (Sept. 1969)--Page one
ARTICLES OF INCORPORATION
William N. Salin, Secretary of State of Indiana
Use White Paper--Size 8 1/2 x 11--For Inserts
APPROVED Filing Requirements--Present 2 Executed Copies
AND to Secretary of State, Room 155, State House
FILED Indianapolis 46204
SEP 23, 1971
Larry Conrad Recording Requirements--Recording of Articles of
SECRETARY OF Incorporation is no longer required by the
STATE OF INDIANA Indiana General Corporation Act.
ARTICLES OF INCORPORATION
OF
ELEVEN TWENTY N. MAIN STREET CORPORATION
- --------------------------------------------------------------------------------
The undersigned incorporator or incorporators, desiring to form a
corporation (hereinafter referred to as the "Corporation") pursuant to the
provisions of the Indiana General Corporation Act, as amended (hereinafter
referred to as the "Act,") execute the following Articles of Incorporation.
ARTICLE I
NAME
The name of the Corporation is Eleven Twenty N. Main Street Corporation.
- -------------------------------------------------------------------------------
ARTICLE II
PURPOSES
The purposes for which the Corporation is formed are:
(a) To manufacture, produce, buy, purchase, acquire, sell, deal in
and otherwise dispose of railway specialties, parts, accessories, and
supplies for automobiles, automobile trucks, automobile tractors, railway
cars and coaches, boats, steamers and steamships, and all other kinds of
goods, wares and merchandise of every character and description.
<PAGE>
Page One
(b) To manufacture, produce, buy, purchase, acquire, sell, deal in
or otherwise dispose of materials, supplies, machinery, tools, fixtures and
accessories, used or useful in carrying on any of the purposes set out and
described herein.
(c) To apply for, obtain, purchase, lease, register, or otherwise
acquire, and to take hold, use, develop, sell, assign, or otherwise dispose
of, trade marks, trade names, letters patent, patent rights, improvements,
processes, methods, copyrights, formulae, designs, brands, and labels of the
United States or any other country or government, used in connection with,
related to or bearing upon any of the goods, wares or merchandise dealt in by
this corporation or in which this corporation may desire to deal, and to use
exercise, accept licenses for and grant licenses on or in respect to any of
said trade marks, trade names, letters patent, patent rights, improvements,
processes, methods, copyrights, formulae, designs, brands and labels of the
United States or any other country or government, used in connection with,
related to or bearing upon any of the goods, wares or merchandise dealt in by
this corporation or in which this corporation may desire to deal.
(d) To purchase or otherwise acquire, and to hold, own, maintain
work, develop, sell, lease, convey, mortgage or otherwise dispose of lands
and leaseholds and any interest, estate or rights in real property which may
be required, convenient or appropriate for carrying on any of the business or
corporate objects herein set out.
(e) To acquire by purchase, subscription or otherwise, and to own,
hold, sell, assign, deal in, exchange, transfer, mortgage, pledge or
otherwise dispose of any shares of the capital stock, bonds, mortgages,
securities or evidence of indebtedness, issued or created by any other
domestic or foreign corporation, and to issue in payment or exchange
therefor, shares of the capital stock, bonds, securities or other obligations
of this corporation.
(f) To guarantee the payment of and to pay the dividends, debts,
liabilities or obligations of any corporation, domestic or foreign, in which
this corporation may own any of the shares of the capital stock, bonds,
mortgages, securities or evidences of indebtedness.
(g) To borrow money and to make, accept, endorse, transfer,
assign, execute and issue bonds, promissory notes, debentures, and all other
evidences of indebtedness, for the purpose of securing any of its obligations
or contracts, upon such terms and conditions as the Board of Directors shall
authorize and as may be permitted by law.
<PAGE>
Page One
(h) To acquire, hold, deal in, sell, transfer, cancel or otherwise
dispose of any shares of its own capital stock, provided however, that the
use of the funds of this corporation for any of said purposes, shall not
impair its capital.
(i) To buy, purchase or otherwise acquire, the whole or any part
of the property, assets, business and good will of any other person, firm or
corporation, and to conduct the said business so acquired, and to issue
shares of its capital stock, or its promissory notes, bonds, debentures, or
other evidences of indebtedness, in payment therefor.
(j) To do all and everything necessary, suitable and proper for
the accomplishment of any of the purposes or the attainment of any of the
objects or the furtherance of any of the powers hereinbefore set forth,
either alone or in association with other corporations, firms or individuals,
and to do every other thing or things, act or acts, incidental or appurtenant
to or growing out of or connected with the aforesaid business, or powers or
any part or parts thereof, provided the same be not inconsistent with or in
violation of the laws under which this corporation is organized.
(k) To have and to exercise any and all of the powers and
privileges now or hereafter conferred by the laws of the State of Indiana,
upon corporations formed or organized under the Act hereinbefore referred to,
or under any act amendatory thereof, supplemental thereto or substituted
therefor.
(l) To make direct loans to any corporation organized under the
laws of any of the states of the United States or under the laws of the
Dominion of Canada, provided that, at the time each loan is made, this
corporation owns shares of the capital stock of the corporation to which said
loan is made.
<PAGE> Corporate Form No. 101--Page Two
Prescribed by William N. Salin,
Secretary of State (Sep. 1969)
ARTICLE III
PERIOD OF EXISTENCE
The period during which the Corporation shall continue is perpetual
ARTICLE IV
RESIDENT AGENT AND PRINCIPAL OFFICE
SECTION 1. RESIDENT AGENT. The name and address of the Resident Agent in
charge of the Corporation's principal office is David L. Rutter
------------------------------
(Name)
1120 N. Main Street Elkhart Indiana 46514
- ------------------------------------------------------------------------------
(Number and Street or Building) (City) (State) (Zip Code)
SECTION 2. PRINCIPAL OFFICE. The post office address of the principal
office of the Corporation is 1120 N. Main Street
--------------------------------------
(Number and Street or Building)
Elkhart Indiana 46514
- ---------------------------------------------------
(City) (State) (Zip Code)
ARTICLE V
SHARES
SECTION 1. NUMBER. The total number of shares which the Corporation has
authority to issue is 1,000 shares consisting of 1,000 shares with the par value
of $1.00 per shares, and no shares without par value.
SECTION 2. TERMS. The total number of shares into which the authorized
capital stock of this Corporation shall be divided is 1,000, consisting of 1,000
shares of One Dollar ($1.00) Par Value Common Stock and the Corporation shall
have no other class of stock.
<PAGE> Corporate Form No. 101--Page three
Prescribed by William N. Salin,
Secretary of State (Sep. 1969)
ARTICLE VI
REQUIREMENTS PRIOR TO DOING BUSINESS
The Corporation will not commence business until consideration of the value
of at least $1,000.00 (one thousand dollars) has been received for the issuance
of shares.
ARTICLE VII
DIRECTOR(S)
SECTION 1. NUMBER OF DIRECTORS. The initial Board of Directors is
composed of 11 members. The number of directors may be from time to time fixed
by the By-Laws of the Corporation at any number. In the absence of a By-Law
fixing the number of directors, the number shall be 11.
SECTION 2. NAMES AND POST OFFICE ADDRESSES OF THE DIRECTORS. The names
and post office addresses of the initial Board of Directors of the Corporation
are:
<TABLE>
<CAPTION>
NAME NUMBER AND STREET OR BUILDING CITY STATE ZIP CODE
---- ----------------------------- ----------- -------- --------
<S> <C> <C> <C> <C>
G. Wm. Anderson #4 Edgewater Place Elkhart, Indiana 46514
Harold Edwards, Jr. 208 Sedgwick Drive Syracuse, New York 13203
Oliver M. Edwards, III Apdo 1144 Cuernavaca, Mor., Mexico
Ernest W. Fear 58 Fairway Drive Aurora, Ontario, Canada
Richard E. Flanders 2997 Brockton Court Mishawaka, Indiana 46544
Thomas W. Holt, Jr. Greenleaf Apts. #109
107 Greenleaf Blvd. Elkhart, Indiana 46514
James A. McGrann 230 Larsen Avenue Elkhart, Indiana 46514
James L. Piety 1605 Springbrook Drive Elkhart, Indiana 46514
Harold E. Ruppert 3400 Wood Street Elkhart, Indiana 46514
David L. Rutter 443 So. West Blvd. Elkhart, Indiana 46514
John R. Wiley 1616 Springbrook Drive Elkhart, Indiana 46514
</TABLE>
SECTION 3. QUALIFICATIONS OF DIRECTORS. (IF ANY)
A Director need not be a shareholder of the Corporation.
<PAGE> Corporate Form No. 101--Page Four
Prescribed by William N. Salin,
Secretary of State (Sep. 1969)
ARTICLE VIII
INCORPORATOR(S)
The names and post office addresses of the incorporators of the Corporation
are:
<TABLE>
<CAPTION>
NAME NUMBER & STREET OR BLDG. CITY STATE ZIP CODE
---- ------------------------ ---- ----- --------
<S> <C> <C> <C> <C>
David L. Rutter 443 So. West Blvd. Elkhart Indiana 46514
John R. Wiley 1616 Springbrook Drive Elkhart Indiana 46514
Thomas V. Happer 2930 Oak Manor Drive Elkhart Indiana 46514
</TABLE>
ARTICLE IX
PROVISIONS FOR REGULATION OF BUSINESS
AND CONDUCT OF AFFAIRS OF CORPORATION
(a) This Corporation shall have power to carry on and conduct its
business, or any part thereof, and to have one or more offices in the State of
Indiana, and in the various other states, territories, colonies, and
dependencies of the United States, in the District of Columbia, and in any
foreign country.
(b) This Corporation reserves the right to alter, amend, change or repeal
any provision contained in its Articles of Incorporation, and in all amendments
thereto, in the manner now or hereafter prescribed by Statute, and all rights
granted and conferred on the shareholders of this Corporation are granted and
conferred subject to this reservation.
(c) This Corporation reserves the right to take advantage of the
provisions of any amendment to the law under which it is organized, or of any
new law applicable or relating to corporations formed, organized, or
re-organized under the law now in force, which may hereafter be enacted, and
all rights granted to, and conferred on, the shareholders of this Corporation
are granted and conferred subject to this reservation.
(d) Annual or special meetings of the shareholders of this Corporation
may be held at any place either within or without the State of Indiana.
<PAGE>
Page Four
(e) The Board of Directors of this Corporation shall have the power to
declare and pay a dividend consisting of shares of its One Dollar ($1.00) Par
Value Common Stock to the holders of its shares of One Dollar ($1.00) Par Value
Common Stock.
(f) All transfers of stock of this Corporation shall be made upon its
books by the holder thereof in person or by his duly appointed representative
upon surrender of the certificate for cancellation. No transfer of stock shall
be made on the day fixed for paying a dividend or for holding a meeting of
shareholders, or within ten (10) days next preceding said day.
<PAGE> Corporate Form No. 101--Page Five
Prescribed by William N. Salin,
Secretary of State (Sep. 1969)
IN WITNESS WHEREOF, the undersigned, being the incorporator(s) designated
in Article VIII, execute these Articles of Incorporation and certify to the
truth of the facts herein stated, this 22nd day of September, 1971.
/s/ David L. Rutter /s/ John R. Wiley
- ------------------------------- ---------------------------------
(Written Signature) (Written Signature)
David L. Rutter John R. Wiley
- ------------------------------- ----------------------------------
(Printed Signature) (Printed Signature)
/s/ Thomas V. Happer
----------------------------------
(Written Signature)
Thomas V. Happer
----------------------------------
(Printed Signature)
STATE OF INDIANA )
)ss.
COUNTY OF ELKHART )
I, the undersigned, a Notary Public duly commissioned to take
acknowledgements and administer oaths in the State of Indiana, certify that
David L. Rutter, John R. Wiley and Thomas V. Happer, being all of the
incorporators referred to in Article VIII of the foregoing Articles of
Incorporation, personally appeared before me; acknowledged the execution
thereof; and swore to the truth of the facts therein stated.
Witness my hand and Notarial Seal this 22nd day of September, 1971.
/s/ Margaret Torok
------------------------------------
(Written Signature)
Margaret Torok
------------------------------------
(Printed Signature)
My Commission Expires:
May 20, 1975
- -------------------------------
This instrument was prepared by Thomas V. Happer, Attorney at Law,
------------------
(Name)
212 South Second Street, Elkhart Indiana 46514
- ---------------------------------------------------------------------
(Number and Street or Building) (City) (State) (Zip Code)
<PAGE>
Corporate Certificate No. 152
Nov. 1969
STATE OF INDIANA
OFFICE OF THE SECRETARY OF STATE
CERTIFICATE OF AMENDMENT
OF
ELEVEN TWENTY N. MAIN STREET CORPORATION
- -------------------------------------------------------------------------------
I, LARRY A. CONRAD, SECRETARY OF STATE OF THE STATE OF INDIANA, HEREBY
CERTIFY THAT ARTICLES OF AMENDMENT FOR THE ABOVE CORPORATION, IN THE FORM
PRESCRIBED BY MY OFFICE, PREPARED AND SIGNED IN DUPLICATE IN ACCORDANCE WITH "AN
ACT CONCERNING DOMESTIC AND FOREIGN CORPORATIONS FOR PROFIT, PROVIDING PENALTIES
FOR THE VIOLATION HEREOF, AND REPEALING ALL LAWS OR PARTS OF LAWS IN CONFLICT
HEREWITH," APPROVED MARCH 16, 1929, AND ACTS SUPPLEMENTAL THERETO.
THE AMENDMENT
THE EXACT TEXT OF ARTICLE I.
ARTICLE I: THE NAME OF THE CORPORATION SHALL BE: EXCEL CORPORATION
WHEREAS, UPON DUE EXAMINATION, I FIND THAT THE ARTICLES OF AMENDMENT
CONFORM TO LAW, AND HAVE ENDORSED MY APPROVAL UPON THE DUPLICATE COPIES OF SUCH
ARTICLES; THAT ALL FEES HAVE BEEN PAID AS REQUIRED BY LAW; THAT ONE COPY OF SUCH
ARTICLES HAS BEEN FILED IN MY OFFICE; AND THAT THE REMAINING COPY OF SUCH
ARTICLES BEARING THE ENDORSEMENT OF MY APPROVAL AND FILING HAS BEEN RETURNED BY
ME TO THE CORPORATION.
[SEAL] IN WITNESS WHEREOF, I HAVE HEREUNTO SET MY HAND
AND AFFIXED THE SEAL OF THE STATE OF INDIANA, AT THE
CITY OF INDIANAPOLIS, THIS 19TH DAY OF OCTOBER, 1971.
--------------------------------------------
LARRY A. CONRAD, SECRETARY OF STATE
BY
------------------------------------
DEPUTY
<PAGE>
Corporate Form No. 4 (Sept. 1967)--Page One
ARTICLES OF AMENDMENT (Amending Individual
Articles Only)
APPROVED Prescribed by the Secretary of State of Indiana
and
FILED Filing Requirements--Present 3 Executed Copies
OCT 19, 1971 to Secretary of State
/s/ Larry A. Conrad
SECRETARY OF Recording Requirements--Before Exercising any
STATE OF INDIANA Authority under Amendment, Record 1 of such
3 Executed Copies, as Approved and Returned
by Secretary of State, with Recorder of County
where Principal Office is Located.
ARTICLES OF AMENDMENT
OF THE
ARTICLES OF INCORPORATION
OF
ELEVEN TWENTY N. MAIN STREET CORPORATION
- --------------------------------------------------------------------------------
The undersigned officers of Eleven Twenty N. Main Street Corporation
(hereinafter referred to as the "Corporation"), existing pursuant to the
provisions of The Indiana General Corporation Act, as amended (hereinafter
referred to as the "Act"), desiring to give notice of corporate action
effectuating amendment of certain provisions of its Articles of Incorporation,
certify the following facts:
SUBDIVISION A
THE AMENDMENTS
The exact text of Article I of the Articles of Incorporation of the
Corporation, as amended (hereinafter referred to as the "Amendments"), now is as
follows:
The name of the Corporation is Excel Corporation.
<PAGE>
Corporate Form No. 4 (Sept. 1967)--Page Two
SUBDIVISION B
MANNER OF ADOPTION AND VOTE
1. ACTION BY DIRECTORS (select appropriate paragraph)
(a) The Board of Directors of the Corporation, at a meeting thereof, duly
called, constituted and held on ______________, 19___, at which a quorum of such
Board of Directors was present, duly adopted a resolution proposing to the
Shareholders of the Corporation entitled to vote in respect of the Amendments
that the provisions and terms of Article ____ of its Articles of Incorporation
be amended so as to read as set forth in the Amendments; and called a meeting of
such Shareholders, to be held ____________________, 19____, to adopt or reject
the Amendments, unless the same were so approved prior to such date by unanimous
written consent.
(b) By written consent executed on October 4, 1971, signed by all of the
members of the Board of Directors of the Corporation, a resolution was adopted
proposing to the Shareholders of the Corporation entitled to vote in respect of
the Amendments, that the provisions and terms of Article I of its Articles of
Incorporation be amended so as to read as set forth in the Amendments, and a
meeting of such shareholders was called to be held October 18, 1971, to adopt or
reject the Amendments, unless the same were so approved prior to such date by
unanimous written consent.
2. ACTION BY SHAREHOLDERS (select appropriate paragraph)
(a) The Shareholders of the Corporation entitled to vote in respect of
the Amendments, at a meeting thereof, duly called, constituted and held on
__________________, 19____, at which ________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
were present in person or by proxy, adopted the Amendments.
The holders of the following classes of shares were entitled to vote as a
class in respect of the Amendments:
(1)
(2)
(3)
<PAGE>
Corporate Form No. 4 (Sept. 1967)--Page Three
The number of shares entitled to vote in respect of the Amendments, the
number of shares voted in favor of the adoption of the Amendments, and the
number of shares voted against such adoption are as follows:
<TABLE>
<CAPTION>
Shares Entitled To Vote as A Class
Total (as listed immediately above)
------- ------------------------------------
(1) (2) (3)
<S> <C> <C> <C> <C>
Shares entitled to vote: _______ _______ _______ _______
Shares voted in favor: _______ _______ _______ _______
Shares voted against: _______ _______ _______ _______
</TABLE>
(b) By written consent executed on October 11, 1971, signed by the holders
of 1,000 shares of the Corporation, being all of the shares of the Corporation
entitled to vote in respect of the Amendments, the Shareholders adopted the
Amendments.
3. COMPLIANCE WITH LEGAL REQUIREMENTS
The manner of the adoption of the Amendments, and the vote by which they
were adopted, constitute full legal compliance with the provisions of the Act,
the Articles of Incorporation, and the By-Laws of the Corporation.
SUBDIVISION C
STATEMENT OF CHANGES MADE WITH RESPECT TO THE
SHARES HERETOFORE AUTHORIZED
<PAGE>
Corporate Form No. 4 (Sept. 1967)--Page Four
IN WITNESS WHEREOF, the undersigned officers execute these Articles of
Amendment of the Articles of Incorporation of the Corporation, and certify to
the truth of the facts herein stated, this 13th day of October, 1971.
/s/ John R. Wiley
-------------------------------
(Written Signature)
John R. Wiley
-------------------------------
(Printed Signature)
President of
Eleven Twenty N. Main Street Corporation
-----------------------------------------
(Name of Corporation)
/s/ G. Wm. Anderson
-------------------------------
(Written Signature)
G. Wm. Anderson
-------------------------------
(Printed Signature)
Secretary of
Eleven Twenty N. Main Street Corporation
-----------------------------------------
(Name of Corporation)
STATE OF INDIANA )
)SS:
COUNTY OF ELKHART)
I, the undersigned, a Notary Public duly commissioned to take
acknowledgements and administer oaths in the State of Indiana, certify that
John R. Wiley, the President, and G. Wm. Anderson, the Secretary, of Eleven
Twenty N. Main Street Corporation, the officers executing the foregoing
Articles of Amendment of Articles of Incorporation, personally appeared
before me; acknowledged the execution thereof; and swore to the truth of the
facts therein stated.
WITNESS my hand and Notarial Seal this 13th day of October, 1971.
/s/ Margaret Torok
------------------------------------
(Written Signature)
Margaret Torok
------------------------------------
(Printed Signature)
Notary Public
My commission expires
May 20, 1975
- -------------------------------
This instrument was prepared by Thomas V. Happer, Attorney at Law, 212 S.
Second Street, Elkhart, Indiana 46514.
<PAGE>
STATE OF INDIANA
OFFICE OF THE SECRETARY OF STATE
ARTICLES OF AMENDMENT
To Whom These Presents Come, Greeting:
WHEREAS, there has been presented to me at this office, Articles of Amendment
for:
EXCEL CORPORATION
and said Articles of Amendment have been prepared and signed in accordance with
the provisions of the Indiana Business Corporation Law, as amended.
The name of the corporation is amended as follows:
DURA AUTOMOTIVE SYSTEMS OF INDIANA, INC.
NOW, THEREFORE, I, SUE ANN GILROY, Secretary of State of Indiana, hereby certify
that I have this day filed said articles in this office.
The effective date of these Articles of Amendment is April 26, 1999.
[SEAL] In Witness Whereof, I have hereunto set my hand
and affixed the seal of the State of Indiana, at the
City of Indianapolis, this Twenty-sixth day of April, 1999.
/s/ Sue Ann Gilroy
--------------------------------------------
SUE ANN GILROY, Secretary of State
[Illegible]
--------------------------------
Deputy
<PAGE>
BY-LAWS
OF
EXCEL CORPORATION
SECTION 1. The officers of the corporation shall consist of the
President, one or more Vice Presidents, the Secretary, the Treasurer, and
such assistant officers as the Board of Directors shall from time to time
designate and elect.
SECTION 2. Any two offices, other than those of President and Vice
President and President and Secretary, may be held by the same person. All
officers of this corporation shall be elected by the Board of Directors at
the annual meeting of the Board of Directors for the term of one year and
until their successors have been elected. No officer, other than the
President, need be a director of this corporation.
ARTICLE II
CHAIRMAN OF THE BOARD OF DIRECTORS
The Chairman of the Board of Directors shall be chosen from among the
directors. The Chairman of the Board of Directors shall preside at all
meetings of the shareholders and directors.
ARTICLE III
PRESIDENT AND VICE PRESIDENT
SECTION 1. The President shall be chosen from among the directors and
shall be the Chief Executive Officer of the corporation. It shall be his duty
to preside at all meetings of the shareholders and the directors, in the
absence of the Chairman of the Board of Directors; to see that all orders of
the shareholders or the Board of Directors are carried out and put into
effect; to execute all Certificates of Stock issued by the corporation; to
execute contracts, deeds, mortgages, and other instruments or agreements in
behalf of the corporation, and to perform such other duties and render such
other services for and in behalf of the corporation as may be assigned to him
by the Board of Directors.
SECTION 2. Each Vice President shall have such powers and perform such
duties as the Board of Directors may prescribe or as the President may
delegate to him. At the request of the President, any Vice President may
temporarily act in the place of the President and may perform all of the
duties of the President in his absence or during his disability. In the event
of the death of the President or in the event of his absence or inability to
act without having designated a Vice President to act temporarily in his
place, the Board of Directors shall
<PAGE>
designate a Vice President to perform all of the duties and to be vested with
all of the powers of the President.
ARTICLE IV
PRESIDENT PRO TEMPORE
In the absence or during the disability of the President and all of the
Vice Presidents, the Board of Directors may appoint a President Pro Tempore
who shall have the same powers and perform the same duties as are
hereinbefore prescribed for the President, and he shall have said powers and
perform said duties only so long as the President and all Vice Presidents may
be absent or disabled.
ARTICLE V
SECRETARY
SECTION 1. The Secretary shall attend all meeting of the shareholders
and the Board of Directors and shall prepare and keep accurate and complete
minutes of each of said meetings. He shall give proper notice of all meetings
of the shareholders and of the Board of Directors when notice of any of such
meetings shall be required to be given by the By-Laws.
SECTION 2. The Secretary shall procure all of the stock certificates,
stock books, stock transfer books, and other similar records and shall sign
and attest all Certificates of Stock issued by the corporation.
SECTION 3. The Secretary shall have the custody of and affix the
corporate seal whenever the same is required to be affixed and shall perform
such other duties and render such other services as may be assigned to him
from time to time by the Board of Directors.
ARTICLE VI
TREASURER
SECTION 1. The Treasurer shall procure and have custody of the financial
records of the corporation and shall receive and have custody of and safely
keep all of the cash and securities of the corporation. He shall keep an
accurate record of all receipts and disbursements in books and records
belonging to the corporation, shall deposit all moneys and securities in the
name and to the credit of the corporation in such bank or banks as the Board
of Directors may designate from time to time as the depositories of this
corporation, shall disburse the funds of this corporation as ordered by the
Board of Directors and all money paid out shall be by check only on the bank
or banks designated as depositories, shall take proper vouchers for each
disbursement, and shall render an
<PAGE>
account of all of his transactions as such Treasurer and of the financial
condition of the corporation at the annual meetings of the shareholders and
the Board of Directors and whenever required by the Board of Directors.
SECTION 2. The Treasurer shall perform such other duties and render such
other services as may be assigned to him form time to time by the Board of
Directors.
ARTICLE VII
ADDITIONAL DUTIES OF OFFICERS
In addition to the duties imposed upon the several officers of this
corporation, they shall have the powers and perform the duties usually had
and possessed by the respective officers of a a like corporation. Assistant
officers shall have such powers and duties as the officers whom they are
elected to assist shall specify and delegate to them and such other powers
and duties as these By-Laws or the Board of Directors may prescribe.
ARTICLE VIII
DUTIES OF OFFICER DELEGATED
In case of the absence or disability of any officer of the corporation,
the Board of Directors may delegate the powers and duties of any such officer
or director of this corporation for such period of time as the Board of
Directors may determine.
ARTICLE IX
BOND OF SECRETARY, TREASURER AND ASSISTANTS
The Secretary, the Treasurer and their assistants shall, if required by
the Board of Directors, give bond to the corporation in such sum and form as
may be designated by the Board of Directors and with such surety or
securities thereon as the Board of Directors may approve, conditioned for the
faithful performance of their duties and the restoration to the corporation,
in case of their death or removal from office, of all books, papers,
vouchers, funds, money, securities and other property of whatever kind or
description which may have come into their possession and belong to the
corporation.
ARTICLE X
MEETINGS OF SHAREHOLDERS
SECTION 1. All meetings of the shareholders of this corporation shall be
held at such place within or without the State of Indiana as may be specified
in the notice of the meeting.
<PAGE>
SECTION 2. The annual meeting of the shareholders of this corporation
shall be held on the third Thursday in April of each and every year hereafter.
SECTION 3. A complete list of the shareholders entitled to vote at any
shareholders' meeting, arranged in alphabetical order and containing the
address and number of shares of stock so held by each shareholder who is
entitled to vote at said meeting, shall be prepared by the Secretary and
shall be open to the examination of any shareholder at the office of the
corporation at the time of the meeting and for five (5) days prior to thereto.
SECTION 4. At all shareholders' meetings, a quorum shall consist of a
majority of all of the shares of stock outstanding and entitled by the
Articles of Incorporation to vote on the business to be transacted at said
meeting, but a meeting composed of less than a quorum may adjourn the meeting
from day to day thereafter or until some future time.
SECTION 5. At the annual meeting of the shareholders, there shall be
elected by plurality vote a Board of Directors consisting of three (3)
members, who shall hold office until the next annual meeting of shareholders
and until their successors have been elected and have qualified.
SECTION 6. At all shareholders' meetings, each shareholder owning shares
of common stock shall be entitled to one vote in person or by proxy for each
share of common stock standing registered in his name on the books of the
corporation ten days before said meeting is held.
SECTION 7. The shareholders may be represented at any meeting thereof by
their duly appointed Attorney-in-Fact provided the proxy so appointing said
Attorney-in-Fact shall be filed with the Secretary prior to the meeting, and
no person shall be appointed as an Attorney-in-Fact for any shareholder
unless the person so appointed shall be a common shareholder of the
corporation.
SECTION 8. Special meetings of the shareholders of this Corporation may
be called by the President, by the Board of Directors, or by shareholders
holding not less than one-fourth (1/4) of all shares of stock outstanding and
entitled, by the Articles of Incorporation, to vote on the business to be
transacted at said special meeting, and shall be called by the President or a
Vice President at the request of a majority of the Board of Directors.
Neither the President nor the Board of Directors shall have the power to
nullify and call for such special meeting made by the other.
Whenever a special meeting of the shareholders shall be called, the call
shall be delivered to the Secretary who shall issue the notice of said
special meeting which is required to be given.
<PAGE>
SECTION 9. Written notice of each meeting of the shareholders shall be
given by the Secretary, to each shareholder of record who is entitled to
vote at said meeting, at least ten days prior to the time fixed for the
holding of said meeting, which said notice shall state the place, day and
hour and the purpose for which said meeting is called, and said notice shall
be addressed to the last known place of residence of each shareholder, as
shown on the stock books of the corporation; the ten days shall be computed
from the date upon which said notice is deposited in the mails.
SECTION 10. Notice of any shareholders' meeting may be waived in writing
by any shareholder if the waiver sets forth in reasonable detail the purpose
or purposes for which the meeting is called and the time and place thereof.
Each waiver given under this section shall be filed with the corporate
records or made a part of the minutes of the meeting.
SECTION 11. Any action which may be taken at a meeting of the
shareholders may be taken without a meeting, if authorized by a writing
signed by all of the shareholders entitled to vote at a meeting for such
purpose, and filed with the Secretary of the corporation.
SECTION 12. No shares of Stock shall be coted at any annual or special
meeting of shareholders upon which any installment is due and unpaid, which
are owned by this corporation, or which have been transferred within ten (10)
days before the date fixed for holding said meeting.
ARTICLE XI
ORDER OF BUSINESS AT SHAREHOLDERS MEETING
The order of business which shall be transacted at shareholders'
meetings shall be as follows:
1. Reading of minutes of previous meeting;
2. Reports of officers;
3. Reports of committees;
4. Unfinished business;
5. New business;
6. Election of directors, if the meeting is held for that purpose.
ARTICLE XII
DIRECTORS
SECTION 1. The property and business affairs of the corporation shall be
managed and controlled by a Board of Directors consisting of two members,
none of whom need be a shareholder of the corporation, who shall be elected
at the annual meeting of the shareholders and who shall hold office until the
next annual meeting of the shareholders and until their successors have been
elected and have qualified. In case of the failure to hold the annual meeting
on the date fixed herein for the same to be held, the directors shall hold
over until the next annual meeting
<PAGE>
unless, prior to said meeting, there shall be held a special meeting of the
shareholders for the purpose of electing directors.
SECTION 2. Vacancies in the Board of Directors, caused by resignation,
death or other incapacity or by increase in the number of directors, shall be
filled for the unexpired term by a majority vote of the remaining members of
the Board of Directors.
ARTICLE XIII
MEETINGS OF DIRECTORS
SECTION 1. Immediately following the annual meeting of the shareholders,
the annual meeting of the Board of Directors shall be held, without notice,
at the place at which the annual meeting of the shareholders is held.
SECTION 2. Special meetings of the Board of Directors may be called by
the Chairman of the Board of Directors, by the President, or by two members
of the Board of Directors, upon notice to each director by letter or
telegram, but said meeting shall not be held earlier than one day after said
telegram shall have been sent or three days after said letter shall have been
mailed.
Said meeting may be held either at the office of the corporation or at
such other place as may be designated in the notice of said meeting.
SECTION 3. A majority of the whole Board of Directors shall constitute a
quorum for the transaction of any business except the filling of vacancies,
but a smaller number may adjourn from time to time until a future date or
until a quorum is secured.
For the purpose only of filling a vacancy or vacancies in the Board of
Directors, a quorum shall consist of a majority of the whole Board of
Directors, less the vacancy or the vacancies therein.
The act of a majority of the directors present at a meeting duly called
at which a quorum is present shall be the act of the Board of Directors.
SECTION 4. Notice of any special meeting of the Board of Directors may be
waived in writing by any director if the waiver sets forth in reasonable
detail the purpose or purposes for which the meeting is called and the time
and place thereof/
SECTION 5. Any action required or permitted to be taken at any meeting of
the Board of Directors or of any committee thereof may be taken without a
meeting if, prior to such action, a written consent to such action is signed
by all members of the Board of Directors or such committees, as the case may
be, and such written consent is filed with the minutes of the proceedings of
the board or committee.
<PAGE>
ARTICLE XIV
POWERS OF DIRECTORS
SECTION 1. The Board of Directors shall have, in addition to such powers
as are hereinafter expressly conferred upon it, all such powers as may be
exercised by the corporation, subject to the provisions of the statutes of
the State of Indiana, the Articles of Incorporation and these By-Laws, and
subject to such further regulations as may be, from time to time, made by the
shareholders.
SECTION 2. The Board of Directors shall have express power:
(a) From time to time to make and change rules and regulations, not
inconsistent with these By-Laws, for the management of the
corporation's business and affairs;
(b) To purchase, or otherwise acquire, property, rights or privileges
for the corporation which the corporation has power to take on
such terms as the Board of Directors deems proper;
(c) To pay for the property, rights or privileges acquired by the
corporation, in whole or in part, with money, stocks, bonds,
debentures or other securities of this corporation or with other
property owned by it;
(d) to create, make and issue mortgages, bonds, debentures, deeds of
trust, trust agreements, negotiable transferable instruments and
securities, secured by mortgages or otherwise, and to do every
other act and thing necessary to effectuate the same;
(e) To appoint agents, clerks, assistants, committees, factors,
servants, and trustees, to determine their authority and to
dismiss them at its discretion; to fix their duties and
emoluments and to change them from time to time, and to require
security as it may deem proper but, in the absence of action by
the Board of Directors, the employment and discharge of employees
and the fixing of their compensation shall be done by the officer
of this corporation under whom said employees work;
(f) To confer on any officer of the corporation the power of selecting,
discharging or suspending any of such employees;
<PAGE>
(g) To determine by whom and in what manner the corporation's bills,
notes and receipts, acceptances, endorsements, checks, releases,
contracts or other documents shall be signed when said matter is
not covered by these By-Laws;
(h) To fix the compensation of officers, directors and members of
committees who are not salaried employees of this corporation;
(i) To fix and determine the price at which, and the consideration
of which, the shares of stock of the corporation may, from time
to time, be issued
ARTICLE XV
ORDER OF BUSINESS AT DIRECTORS MEETINGS
The order of business which shall be transacted at the directors'
meetings shall be as follows:
1. Reading of minutes of previous meeting;
2. Reports of officers;
3. Reports of committees;
4. Unfinished business;
5. New business;
6. Election of officers, if the meeting is held for that purpose.
ARTICLE XVI
COMPENSATION OF DIRECTORS AND
MEMBERS OF COMMITTEES
The members of the Board of Directors and members of committees of the
corporation who are not salaried employees of the corporation shall receive
such compensation for their services to be rendered for and in behalf of the
corporation as may, from time to time, be fixed by the Board of Directors,
and the compensation so fixed shall continue to be payable until the Board of
Directors shall have thereafter fixed a different compensation, which it may
do at any regular or special meeting.
ARTICLE XVII
RIGHTS OF SHAREHOLDERS
The voting rights shall be confined exclusively to the shares of the
common stock of One Dollar ($1.00) Par Value.
<PAGE>
ARTICLE XVIII
CERTIFICATES OF STOCK
SECTION 1. The shares of common stock of the corporation shall be
represented by certificates signed by the President and the Secretary of the
corporation and shall be sealed with the seal of the corporation.
SECTION 2. Each holder of the common stock certificates of $1.00 Par
Value of this corporation shall be entitled to a certificate substantially in
the following form:
Incorporated Under the Laws of the State of Indiana
Number_______ _______Shares
EXCEL CORPORATION
Authorized Capital 1,000 Shares Par Value
THIS CERTIFIES THAT_____________________________ is the owner
of______________________fully paid and non-assessable shares of the capital
stock of EXCEL CORPORATION transferable on the books of the Corporation in
person or by duly authorized Attorney upon surrender of this Certificate
properly endorsed.
IN WITNESS WHEREOF the Corporation has caused this Certificate to be
signed by its duly authorized officers and sealed with the Seal of the
Corporation, this_______day of__________, A.D. 19__.
___________________________________ _______________________________
Secretary President
SECTION 3. In the case of the loss or destruction of any stock
certificates, a duplicate may be ordered issued by the Board of Directors
upon the satisfactory proof of such loss or destruction and upon the giving
to this corporation of a satisfactory indemnity bond in an amount fixed by
the Board of Directors. The form of said bond shall be designated and the
surety or sureties thereon approved by the Board of Directors.
SECTION 4. The corporation shall have a first lien on all shares of the
capital stock and upon all dividends declared upon the same for any
indebtedness of any character or description due it from the respective
holders of any such share or shares.
<PAGE>
ARTICLE XIX
TRANSFERS OF STOCK
SECTION 1. All transfers of the stock of the corporation shall be made
upon its books by the holder thereof in person, or by his duly appointed
representative, upon surrender of the certificate for cancellation. No
transfer of stock shall be made within ten (10) days next preceding the day
appointed for paying a dividend or for the holding of a shareholders' meeting.
SECTION 2. The corporation shall be entitled to treat the holder of
record of any share or shares of stock as the legal owner thereof and
accordingly shall not be bound to recognize any equitable claim to or
interest in such share or shares, on the part of any other person whether or
not it shall have express or other notice thereof, save as expressly provided
by the laws of the State of Indiana.
SECTION 3. The assignment of any certificate of stock shall constitute an
assignment to the assignee of the shares so assigned, and of all dividends on
the shares assigned which were declared prior to the assignment but payable
thereafter, and said dividends shall be paid by the corporation to the
assignee of said shares, providing said certificate of stock is presented to
the corporation for transfer prior to the date upon which said dividend is
payable.
SECTION 4. In the event any shares of this corporation are issued
pursuant to a permit or exemption therefrom requiring the impositin of a
legend condition, the person or persons issuring or transferring said shares
shall make sure said legend appears on the certificate and on the stub
relating thereto in the stock record book and shall not be required to
transfer any shares free of such legend unless an amendment to such permit or
a new permit be first issued so authorizing such a deletion.
ARTICLE XX
FISCAL YEAR
The fiscal year of this corporation shall begin on the first day of
January and end on the 31st day of December of each and every year.
ARTICLE XXI
CHECKS FOR MONEY
All checks, drafts, drafts or other orders for the payment of money of
this corporation shall be signed by such officers or employees as may be from
time to time designated by the Board of Directors. No checks shall be signed
in blank either as to the amount of the check or the name of the payee.
<PAGE>
ARTICLE XXII
NOTICES
SECTION 1. A notice required to be given under the provisions of these
By-Laws to any shareholder, director or officer, shall not be construed to
mean personal notice, but may be given in writing by depositing the same in a
post office or letter box in a postpaid sealed wrapper addressed to such
shareholder, officer or director at such address as appears upon the books of
the corporation and such notice shall be deemed to be given at the time when
the same shall be thus mailed.
SECTION 2. Any shareholder, director or officer may waive, in writing,
any notice required to be given under these By-Laws, either before or after
the time when said notice should have been given, if the waiver sets forth in
reasonable detail the purpose or purposes for which the meeting is called and
the time and place thereof.
ARTICLE XXIII
REMOVAL OF OFFICERS
The officers of this corporation shall not be removed from office during
their term of office except for cause, nor shall their term of office be
diminished during their tenure.
ARTICLE XXIV
DIVIDENDS
The Board of Directors may declare and pay dividends out of the surplus
earnings, the undivided net profits, or the surplus paid in cash, of this
corporation, but no dividends payable in cash or property shall be paid out
of the surplus of this corporation due to or arising from unrealized
appreciation in value or from a revaluation of the assets of this
corporation. Dividends may be declared at any regular or special meeting of
the Board of Directors and need not be declared at the annual meeting of the
Board of Directors. Dividends may be paid in cash, in property or in the
shares of the common stock of One Dollar ($1.00) Par Value of this
corporation, as provided in its Articles of Incorporation, or as permitted by
the laws of the State of Indiana.
ARTICLE XXV
COMPENSATION OF OFFICERS
The officers of this corporation shall receive such compensation for
their services as may be, from time to time,
<PAGE>
fixed by the Board of Directors and the compensation so fixed shall continue
to be payable until the Board of Directors shall have fixed a different
compensation which it may do at any regular or special meeting.
ARTICLE XXVI
CORPORATE SEAL
The seal of this corporation shal be a plain circular disc, having
engraved thereon, near the outer edge thereof, the words, "EXCEL CORPORATION,
Elkhart, Indiana", and in the center thereof the word, "SEAL".
ARTICLE XXVII
EXECUTION OF NEGOTIABLE INSTRUMENTS AND CONTRACTS
The promissory notes, debentures, certificates of indebtedness, written
contracts, and other similar instruments which the corporation may hereafter
issue or execute shall be the valid obligations of the corporation if signed
in its behalf by the President, a Vice President, the Treasurer, or any other
officer or agent designated and authorized by the Board of Directors.
ARTICLE XXVIII
INDEMNIFICATION OF DIRECTORS,
OFFICERS AND OFFICE EMPLOYEES
Every individual who has heretofore been, is now or may hereafter become,
an officer, director or office employee of the corporation, is hereby
indemnified against all liability, costs and expenses which may hereafter be
imposed upon or incurred by him or her in connection with or resulting from
any action, suit or proceeding of whatever nature against him or her, either
civil or criminal, including actions brought by or on behalf of the
corporation and which said action is connected with, grows out of or results
from his or her being or having been an officer, director of office employee
of the corporation and is based upon any action alleged to have been taken,
or not taken, by hime or her, but this indemnification shall not apply to any
negligent or willful misconduct on the part of said officer, director or
office employee which shall be found in said action to have occurred.
The indemnification above referred to shallnot be exclusive of any other
rights to which any such officer, director or office employee may be
entitled, as a matter of laws, and shall continue to effect, notwithstanding
the fact that said individual shall have ceased to be an officer, director or
office employee at the time said action is instituted, while it is pending or
after the judgment therein is rendered.
<PAGE>
The indemnification above referred to shall cover the conduct of such
officer, director and office employee which occurred both before and after
the adoption of this By-Law and shall inure to the benefit of his or her
estate, heirs, legatees and devisees.
ARTICLE XXIX
INSPECXTION OF BOOKS, RECORDS AND BY-LAWS
SECTION 1. The books, accounts and records of the corporation shall be
open to inspection and examination by each member of the Board of Directors
during the usual business hours.
SECTION 2. All books of account, minutes of the meetings of the
shareholders and directors, stock register, stock transfer books, list of
names and addresses of the shareholders and the number and class of shares
held by each shareholder, shall be open to inspectin and examination during
the usual business hours at the annual meeting of the corporation for all
proper purposes by each shareholder of the corporation, or by his duly
authorized agent or attorney.
ARTICLE XXX
AMENDMENTS
SECTION 1. These By-Laws maybe amended, altered, repealed or added to at
any annual meeting of the Board of Directors, or at any special meeting
thereof, provided however, that at the time of giving notice of said special
meeting, each director shall be furnished with a copy of the proposed
amendment, alteration or addition to said By-Laws.
SECTION 2. No amendment, alteration or addition to these By-Laws shall
become effective unless the same is adopted by the affirmative vote of
two-thirds of the directors of this corporation.
<PAGE>
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
ANDERSON INDUSTRIES, INC.
ARTICLE ONE
The name of the corporation is Anderson Industries, Inc.
ARTICLE TWO
The address of the corporation's registered office in the State of
Delaware is the Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle. The name of its registered agent at such
address is The Corporation Trust Company.
ARTICLE THREE
The nature of the business or purposes to be conducted or promoted is to
engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware.
ARTICLE FOUR
The total number of shares of stock which the corporation has authority
to issue is one thousand (1,000) shares of Common Stock, with a par value of
$0.01 per share.
ARTICLE FIVE
The corporation is to have perpetual existence.
ARTICLE SIX
In furtherance and not in limitation of the powers conferred by statute,
the board of directors of the corporation is expressly authorized to make,
alter or repeal the by-laws of the corporation.
ARTICLE SEVEN
Meetings of the stockholders may be held within or without the State of
Delaware, as the by-laws of the corporation may provide. The books of the
corporation
<PAGE>
may be kept outside the State of Delaware at such place or places as may be
designated from time to time by the board of directors or in the by-laws of
the corporation. Election of directors need not be by written ballot unless
the by-laws of the corporation so provide.
ARTICLE EIGHT
To the fullest extent permitted by the General Corporation Law of the
State of Delaware as the same exists or may hereafter be amended, a director
of this corporation shall not be liable to the corporation or its
stockholders for monetary damages for a breach of fiduciary duty as a
director. Any repeal or modification of this ARTICLE EIGHT shall not
adversely affect any right or protection of a director of the corporation
existing at the time of such repeal or modification.
ARTICLE NINE
The corporation expressly elects not to be governed by Section 203 of
the General Corporation Law of the State of Delaware.
ARTICLE TEN
The corporation reserves the right to amend, alter, change or repeal any
provision contained in this certificate of incorporation in the manner now or
hereafter prescribed herein and by the laws of the State of Delaware, and all
rights conferred upon stockholders herein are granted subject to this
reservation.
<PAGE>
AMENDED AND RESTATED BY LAWS
OF
ANDERSON INDUSTRIES, INC.
A Delaware Corporation
ARTICLE I
Offices
Section 1. REGISTERED OFFICE. The registered office of the
Corporation in the State of Delaware shall be located at the Corporation
Trust Center, 1209 Orange Street, City of Wilmington, County of New Castle.
The name of the Corporation's registered agent at such address shall be The
Corporation Trust Company. The registered office and/or registered agent of
the Corporation may be changed from time to time by action of the Board of
Directors.
Section 2. OTHER OFFICES. The Corporation may also have offices at
such other places, both within and without the State of Delaware, as the
Board of Directors may from time to time determine or the business of the
Corporation may require.
ARTICLE II
Shareholders' Meetings
Section 1. ANNUAL MEETING. The annual meeting of shareholders shall
be within one hundred twenty (120) days after the close of the immediately
preceding fiscal year of the corporation and at the time and place as the
Board of Directors shall fix, for the purpose of electing directors and
transacting such other business as may properly come before the meeting. Any
annual meeting not held on the designated day may be held on any day
thereafter to which it may be adjourned.
Section 2. SPECIAL SHAREHOLDERS' MEETINGS. Special meetings of
shareholders may be called by the President or the Board of Directors. The
President shall call a special shareholders' meeting whenever shareholders
owning a majority of the issued and outstanding shares of the Corporation's
capital stock entitled to vote at the special meeting shall so request in
writing.
Section 3. PLACE OF MEETING. The Board of Directors may designate any
place either within or without Delaware as the meeting place for any
shareholders' meeting called by the Board of Directors. If no designation is
made or if some person other than the Board calls a special meeting, the
meeting shall be held at the Corporation's chief executive offices.
Section 4. NOTICE OF MEETINGS; WAIVER. Written notice of the time,
place and purposes of a shareholders' meeting shall be given not less than ten
(10) nor more than sixty (60) days before the meeting date, either personally
or by mail, to each shareholder of record entitled
1
<PAGE>
to vote at the meeting. If mailed, the notice shall be deemed to be given
when deposited in the United States mail, postage prepaid, addressed to the
shareholder at his or her address as it appears on the Corporation's stock
transfer books. Waiver of notice of a meeting of the shareholders may be made
in writing either before or after the holding thereof. Attendance of a person
at a meeting of shareholders shall constitute a waiver of notice of such
meeting, except when the shareholder attends for the purpose of objecting, at
the beginning of the meeting, to the transaction of any business because the
meeting is not legally called or convened.
Section 5. QUORUM. At all shareholders' meetings, except where
otherwise provided by law, the holders of a majority of the outstanding
shares entitled to vote, being present in person or by proxy, shall
constitute a quorum for all purposes. The shareholders present in person or
by proxy at the meeting may continue to do business until adjournment,
notwithstanding the withdrawal of enough shareholders to leave less than a
quorum.
Section 6. VOTING. Each outstanding share of capital stock is
entitled to one vote on each matter submitted to a vote, except as otherwise
provided in the Certificate of Incorporation or under law. A vote may be cast
either orally or in writing, at the discretion of the chairperson of the
meeting.
Section 7. ADJOURNMENTS. Any annual or special shareholders' meeting,
whether or not a quorum is present, may be adjourned from time to time by a
majority vote of the shares present in person or by proxy. Unless the Board
of Directors fixes a new record date for the adjourned meeting or the
adjournment is for less than thirty days, it is not necessary to give notice
of the adjourned meeting if the date, time and place to which the meeting is
adjourned are announced at the meeting at which the adjournment is taken and
only such business is transacted at the adjourned meeting as might have been
transacted at the original meeting. If the adjournment is for more than
thirty days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.
Section 8. ACTION OF SHAREHOLDERS WITHOUT A MEETING. Except as
otherwise provided by law, any action required or permitted to be taken at a
shareholders' meeting may be taken without a meeting, without prior notice
and without a vote, if a consent in writing, setting forth the action so
taken, shall be signed by the holders of outstanding stock having not less
than the minimum number of votes that would be necessary to authorize or
take such 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 shall be given to those stockholders who have not consented
in writing. The consent has the same effect as a shareholders' vote for all
purposes.
2
<PAGE>
ARTICLE III
Directors
Section 1. NUMBER AND TERM OF OFFICE. The number of directors of the
Corporation shall be not less than two (2) and not more than seven (7), the
number to be determined initially by the incorporator and thereafter by the
Board of Directors or the shareholders. All directors shall be elected at the
annual meeting of shareholders and hold office until their respective
successors are elected and qualified, or until their resignation or removal.
Section 2. REMOVAL; RESIGNATION. A director of the Corporation may be
removed from office for any reason at a special meeting of the shareholders
called for that purpose by the vote of the holders of a majority of the
capital stock then outstanding and entitled to vote at an election of
directors. A director may resign at any time by giving written notice to the
President or the Secretary. Unless otherwise specified therein, such
resignation shall take effect upon receipt thereof.
Section 3. ANNUAL AND REGULAR MEETINGS. The annual meeting of the
Board of Directors shall be held on the date of the Corporation's annual
shareholders meeting. Regular meetings of the Board of Directors may be held
without notice at such time and place as may be fixed by resolution of the
Board.
Section 4. SPECIAL MEETINGS. Special meetings of the Board of
Directors may be held whenever called by the President or by a majority of
the Board of Directors. Notice thereof shall be given personally or by
telephone, mail, facsimile, or similar means of communication to the last
known address of each director at least one (1) day before such meeting.
Neither the business to be transacted at, nor the purpose of, a special
meeting need be specified in the notice of the meeting.
Section 5. QUORUM AND VOTING. A majority of the Directors then in
office shall constitute a quorum for transacting business, unless otherwise
provided by law or the Certificate of Incorporation. A majority of Directors
present at any regular or special meeting, although less than a quorum, may
adjourn the meeting from time to time, without notice. The majority vote of
members present at a meeting at which a quorum is present constitutes the
action of the Board of Directors, unless the vote of a larger number is
required by law, the Certificate of Incorporation, or the Bylaws.
Section 6. COMPENSATION. A director as such shall not receive any
stated salary for his or her services, but by resolution of the Board of
Directors a fixed sum and expenses of attendance, if any, may be allowed for
attendance at each regular or special meeting of the Board of Directors.
Nothing herein shall be construed to preclude a director from serving the
Corporation in any other capacity and receiving compensation therefor.
3
<PAGE>
Section 7. ACTION OF DIRECTORS WITHOUT A MEETING. Except as otherwise
provided by law, any action required or permitted to be taken at any meeting
of the Board of Directors may be taken without a meeting if all members of
the Board of Directors consent thereto in writing and the writing or writings
are filed with the minutes of proceedings of the Board of Directors.
ARTICLE IV
Officers
Section 1. NUMBER. The officers of the Corporation shall be a
President, a Secretary, and a Treasurer. The Board of Directors may also
elect a Chairperson of the Board, one or more Vice Presidents (one or more of
whom may be designated as Senior Vice President or Executive Vice President),
a Controller and one or more Assistant Secretaries, Assistant Treasurers, and
Assistant Controllers. The Board of Directors shall have power to create such
other offices as it may from time to time deem expedient.
Section 2. ELECTION AND TERM OF OFFICE. The officers shall be elected
annually by the Board of Directors at its annual meeting. If the officers are
not elected at this meeting, they shall be elected as soon thereafter as
convenient. Each officer shall hold office until his or her successor shall
have been duly elected and qualified or until his or her earlier death,
resignation or removal.
Section 3. REMOVAL; RESIGNATION; VACANCIES. Any officer elected or
appointed by the Board may be removed by the Board of Directors at any time
with or without cause. Any officer may resign at any time by giving written
notice to the Board of Directors, the President or the Secretary. Unless
otherwise specified, such resignation shall take effect upon receipt thereof.
Vacancies among officers of the Corporation during the year may be filled by
the Board of Directors for the unexpired portion of the term.
Section 4. PRESIDENT. The President shall be the chief executive
officer of the Corporation. Subject to the direction of the Board of
Directors, the President shall have general supervision of the Corporation's
business, departments, officers, and employees, and shall prescribe duties of
other officers and employees insofar as they are not specified by the Bylaws
or by the Board of Directors. The President shall act as chairperson and
preside at all meetings of the shareholders and Board of Directors, unless
another chairperson is elected by the Board of Directors for such meeting(s).
Section 5. VICE PRESIDENTS. Any Vice Presidents shall perform such
duties and be vested with such powers as the Board of Directors or the
President may prescribe.
Section 6. SECRETARY. The Secretary shall keep a record in proper
books maintained for that purpose of all proceedings of the Board of
Directors and the shareholders. The Secretary shall keep all other records
and shall perform all other duties as the Board of Directors or the
4
<PAGE>
President shall designate. The Secretary shall give all notices required by
law, the Certificate of Incorporation, the Bylaws, or the resolutions of the
Board of Directors. The Secretary shall in general perform all the duties
appurtenant to the office of Secretary, subject to the control of the Board
of Directors and the President.
Section 7. TREASURER. The Treasurer shall be responsible for all
funds and securities of the Corporation and shall render such accounts and
present such statements to the Board of Directors and the President as may be
required of the Treasurer. The Treasurer shall deposit all the Corporation's
funds with such depositories as the Board of Directors may designate. The
Treasurer shall in general perform all duties incident to the position of
Treasurer, subject to the control of the Board of Directors and the
President. The Treasurer shall pay out money as the business may require upon
the order of the properly constituted officer or officers of the Corporation,
taking proper vouchers therefor; provided, however, that the Board of
Directors shall have the power by resolution to delegate any of the duties
of the Treasurer to other officers, and to provide by what officers or
employees, if any, various bills, notes, checks, vouchers, orders or other
instruments shall be countersigned.
Section 8. OTHER OFFICERS. Other officers appointed by the Board of
Directors shall exercise those powers and perform those duties as may be
delegated to them by the Board of Directors or the President.
Section 9. ADDITIONAL DUTIES AND AUTHORITIES. The officers shall have
authority to execute on the Corporation's behalf any and all contracts,
agreements, bonds, deeds, mortgages, leases or other obligations of the
Corporation arising in its regular course of business other than where the
Corporation's Board of Directors designate one or more specific officers or
agents to act on the Corporation's behalf. All documents, instruments and
writings of any nature not arising in its regular course of business shall be
executed and delivered by the Corporation's officer or officers and in such
manner as the Board of Directors may, from time to time, determine.
ARTICLE V
Committees
The Board of Directors may establish such committees as it may deem
necessary or desirable to conduct the Corporation's business. Any committee
created shall have the members, duties, powers, and authority as the Board of
Directors shall specify.
ARTICLE VI
Capital Stock
Section 1. CERTIFICATES. The interest of the Corporation's
shareholders shall be
5
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evidenced by stock certificates, certifying the number of shares represented
thereby and in such form not inconsistent with law and the Certificate of
Incorporation as the Board of Directors may from time to time prescribe. The
Board of Directors may authorize that some or all of the Corporation's shares
shall be issued without certificates in the manner prescribed by law.
The stock certificates shall be signed by the President, or a Vice
President, and by the Secretary or the Treasurer. The Corporation's seal may
be affixed to the certificates, and may be either printed or manually
affixed. The officers' signatures may be facsimiles. If any officer who has
signed or whose facsimile signature has been placed upon any certificate
ceases to hold that office before the certificate is issued, the Corporation
may issue the certificate with the same effect as if he or she held that
office at its issuance.
All certificates of stock surrendered to the Corporation for transfer
shall be canceled and, except in the case of lost or destroyed certificates
as provided below, no new certificate shall be issued until the former
certificate or certificates for the shares represented thereby shall have
been surrendered and canceled.
Section 2. LOST CERTIFICATES. When a stock or other certificate
previously issued is alleged to have been lost or destroyed, a replacement
certificate may be issued upon such terms and indemnity to the Corporation as
the Board of Directors or the President may prescribe.
Section 3. TRANSFER OF SHARES. Transfer of the Corporation's stock
shall be made only on the stock transfer books, and the Corporation may
decline to recognize the holder of any certificate as a shareholder until
the shares represented by such certificate are transferred into his or her
name on the Corporation's stock transfer books. The Corporation shall be
entitled to treat the record holder of any shares as the absolute owner
thereof, and shall not be bound to recognize any equitable or other claim to
or interest in those shares on the part of any other person, whether or not
it has express or other notice thereof, except as otherwise provided by law.
Section 4. FIXING RECORD DATES. For the purpose of determining
shareholders entitled to notice of and to vote at a shareholders' meeting or
any adjournment thereof, or for any other purpose, the Board of Directors may
fix in advance a date as the record date. The date shall not be more than
sixty (60) nor less than ten (10) days before the date of the meeting, nor
more than sixty (60) days before any other action.
ARTICLE VII
Miscellaneous
Section 1. SEAL. The Corporation's seal shall consist of the
Corporation's name and state of incorporation around the periphery of a
circle, with the words "Seal" or "Corporate Seal" within the circle.
6
<PAGE>
Section 2. FISCAL YEAR. The Corporation's fiscal year shall be fixed
by resolution of the Board of Directors.
Section 3. INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES, AND
AGENTS. (a) The Corporation shall indemnify and hold harmless against all
expense, liability and loss (including attorneys' fees actually and
reasonably incurred in connection with a proceeding as defined below) any
person who was or is a party, or is threatened to be made a party, to or is
involved in any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (hereinafter a
"proceeding"), by reason of the fact that he or she is or was a director or
officer of the Corporation, or is or was serving another organization or
entity (whether for profit or not) at the Corporation's request as a
director, officer, employee, fiduciary or agent of such organization or
entity. Such indemnification shall be to the fullest extent, and shall be
determined in such manner, as now or hereafter permitted by law. The
indemnification shall continue 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 the person; provided, however, that, except as provided in
Section 3(c) hereof, the Corporation shall indemnify any such person seeking
indemnification in connection with a proceeding initiated by such person only
if such proceeding was authorized by the Board of Directors of the
Corporation. The Corporation may, by action of its Board of Directors,
indemnify its employees and agents to the same extent as the indemnification
of directors and officers.
(b) Notwithstanding the foregoing, the indemnification and
advancement of expenses provided by or granted under the Delaware Corporation
Law shall not be considered exclusive of any other rights to which those
seeking indemnification or advancement of expenses may be entitled under the
Certificate of Incorporation, Bylaws, insurance, or a contractual agreement.
(c) Any indemnification of a director or officer of the Corporation
under Section 3(a) of this Article VI or advance of expenses under Section
3(d) of this Article VI shall be made promptly, and in any event within 30
days, upon written request of the director or officer. If a determination by
the Corporation that the director or officer is entitled to indemnification
pursuant to this Article VI, Section 3 is required, and the Corporation fails
to respond within sixty days to a written request for indemnity, the
Corporation shall be deemed to have approved the request. If the Corporation
denies a written request for indemnification or advancing of expenses, in
whole or in part, or if payment in full pursuant to such request is not made
within 30 days, the right to indemnification or advances as granted by this
Article VI, Section 3 shall be enforceable by the director or officer in any
court of competent jurisdiction. Such person's costs and expenses incurred
in connection with successfully establishing his or her right to
indemnification, in whole or in part, in any such action shall also be
indemnified by the Corporation. It shall be a defense to any such action
(other than an action brought to enforce a claim for expenses incurred in
defending any proceeding in advance of its final disposition where the
required undertaking, if any, has been tendered to the Corporation) that the
claimant has not met the standards of conduct which make it permissible under
the General Corporation Law of the State of Delaware for the Corporation to
indemnify the claimant for the amount claimed, but
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the burden of such defense shall be on the Corporation. Neither the failure
of the Corporation (including its Board of Directors, independent legal
counsel, or its stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances because he or she has met the applicable standard of conduct
set forth in the General Corporation law of the State of Delaware, nor an
actual determination by the Corporation (including its Board of Directors,
independent legal counsel, or its stockholders) that the claimant has not met
such applicable standard of conduct, shall be a defense to the action or
create a presumption that the claimant has not met the applicable standard of
conduct.
(d) Expenses incurred by any person described in Section 3(a) of
this Article VI in defending a proceeding shall be paid by the Corporation in
advance of such proceeding's final disposition upon receipt of an undertaking
by or on behalf of the director or officer to repay such amount if it shall
ultimately be determined that he or she is not entitled to be indemnified by
the Corporation. Such expenses incurred by other employees and agents may be so
paid upon such terms and conditions, if any, as the Board of Directors deems
appropriate.
ARTICLE VII
Amendments
These Bylaws may be amended, altered or repealed and new Bylaws may be
adopted at any meeting of the shareholders by the affirmative vote of the
holders of a majority of the shares entitled to vote thereon, or by the Board
of Directors.
ARTICLE VIII
Scope of Bylaws
These Bylaws govern the regulation and management of the Corporation's
affairs to the extent they are consistent with applicable law and the
Certificate of Incorporation. To the extent of any inconsistency, applicable
law and the Certificate of Incorporation shall govern the Corporation's
affairs.
Dated: May 20, 1999
8
<PAGE>
REVISED
ARTICLES OF INCORPORATION
OF
HYDRO FLAME CORPORATION
Pursuant to the provisions of the Utah Business Corporation Act, the
undersigned corporation, Hydro Flame Corporation, hereby adopts the following
Revised Articles Of Incorporation.
ARTICLE I.
NAME
The name of the corporation is HYDRO FLAME CORPORATION.
ARTICLE II.
DURATION
The corporation shall have perpetual existence.
ARTICLE III.
PURPOSES
The purposes for which the corporation is organized are:
A. To engage in the business of manufacturing, distributing and
selling all types and kinds of combustion and heating equipment, devices
and appliances, and to engage in all business related thereto.
B. To manufacture, buy, sell, lease, deal in, deal with, handle,
repair, construct, erect and maintain all types and kinds of machinery,
equipment, appliances and devices, including but not limited to all types
and kinds
<PAGE>
2
of combustion and heating equipment, devices and appliances and to
engage in all business related thereto.
C. To engage in the business of buying, selling, trading and
dealing in all types and kinds of oil, gas, and mineral properties, leases
or contracts and to own, hold and mine lands supposed to contain or
containing oil, gas, or other minerals and to sell, market or refine the
same and to engage in all businesses related thereto.
ARTICLE IV.
CAPITALIZATION
The aggregate number of shares which the Corporation shall have
authority to issue is Ten Million (10,000,000) of the par value of One Dollar
($1.00) each. All shares of the Corporation shall be of the same class,
common, and shall have the same rights and preferences. Fully paid stock of
the Corporation shall not be liable to any further call or assessment.
ARTICLE V.
PREEMPTIVE RIGHT
Provisions limiting or denying to shareholders the preemptive right to
acquire additional shares of the Corporation are: None, except the Board of
Directors shall have such power to issue stock as is set forth in Section
16-10-24, Utah Code Annotated, 1953.
ARTICLE VI.
EFFECT OF REVISION
These Revised Articles of Incorporation supersede the original Articles
of Incorporation and all amendments thereto and revisions thereof.
<PAGE>
3
ARTICLE VII
OUTSTANDING SHARES
AND SHARES ENTITLED TO VOTE
The number of shares of the Corporation outstanding at the time of the
adoption of these Revised Articles of Incorporation was 790,489, and the
number of shares entitled to vote thereon was 790,489. There were
represented at the annual meeting where this revision of the Articles of
Incorporation was considered 501,217 shares.
ARTICLE VIII
NO-CLASS DESIGNATION
The designation and number of outstanding shares of each class entitled
to vote thereon as a class were as follows: None.
ARTICLE IX
SHARES VOTED FOR AND AGAINST
The number of shares voted for this revision of the Articles of
Incorporation was 423,861; the number of shares voted against this revision
was 77,356.
ARTICLE X
DATE OF ADOPTION OF REVISION
This revision of Articles of Incorporation of Hydro Flame Corporation
was adopted by vote of the shareholders at the annual meeting of the
Corporation held October 13, 1973.
DATED this 31st day of October, 1973.
HYDRO FLAME CORPORATION
By /s/ George W. Jackson
-------------------------------
George W. Jackson, President
and
/s/ Taylor H. Merrill, Secretary
------------------------------------
Taylor H. Merrill, Secretary
<PAGE>
B Y - L A W S
OF
HYDRO FLAME ENTERPRISES, INC.
A Utah Corporation
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
<S> <C> <C>
ARTICLE I
OFFICES.........................................................................................1
ARTICLE II
SHAREHOLDERS....................................................................................1
Section 1. Annual Meeting................................................................1
Section 2. Special Meeting...............................................................1
Section 3. Place of Meeting..............................................................1
Section 4. Notice of Meeting.............................................................2
Section 5. Closing of Transfer Books or Fixing of Record Date............................2
Section 6. Voting Lists..................................................................2
Section 7. Quorum........................................................................2
Section 8. Proxies.......................................................................3
Section 9. Voting Shares.................................................................3
Section 10. Voting of Shares by Certain Holders...........................................3
Section 11. Informal Action by Shareholders...............................................3
ARTICLE III
BOARD OF DIRECTORS..............................................................................4
Section 1. General Powers................................................................4
Section 2. Number, Tenure and Qualifications.............................................4
Section 3. Regular Meeting...............................................................4
Section 4. Special Meetings..............................................................4
Section 5. Notice........................................................................4
Section 6. Quorum........................................................................4
Section 7. Manner of Acting..............................................................4
Section 8. Vacancies.....................................................................4
Section 9. Compensation..................................................................5
Section 10. Presumption of Assent.........................................................5
ARTICLE IV
OFFICERS........................................................................................5
Section 1. Number........................................................................5
Section 2. Election and Term of Office...................................................5
Section 3. Removal.......................................................................5
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<PAGE>
Section 4. Vacancies.....................................................................5
Section 5. The President.................................................................6
Section 6. The Vice Presidents...........................................................6
Section 7. The Secretary.................................................................6
Section 8. The Treasurer.................................................................7
Section 9. Assistant Secretaries and Assistant Treasurers................................7
Section 10. Salaries......................................................................7
ARTICLE V
CONTRACTS, LOANS. CHECKS AND DEPOSITS..........................................................7
Section 1. Contracts.....................................................................7
Section 2. Loans.........................................................................7
Section 3. Checks, Drafts, Etc...........................................................8
Section 4. Deposits......................................................................8
ARTICLE VI
CERTIFICATES FOR SHARES AND THEIR TRANSFER......................................................8
Section 1. Certificates for Shares.......................................................8
Section 2. Transfer of Shares............................................................8
ARTICLE VII
TAXABLE YEAR....................................................................................8
ARTICLE VIII
DIVIDENDS.......................................................................................8
ARTICLE IX
SEAL............................................................................................9
ARTICLE X
WAIVER OF NOTICE................................................................................9
ARTICLE XI
AMENDMENTS......................................................................................9
</TABLE>
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<PAGE>
BY-LAWS
OF
HYDRO FLAME ENTERPRISES, INC.
ARTICLE I
OFFICES:
The principal office of the Corporation in the State of Utah
shall be located at 1874 South Pioneer Road, Salt Lake City, Utah, 84104. The
Corporation may have such other offices, either within or without the State of
Utah, as the Board of Directors may designate or as the business
of the Corporation may from time to time require.
The Registered Office of the Corporation required by the Utah
Business Corporation Act to be maintained in the State of Utah may be, but need
not be, identical with the principal office in the State of Utah and the address
of the Registered Office may be changed from time to time by the Board of
Directors.
ARTICLE II
SHAREHOLDERS:
SECTION 1. ANNUAL MEETING. The Annual Meeting of the Shareholders shall
be held on the 18th day of January, 1989, at the hour of 10:00 a.m., beginning
with the day following the filing of the Articles of Incorporation or as soon
thereafter as reasonably possible, for the purpose of electing Directors and for
the transaction of such other business as may come before the meeting. If the
day fixed for the Annual Meeting shall fall on a legal holiday in the State of
Utah, such meeting shall be held on the next succeeding business day. If the
election of Directors shall not be held on the day designated herein for any
Annual Meeting of the shareholders, or at any adjournment thereof, the Board of
Directors shall cause such election to be held at a Special Meeting of the
Shareholders as soon as it may be conveniently held thereafter.
SECTION 2. SPECIAL MEETING. Special Meetings of the Shareholders for
any purpose or purposes, unless otherwise prescribed by statute, may be called
by the President, by any two (2) Directors, or by any group of Shareholders
owning shares which taken together would be entitled to not less than one-third
(1/3) of the total number of votes of all outstanding shares of all classes
entitled to vote upon any matter submitted to a vote at a meeting of the
Shareholders.
SECTION 3. PLACE OF MEETING. The Board of Directors may designate any
place, either within or without the State of Utah, as the place of meeting for
any Annual Meeting or for any Special Meeting called by the Board of Directors.
A Waiver of Notice, signed by all Shareholders entitled to vote at a meeting,
may designate any place, either within or without the State of Utah, as the
place for holding such meeting. If no designation is made or if a Special
Meeting is otherwise called, the place
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<PAGE>
of meeting shall be the Registered Office of the Corporation in the State of
Utah.
SECTION 4. NOTICE OF MEETING. Written or printed notice stating the
place, day and hour of the meeting, and in case of a Special Meeting, the
purpose or purposes for which the meeting is called, shall be delivered to not
less than ten (10) nor more than fifty (50) days before the date of the meeting,
either personally or by mail, by or at the direction of the President, Vice
President, Secretary or the officer or persons calling the meeting, to each
Shareholder of record entitled to vote at such meeting. If mailed, such notice
shall be deemed to be delivered when deposited in the United States mails
addressed to the Shareholder at his address as it appears on the stock transfer
books of the Corporation, with postage prepaid. Provided, however, a Waiver of
Notice, in writing, signed by all of the Shareholders, shall be the equivalent
to the giving of such notice.
SECTION 5. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE. For the
purposes of determining Shareholders entitled to notice of, or to vote at, any
meeting of Shareholders, or any adjournment thereof, or Shareholders entitled to
receive payment of any dividend, or in order to make a determination of
Shareholders for any other proper purpose, the Board of Directors of the
Corporation may provide that the stock transfer books shall be closed for a
stated period, but not to exceed in any case fifty (50) days. If the stock
transfer books shall be closed for the purpose of determining Shareholders
entitled to notice of, or to vote at, a meeting of Shareholders, such books
shall be closed for at least ten (10) days immediately preceding such meeting.
In lieu of closing the stock transfer books, the Board of Directors may fix in
advance a date as a record date for any such determination of Shareholders. Such
date in any case shall not be more than fifty (50) days and, in case of a
meeting of Shareholders, not less than ten (10) days prior to the date on which
the particular action is to be taken. If the stock transfer books are not closed
and no record date is fixed for the determination of Shareholders entitled to
notice of, or to vote at, a meeting of Shareholders, or Shareholders entitled to
receive payment of a dividend, the date on which notice of the meeting is mailed
or the date on which the resolution of the Board of Directors declaring such
dividend is adopted, as the case may be, shall be the record date f or such
determination of Shareholders. When a determination of Shareholders has been
made as provided in this Section, such determination shall apply to any
adjournment thereof.
SECTION 6. VOTING LISTS. The officer or agent having charge of the
stock transfer books for shares of the Corporation shall make, at least ten (10)
days before each meeting of Shareholders, a complete list of Shareholders
entitled to vote at such meeting, or any adjournment thereof, arranged in
alphabetical order, with the address of and the number of shares held by each,
which list, for a period of ten (10) days prior to such meeting, shall be kept
on file at the Registered Office of the Corporation and shall be subject to
inspection by any Shareholder at any time during the usual business hours. Such
list shall also be produced and kept open at the time and place of the meeting
and shall be subject to the inspection of any Shareholder during the whole time
of the meeting. The original stock transfer book shall be prima facie evidence
as to who are the Shareholders entitled to examine such list or transfer books
or to vote at any meeting of Shareholders.
SECTION 7. QUORUM. One or more Shareholders owning shares which taken
together would be entitled to more than one-half (1/2) of the total number of
votes of all outstanding shares of all classes entitled to vote upon any matter
submitted to a vote at a regular meeting of Shareholders, represented in person
or by proxy, shall constitute a quorum at a meeting of Shareholders. If less
than
2
<PAGE>
such number of Shareholders are so represented at a meeting, a majority of the
shares so represented may adjourn the meeting from time to time without further
notice. At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally notified. The Shareholders present at a duly organized
meeting may continue to transact business until adjournment, notwithstanding the
withdrawal of enough Shareholders to leave less than a quorum.
SECTION 8. PROXIES. At all meetings of Shareholders, a Shareholder may
vote by proxy executed in writing by the Shareholders or by his duly authorized
attorney-in-fact. Such proxy shall be filed with the Secretary of the
Corporation before or at the time of the meeting. No proxy shall be valid after
eleven (11) months from the date of its execution, unless otherwise provided in
the proxy.
SECTION 9. VOTING SHARES. Each outstanding share of common stock shall
be entitled to one (1) vote upon each matter submitted to a vote at a meeting of
Shareholders. At any meeting in which Directors are to be elected, as provided
by these By-Laws, all of the Directors of the Corporation shall be elected in
one (1) vote by the Shareholders from among the nominees by plurality vote, in
which every Shareholder entitled to vote at such election shall have the right
to vote, in person or by proxy, the number of shares owned by him f or as many
persons as there are- directors to be elected and for whose election he has a
right to vote. Any other matters to be decided upon by the Shareholders, other
than the election of Directors, shall be decided by majority vote, except as
otherwise provided in these By-Laws, the Certificate of Incorporation or the
laws of the State of Utah.
SECTION 10. VOTING OF SHARES BY CERTAIN HOLDERS. Shares standing in
the name of another corporation may be voted by such officer, agent or proxy as
the By-Laws of such corporation may prescribe, or in the absence of such
provision, as the Board of Directors of such corporation may determine.
Shares held by an administrator, executor, guardian or
conservator may be voted by him, either in person or by proxy, without a
transfer of such shares into his name. Shares standing in the name of a trustee
may be voted by him either in person or by proxy, but no trustee shall be
entitled to vote shares held by it without a transfer of such shares into his
name.
Shares standing in the name of a receiver may be voted by such
receiver, and shares held by, or under the control of a receiver, may be voted
by such receiver without the transfer thereof into his name, if authority so to
do be contained in an appropriate order of the court by which such
receiver was appointed.
A Shareholder whose shares are pledged shall be entitled to
vote such shares until the shares have been transferred into the name of the
pledgee, and thereafter the pledgee shall be entitled
to vote the shares so transferred.
Shares of its own stock belonging to the Corporation or held
by it in fiduciary capacity, shall not be voted, directly or indirectly, at any
meeting, and shall not be counted in determining the
total number of outstanding shares at any given time.
SECTION 11. INFORMAL ACTION BY SHAREHOLDERS. Any action required to be
taken at a meeting
3
<PAGE>
of the Shareholders, or any other action which may be taken at a meeting of the
Shareholders, may be taken without a meeting if a consent in writing, setting
forth the action so taken, shall be signed by all of the Shareholders entitled
to vote with respect to the subject matter thereof.
ARTICLE III
BOARD OF DIRECTORS:
SECTION 1. GENERAL POWERS. The business and affairs of the Corporation
shall be managed by its Board of Directors.
SECTION 2. NUMBER, TENURE AND QUALIFICATIONS. The number of
Directors of the Corporation shall be not less than three (3) nor more than
five (5); provided that for so long as the Corporation has fewer than three
(3) shareholders entitled to vote for the election of Directors, the number
of Directors shall not be less than two (2) nor more than five (5). Each
Director shall hold office until the next Annual Meeting of Shareholders and
until his successor shall have been elected and qualified. Directors need not
be residents of the State of Utah or Shareholders of the Corporation.
SECTION 3. REGULAR MEETING. A regular meeting of the Board of Directors
shall be held without notice other than by this By-Law immediately after, and at
the same time as the Annual Meeting of Shareholders. The Board of Directors may
provide by resolution the time and place, either within or without the State of
Utah, for the holding of additional regular meetings without other notice than
such resolution.
SECTION 4. SPECIAL MEETINGS. Special Meetings of the Board of Directors
may be called by, or at the request of the President or any of the Directors.
The person or persons authorized to call Special Meetings of the Board of
Directors may fix any place, either within or without the State of Utah, as the
place for holding any Special Meeting of the Board of Directors called by them.
SECTION 5. NOTICE. Notice of any Special Meeting shall be given at
least two (2) days previously thereto by written notice delivered personally or
mailed to each Director at his business address, or by telegram. If mailed, such
notice shall be deemed to be delivered when deposited in the United States mails
so addressed, with postage thereon prepaid. If notice be given by telegram, such
notice shall be deemed to be delivered when the telegram is delivered to the
telegraph company. Any Director may waive notice of any meeting. The attendance
of a Director at a meeting shall constitute a Waiver of Notice of such meeting,
except where a Director attends a meeting for the express purpose of objecting
to the transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted or the purpose of any regular or
special meeting of the Board of Directors need be specified in the Waiver of
Notice of such meeting.
SECTION 6. QUORUM. A majority of the Directors shall constitute a
quorum for the transaction of business at any meeting of the Board of Directors.
SECTION 7. MANNER OF ACTING. The act of the majority of the Directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors.
SECTION 8. VACANCIES. Any vacancy occurring in the Board of Directors
may be filled by the affirmative vote of a majority of the remaining Directors
though less than a quorum of the Board
4
<PAGE>
of Directors. A Director elected to fill a vacancy shall be elected for the
unexpired term of his predecessor in office. Any directorship to be filled by
reason of an increase in the number of Directors shall be filled by election at
an Annual Meeting or at a Special Meeting of Shareholders called for that
purpose.
SECTION 9. COMPENSATION. By resolution of the Board of Directors the
Directors may be paid their expenses, if any, of attendance at each meeting of
the Board of Directors and may be paid a fixed sum for attendance at each
meeting of the Board of Directors or a stated salary as Director. No such
payment shall preclude any Director from serving the Corporation in any other
capacity and receiving compensation therefor.
SECTION 10. PRESUMPTION OF ASSENT. A Director of the Corporation who is
present at a meeting of the Board of Directors at which action on any corporate
matter is taken shall be presumed to have assented to the action taken unless
his dissent shall be entered into the minutes of the meeting or unless he shall
file his written dissent to such action with the person acting as the Secretary
of the meeting before the adjournment thereof or shall forward such dissent by
Registered Mail to the Secretary of the corporation immediately after the
adjournment of the meeting. Such right to dissent shall not apply to a Director
who voted in favor of such action.
ARTICLE IV
OFFICERS:
SECTION 1. NUMBER. The officers of the Corporation shall be a
President, none, one or more Vice Presidents (the number thereof to be
determined by the Board of Directors), a Secretary, and a Treasurer, each of
whom shall be elected by the Board of Directors. Such other officers and
assistant officers as may be deemed necessary may be elected or appointed by the
Board of Directors. Any two or more offices, other than the offices of President
and Secretary, may be held by the same person.
SECTION 2. ELECTION AND TERM OF OFFICE. The officers of the Corporation
to be elected by the Board of Directors shall be elected annually by the Board
of Directors at the First Meeting of the Board of Directors held after each
Annual Meeting of the Shareholders. If the election of Officers shall not be
held at such meeting, such election shall be held as soon thereafter as
conveniently may be. Each officer shall hold of f ice until his successor shall
have been duly elected and shall have qualified or until his death or until he
shall resign or shall have been removed in the manner hereinafter provided.
SECTION 3. REMOVAL. Any officer or agent elected or appointed by the
Board of Directors may be removed by the Board of Directors whenever in its
judgment the best interests of the corporation would be served thereby, but such
removal shall be without prejudice to the contract rights, if any, of the person
so removed.
SECTION 4. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification, or otherwise, may be filled by the Board
of Directors for the unexpired portion of the term.
5
<PAGE>
SECTION 5. THE PRESIDENT. The President shall be the principal
executive officer of the Corporation, and subject to the control of the Board of
Directors, shall in general supervise and control all the business and affairs
of the Corporation. The President shall, when present, preside at all meetings
of the Shareholders and of the Board of Directors. If the President of the
Corporation is not present, then the Vice President shall preside. The President
may sign, with the Secretary or any other proper Officer of the Corporation
authorized by the Board of Directors, certificates for shares of the
Corporation, any deeds, mortgages, bonds, contracts, or other instruments which
the Board of Directors has authorized to be executed, except in cases where the
signing and execution thereof shall be expressly delegated by the Board of
Directors or by these By-laws to some other officer or agent of the Corporation,
or shall be required by law to be otherwise signed or executed. The President
shall, in general, perform all duties incident to his office and such other
duties as may be prescribed by the Board of Directors from time to time.
SECTION 6. THE VICE PRESIDENTS. In the absence of the President, or in
the event of his/her death, inability or refusal to act, the Vice President (or
in the event there be more than one Vice President, the Vice Presidents in the
order designated at the time of their election, or in the absence of any
designation, in the order of their election), shall perform the duties of the
President, and when so acting, shall have all the powers of, and be subject to
all the restrictions upon the President. Any Vice President may sign, with the
Secretary or an Assistant Secretary, certificates for shares of the Corporation,
and shall perform such other duties as from time to time may be assigned to him
by the President or by the Board of Directors.
SECTION 7. THE SECRETARY. The Secretary shall:
(a) Keep the minutes of the Shareholders' and of the
Board of Directors' meetings in one or more books
provided for that purpose;
(b) See that all notices are duly given in accordance
with the provisions of these
By-Laws or as required by law;
(c) Be custodian of the corporate records and of the seal
of the Corporation and see that the seal of the
Corporation is affixed to all, documents, the
execution of which on behalf of the Corporation under
its seal is duly authorized;
(d) Keep a register of the post office address of each
Shareholder which shall be furnished to the Secretary
by such Shareholders.
(e) Sign with the President, or a Vice President,
certificates for shares of the Corporation, the
issuance of which shall have been authorized by
resolution of the Board of Directors;
(f) Have general charge of the stock transfer books of
the Corporation; and
(g) In general, perform all duties incident to the office
of Secretary and such other duties as from time to
time may be assigned to him by the President, or by
the Board of Directors.
6
<PAGE>
SECTION 8. THE TREASURER. If required by the Board of Directors, the
Treasurer shall give a bond for the faithful discharge of his duties in such sum
and with such surety or sureties as the Board of Directors shall determine. He
shall:
(a) Have charge and custody of, and be responsible
for, all funds and securities of the Corporation,
receive and give receipts for monies due and
payable to the Corporation from any source
whatsoever, and deposit all such monies in the
name of the Corporation in such banks, trust
companies or other depositories as shall be
selected in accordance with the provisions of
ARTICLE V of these By-laws;
(b) In general, perform all of the duties incident to
the office of Treasurer and such other duties as
from time to time may be assigned to him by the
President or by the Board of Directors.
SECTION 9. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. The
Assistant Secretaries, when authorized by the Board of Directors, may sign with
the President or a Vice President, certificates for shares of the Corporation,
the issuance of which shall have been authorized by a resolution of the Board of
Directors.
The Assistant Treasurers shall respectively, if required by
the Board of Directors, give bonds for the faithful discharge of their duties in
such amounts and with such sureties as the Board of
Directors shall determine.
The Assistant Secretaries and Assistant Treasurers, in
general, shall perform such duties as shall be assigned to them by the Secretary
or the Treasurer, respectively, or by the President or the
Board of Directors.
SECTION 10. SALARIES. The salaries of the officers shall be fixed from
time to time by the Board of Directors and no officer shall be prevented from
receiving such salary by reason of the fact that he is also a Director of the
Corporation.
ARTICLE V
CONTRACTS, LOANS, CHECKS AND DEPOSITS:
SECTION 1. CONTRACTS. The Board of Directors may authorize any officer
or officers, agent or agents, to enter into any contract or execute and deliver
any instrument in the name of, and on behalf of, the Corporation and such
authority may be general or confined to specific instances.
SECTION 2. LOANS. No loans shall be construed on behalf of the
corporation, and no evidences of indebtedness shall be issued on its name unless
authorized by a resolution of the Board of Directors.
7
<PAGE>
SECTION 3. CHECKS, DRAFTS, ETC. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued in the
name of the corporation shall be signed by such officer or officers, agent or
agents of the corporation and in such manner as shall from time to time be
directed and determined by resolution of the Board of Directors.
SECTION 4. DEPOSITS. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
in such banks, trust companies or other depositories as the Board of Directors
may select.
ARTICLE VI
CERTIFICATES FOR SHARES AND THEIR TRANSFER:
SECTION 1. CERTIFICATES FOR SHARES. Certificates representing shares of
the Corporation shall be in such form as shall be determined by the Board of
Directors. Such certificates shall be signed by the President or a Vice
President, and by the Treasurer or Secretary. All certificates for shares shall
be consecutively numbered or otherwise identified. The name and address of the
person to whom the shares represented thereby are issued, with the number of
shares and date of issue, shall be entered on the stock transfer books of the
Corporation. All certificates surrendered to the Corporation for transfer shall
be cancelled and no new certificates shall be issued until the former
certificates for a like number of shares that have been surrendered and
cancelled, except that in case of a lost, destroyed or mutilated certificate a
new one may be issued therefor upon such terms and indemnity to the Corporation
as the Board of Directors may prescribe.
SECTION 2. TRANSFER OF SHARES. Transfer of shares of the Corporation
shall be made only on the stock transfer books of the Corporation by the holder
of record thereof or by his legal representative, who shall furnish proper
evidence of authority to transfer, or by his attorney thereunto authorized by
power of attorney, duly executed and filed with the Secretary of the
Corporation, and on surrender for cancellation of the certificate for such
shares. The person in whose name shares stand on the books of the Corporation
shall be deemed by the Corporation to be the owner thereof for all purposes.
ARTICLE VII
TAXABLE YEAR:
The taxable year of the Corporation shall be the calendar year
beginning on the 1st day of January, and ending on the 31st day of December.
ARTICLE VIII
DIVIDENDS:
The Board of Directors may from time to time declare, and the
Corporation may pay, dividends on its outstanding shares in the manner and upon
the terms and conditions provided by law.
8
<PAGE>
ARTICLE IX
SEAL:
The Board of Directors shall provide a corporate seal which
shall be circular in form and shall have inscribed thereon the name of the
Corporation and the state of incorporation and the words "Corporate Seal."
ARTICLE X
WAIVER OF NOTICE:
Whenever any notice is required to be given to any Shareholder
or Director of the Corporation under the provisions of these By-Laws or under
the provisions of the Articles of Incorporation or under the provisions of the
Utah Business Corporation Act, a waiver thereof in writing, signed by the person
or persons entitled to such notice, whether before or after the time stated
therein, shall be deemed equivalent to the giving of such notice.
ARTICLE XI
AMENDMENTS:
The power to alter, amend or repeal the By-Laws or adopt new
By-Laws, subject to repeal or change by action of the Shareholders shall be
vested in the Board of Directors. No By-Laws shall be adopted by the Directors
which shall require more than a majority of the voting shares for a quorum at a
meeting of Shareholders, or more than a majority of the votes cast to constitute
action by the Shareholders, except where higher percentages are required by law
or by the Articles of Incorporation.
ADOPTED this 18th day of January, 1989.
DIRECTORS:
Signatures not legible
--------------------------------
--------------------------------
--------------------------------
9
<PAGE>
FORM B C A-47
BEFORE ATTEMPTING TO EXECUTE THESE BLANKS BE
SURE TO READ CAREFULLY THE INSTRUCTIONS
ON THE BACK THEREOF.
(THESE ARTICLES MUST BE FILED IN DUPLICATE)
STATE OF ILLINOIS, )
) ss.
COOK COUNTY )
TO ALAN J. DIXON, Secretary of State
The undersigned,
Address
Name Number Street City State
Jack Holcomb 55 East Monroe St., Suite 4100 Chicago , Illinois
being one or more natural persons of the age of twenty-one years or more or a
corporation, and having subscribed to shares of the corporation to be organized
pursuant hereto, for the purpose of forming a corporation under "The Business
Corporation Act" of the State of Illinois, do hereby adopt the following
Articles of Incorporation:
ARTICLE ONE
The name of the corporation hereby incorporated is: Tri-M, Inc.
ARTICLE TWO
The ADDRESS of its initial registered office in the State of Illinois is: 55 E.
Monroe St., Suite 4100, in the city of Chicago (60603) County of Cook and the
NAME of its initial Registered Agent at SAID ADDRESS is: Michael E. C. Moss
ARTICLE THREE
The duration of the corporation is: Perpetual
<PAGE>
ARTICLE FOUR
The purpose or purposes for which the corporation is organized are:
To conduct a general manufacturing business, to design, produce,
manufacture, sell and distribute articles fabricated from metals,
woods, plastics and other substances or combinations thereof; to design
and product tools, dies, jigs, and fixtures, and to perform such other
similar or connected business as the corporation might from time to
time see fit to engage in;
To buy, sell, franchise, lease as lessor or lessee, own, use, convey,
and deal in and with goods, wares, merchandise and personal and real
property or any interest therein;
To acquire, own, use convey and otherwise dispose of and deal in real
property or any interest therein;
To engage in any lawful act or activities for which corporations may be
organized under the Illinois Business Corporation Act, relative to the
foregoing.
ARTICLE FIVE
PARAGRAPH 1: The aggregate number of shares which the corporation is authorized
to issue is 1,000, divided into One (1) classes. The designation of each class,
the number of shares of each class, and the par value, if any, of the shares of
each class, or a statement that the shares of any class are without par value,
are as follows:
<TABLE>
<CAPTION>
Series Number of Par value per share or statement that shares
Class (If any) Shares are without par value
<S> <C> <C> <C>
Common None 1,000 $1.00 par value
</TABLE>
PARAGRAPH 2: The preferences, qualifications, limitations, restrictions and the
special or relative rights in respect of the shares of each class are:
none
<PAGE>
ARTICLE SIX
The class and number of shares which the corporation proposes to issue
without further report to the Secretary of State, and the consideration
(expressed in dollars) to be received by the corporation therefor, are:
<TABLE>
<CAPTION>
Total consideration to be
Class of Shares Number of shares received therefor:
<S> <C> <C>
Common 1,000 $1,000.00
</TABLE>
ARTICLE SEVEN
The corporation will not commence business until at least one thousand
dollars has been received as consideration for the issuance of shares.
ARTICLE EIGHT
The number of directors to be elected at the first meeting of the
shareholders is: Three (3)
ARTICLE NINE
PARAGRAPH 1: It is estimated that the value of all property to be owned by the
corporation for the following year wherever located will be $__________
PARAGRAPH 2: It is estimated that the value of all property to be located within
the State of Illinois during the following year will be $__________
PARAGRAPH 3: It is estimated that the gross amount of business which will be
transacted by the corporation during the following year will be $__________
PARAGRAPH 4: it is estimated that the gross amount of business which will be
transacted at or from places of business in the State of Illinois during the
following year will be $__________
NOTE: If all the property of the corporation is to be located in this
State and all of its business is to be transacted as or from places of business
in this Tate, or if the incorporators elect to pay the initial franchise tax on
the basis of its entire stated capital and paid-in surplus, then the information
called from in Article Nine need not be stated.
<PAGE>
/s/ Jack Holcomb ) Incorporators
--------------------------------
NOTE: There may be one or more incorporators. Each incorporator shall
be either a corporation, domestic or foreign, or a natural person of the age of
twenty-one years or more. If a corporation acts as incorporator, the name of the
corporation and state of incorporation shall be shown and the execution must be
by its President or Vice-President and verified by him, and the corporate seal
shall be affixed and attested by its Secretary or an Assistant Secretary.
OATH AND ACKNOWLEDGMENT
STATE OF ILLINOIS )
) ss.
COOK COUNTY )
I, THERESE COUGHLAN, A Notary Public, do hereby certify that on the 6th
day of July 1979 Jack Holcomb personally appeared before me being first duly
sworn by me acknowledged the signing of the foregoing document in the respective
capacities therein set forth and declared that the statement therein contained
are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal the day and
year above written.
Place
(NOTARIAL SEAL) /s/ Therese Coughlan
-----------------------
Here) Notary Public
<PAGE>
JIM EDGAR
Secretary of State
State of Illinois
ARTICLES OF AMENDMENT
Pursuant to the provisions of "The Business Corporation Act of 1983", the
undersigned corporation hereby adopts these Articles of Amendment to its
Articles of Incorporation.
ARTICLE ONE The name of the corporation is ATWOOD INDUSTRIES, INC.(Note 1)
ARTICLE TWO The following amendment of the Articles of
Incorporation was adopted on May 19, 1987 in the
manner indicated below. ("X" one box only.)
/ / By a majority of the incorporation, provided no
directors were named in the articles of incorporation
and no directors have been elected; or by a majority
of the board of directors, in accordance with Section
10.10, the corporation having issued no shares as of
the time of adoption of this amendment; (Note 2)
/ / By a majority of the board of directors, in
accordance with Section 10.15, shares having been
issued but shareholder action bot being required for
the adoption of the amendment; (Note 3)
/ / By the shareholders, in accordance with Section
10.20, a resolution of the board of directors having
been duly adopted and submitted to the shareholders.
At a meeting of shareholders, not less than the
minimum number of votes required by statute and by
the articles of incorporation were voted in favor of
the amendment; (Note 4)
|X| By the shareholders, in accordance with Sections
10.20 and 7.10, a resolution of the board of
directors having been duly adopted and submitted to
the shareholders. A consent in writing has been
signed by shareholders having not less than the
minimum number of votes required by statute and by
the articles of incorporation. Shareholders who have
not consented in writing have been given notice in
accordance with Section 7.10; (Note 4)
/ / By the shareholders, in accordance with Sections
10.20 and 7.10, a resolution of the board of
directors have been duly adopted and submitted to the
shareholders. A consent in writing has been signed by
all the shareholders entitled to vote on this
amendment. (Note 4)
(INSERT AMENDMENT)
(any article being amended in required to be set forth in its entirety.)
(Suggested language for an amendment to change the corporate name is: RESOLVED,
that the Articles of Incorporation be amended to read as follows:)
- --------------------------------------------------------------------------------
(new Name)
All changes other than name include on page 2
(over)
<PAGE>
PAGE 2
RESOLUTION
1. Present class of common stock consisting of 1,000 shares of authorized
stock have a par value of $1.00 per share is hereby deleted.
2. A new class of common stock is hereby created consisting of 3,000,000
shares of common stock without par value.
3. The 1,000 issued shares of the common stock deleted by resolution 1.
above shall be exchanged at the ratio of 1 share of $1.00 par value
common stock for 2,000 shares of the new no par value common stock, and
the $1.00 par value common stock so exchanged is cancelled.
<PAGE>
ARTICLE THREE The manner, if not set forth in the amendment,
in which any exchange, reclassification or
cancellation of issued shares, or a reduction of the
number of authorized shares of any class below the
number of issued shares of that class, provided for
or effected by this amendment, is as follows: (If not
applicable, insert "No change")
One share of $1.00 par value common stock surrendered
for each 2,000 shares of no par value common stock
issued.
AMENDMENT FOUR (a) The manner, if not set forth in the
amendment, in which said amendment effects a change
in the amount of paid-in capital* is as follows: (IF
NOT APPLICABLE, INSERT "NO CHANGE")
no change
(b) The amount of paid-in capital* as changed by
this amendment is as follows: (IF NOT APPLICABLE,
INSERT "NO CHANGE")
no change
Before Amendment After Amendment
Paid-in Capital $_______________ $______________
The undersigned corporation has caused this statement to be signed by
its duly authorized officers, each of whom affirm, under penalties of perjury,
that the facts stated herein are true.
Dated: May 19, 1987 ATWOOD INDUSTRIES, INC.
attested by /s/ R. Steven Holdeman by /s/ John R. Henriksen
------------------------------ ----------------------------
R. Steven Holdeman, Secretary John R. Henriksen, President
* "Paid-in Capital" replaces the terms Stated Capital and Paid-in
Surplus and is equal to the total of these accounts.
<PAGE>
-------------------
STATEMENT OF
CHANGE
OF REGISTERED AGENT
AND/OR REGISTERED
OFFICE
--------------------
1. CORPORATE NAME: ATWOOD INDUSTRIES, INC.
2. STATE OR COUNTRY OF INCORPORATION: ILLINOIS
3. Name and address of the registered agent and registered office as they
appear on the records of the office of the Secretary of State (before
change):
Registered Agent John R. Beuster
Registered Office 1400 Eddy Avenue
Rockford, Illinois 61103 Winnebago County
4. Name and address of the registered agent and registered office shall be
(after all changes herein reported):
Registered Agent Robert A. Pickering
Registered Office 4750 Hiawatha Avenue
Rockford, Illinois 61103-1298 Winnebago County
<PAGE>
5. The address of the registered office and the address of the business
office of the registered agent, as changed, will be identical.
6. The above change was authorized by: ("X" one box only)
a. o By resolution duly adopted by the board of directors (Note 5)
b. o by action of the registered agent (Note 6)
NOTE: When the registered agent changes, the signatures of both president
and secretary are required.
7. (IF AUTHORIZED BY THE BOARD OF DIRECTORS, SIGN HERE. SEE NOTE 5)
The undersigned corporation has caused this statement to be signed by
its duly authorized officers, each of whom affirms, under penalties of perjury,
that the facts stated herein are true.
Dated: November 12, 1997 ATWOOD INDUSTRIES, INC.
attested by: /s/ Joseph A. Robinson by /s/ James O. Futterknecht, Jr.
---------------------------- ------------------------------------
Joseph A. Robinson, Secretary James O. Futterknecht, Jr., President
(If change of registered office by registered agent, sign here. See Note 6)
The undersigned, under penalties of perjury, affirms that the facts
stated herein are true.
Dated: ____________________, 19___ ________________________________________
(Signature of Registered Agent of Record)
NOTES
1. The registered office may, but need not be the same as the principal
office of the corporation. However, the registered office and the
office address of the registered agent must be the same.
2. The registered office must include a street or road address; a post
office box number alone is not acceptable.
3. A corporation cannot act as it sown registered agent.
4. If the registered office is changed from one county to another, then
the corporation must file with the recorder of deeds of the new county
a certified copy of the articles of incorporation and a certified copy
of the statement of change of registered office. Such certified copies
may be obtained ONLY from the Secretary of State.
5. Any change of REGISTERED AGENT must be by resolution adopted by the
board of directors. This statement must then be signed by the president
(or vice-president) and by the secretary (or an assistant secretary).
6. The registered agent may report a change of the REGISTERED OFFICE of
the corporation for which he or she is registered agent. When the agent
reports such a change, this statement must be signed by the registered
agent.
<PAGE>
BY-LAWS
OF
ATWOOD INDUSTRIES, INC.
ARTICLE I
OFFICES
The corporation shall have and continuously maintain in the State of
Illinois a registered office and a registered agent whose office is identical
with such registered office, and may have other offices within or without a
state.
ARTICLE II
SHAREHOLDERS
SECTION 2.1. ANNUAL MEETING. An annual meeting of the shareholders
shall be held at such time as may be provided by resolution of the Board of
Directors.
SECTION 2.2. SPECIAL MEETINGS. Special meetings of the shareholders
may be called either by the chairman, president, by the board of directors or by
the holders of not less than one-fifth of all the outstanding shares of the
corporation, for the purpose or purposes stated in the call of the meeting.
SECTION 2.3. PLACE OF MEETING. The board of directors may designate
any place, as the place of meeting for any annual meeting or for any special
meeting called by the board of directors. If no designation is made, or if a
special meeting be otherwise called, the place of meeting shall be at the
registered office of the corporation.
SECTION 2.4. NOTICE OF MEETINGS. Written notice stating the place,
date, and hour of the meeting, and in the case of a special meeting, the purpose
or purposes for which the meeting is called, shall be delivered not less than
ten nor more than sixty days before the date of the meeting, or in the case of a
merger or consolidation, share exchange, dissolution or sale, lease or exchange
of assets, not less than twenty nor more than sixty days before the meeting,
either personally or by mail, by or at the direction of the chairman, president,
or the secretary, or the officer of persons calling the meeting, to each
shareholder of record entitled to vote at such meeting. If mailed, such notice
shall be deemed to be delivered when deposited in the United States mail,
addressed to the shareholder at his address as it appears on the records of the
corporation, with postage thereon prepaid. When a meeting is adjourned to
another time or place, notice need not be given of the adjournment meeting if
the time and place thereof are announced at the meeting at which the adjournment
is taken.
<PAGE>
SECTION 2.5. FIXING OF RECORD DATE. For the purpose of determining the
shareholders entitled ro notice of or to vote at any meting of shareholders or
any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or to receive payment of any dividend, or other distribution
or allotment of any rights, or to exercise any rights in respect of any change,
conversion or exchange of shares or for the purpose of any other lawful action,
the board of directors of the corporation may fix in advance a record date which
shall not be more than sixty days and, for a meeting of shareholders, not less
than ten days, or in the case of a merger or consolidation, share exchange,
dissolution or sale, lease or exchange of assets, not less than twenty days,
before the date of such meeting. If no record date is fixed, the record date for
the determination of shareholders entitled to notice of or to vote at a meeting
of shareholders shall be the date on which notice of the meeting is mailed and
the record date for the determination of shareholders for any other purpose
shall be the date on which the board of directors adopts the resolution relating
thereto. A determination of shareholders of record entitled to notice of or to
vote at a meeting of shareholders shall apply to any adjournment of the meeting.
SECTION 2.6. VOTING LISTS. The officer or agent having charge or the
transfer books for shares of the corporation shall make, within 20 days after
the record date for a meeting of shareholders or at least ten days before each
meeting of shareholders, whichever is earlier, a complete list of the
shareholders entitled to vote at such meeting, arranged in alphabetical order,
showing the address of and the number of shares registered in the name of the
shareholder, which list, for a period of ten days prior to such meeting, shall
be kept on file at the registered office of the corporation and shall be open to
inspection by any shareholder, and to copying at the shareholder's expense, at
any time during usual business hours. Such list shall also be produced and kept
open at the time and place of the meeting and may be inspected by any
shareholder during the whole time of the meeting. The original share ledger or
transfer book, or a duplicate thereof kept in this State, shall be prima facie
evidence as to who are the shareholders entitled to examine such list or share
ledger or transfer book or to vote at any meeting of shareholders.
SECTION 2.7. QUORUM. The holders of a majority of the outstanding
shares of the corporation, present in person or represented by proxy, shall
constitute a quorum at any meeting of shareholders; provided that if less than a
majority of the outstanding shares are represented at said meeting, a majority
of the shares so represented may adjourn the meeting at any time without further
notice. If a quorum is present, the affirmative vote of the majority of the
shares represented at the meeting shall be the act of the shareholders, unless
the vote of a greater number or voting by classes is required by the Business
Corporation Act, the articles of incorporation. At any adjourned meeting at
which a quorum shall be present, any business may be transacted which might have
been transacted at the original meeting. Withdrawal of shareholders from any
meeting shall not cause failure of a duly constituted quorum at that meeting.
SECTION 2.8. PROXIES.
2.8.1 A shareholder may appoint a proxy to vote or otherwise
act for him or hereby signing an appointment form, and delivering it to the
person so appointed.
<PAGE>
2.8.2 No proxy shall be valid after the expiration of 11
months from the date thereof unless otherwise provided in the proxy. Every proxy
continues in full force and effect until revoked by the person executing it
prior to the vote pursuant thereto, except as otherwise provided in this
Section. Such revocation may be effected by a writing delivered to the
corporation stating that the proxy is revoked or by a subsequent proxy executed
by, or by attendance at the meeting and voting in person by, the person
executing the proxy. The dates contained on the forms of proxy presumptively
determine the order of execution, regardless of the postmark dates on the
envelopes in which they are mailed.
2.8.3 An appointment of a proxy is revocable by the
shareholder unless the appointment form conspicuously states that it is
irrevocable and the appointment is coupled with an interest in the shares or in
the corporation generally. By way of example and without limiting the generality
of the foregoing, a proxy is coupled with an interest when the proxy appointed
is one of :he following:
2.8.3.1 a pledgee;
2.8.3.2 a person who has purchased or has agreed
to purchase the shares:
2.8.3.3 a creditor of the Corporation who has
extended it credit under terms requiring the appointment, if
the appointment states the purpose for which it was given,
the name of the creditor, and the amount of credit extended;
2.8.3.4 an employee of the corporation whose
employment contract requires the appointment, if the
appointment states the purpose for which it was given, the
name of the employee, and the period of employment; or
2.8.3.5 a party to a voting agreement created
under the Business Corporation Act of 1983.
2.8.4 The death or incapacity of the shareholder appointing a
proxy does not revoke the proxy's authority unless notice of the death or
incapacity is received by the officer or agent who maintains the corporation's
share transfer book before the proxy exercises his or her authority under :he
appointment.
2.8.5 An appointment made irrevocable under subsection (c)
becomes revocable when the interest in the proxy terminates such as when the
pledge is redeemed, the shares registered in the purchaser's name, the
creditor's debt is paid, the employment contract ends, or the voting agreement
expires.
2.8.6 A transferee for value of shares subject to an
irrevocable appointment may revoke the appointment if the transferee was
ignorant or its existence when the share were acquired and both the existence of
the appointment and its irrevocability were not noted conspicuously on the
certificate (or information statement for shares without certificates)
representing the shares.
<PAGE>
2.8.7 Unless the appointment of a proxy contains an express
limitation on the proxy's authority, a corporation may accept the proxy's vote
or other action as that of the shareholder making the appointment. If the proxy
appointed fails to vote or otherwise act in accordance with the appointment, the
shareholder is entitled to such legal or equitable relief as is appropriate in
the circumstances.
SECTION 2.9. VOTING OF SHARES. Each outstanding share, regardless of
class, shall be entitled to one vote upon each matter submitted to vote at a
meeting of shareholders.
SECTION 2.10. VOTING OF SHARES BY CERTAIN HOLDERS. Shares of the
corporation held by the corporation in a fiduciary capacity may be voted and
shall be counted in determining :he total number of outstanding, shares entitled
to vote at any given time.
2.10.1 Shares registered in the name of another corporation,
domestic or foreign, may be voted by any officer, agent, or proxy or other legal
representative authorized to vote such shares under the law of incorporation of
such corporation. A corporation may treat the chairman, president or other
person holding the position of chief executive officer of such other corporation
as authorized :o vote such shares, together with any other person indicated and
any other holder of an office indicated by the corporate shareholder to the
corporation as a person or an office authorized to vote such shares. Such
persons and offices indicated shall be registered by the corporation on the
transfer books for shares included in any voting list prepared in accordance
with the Business Corporation Act of 1983.
2.10.2 Shares registered in the name of a deceased person, a
minor ward or a person under legal disability may be voted by his or her
administrator, executor, court appointed guardian, either in person or by proxy
without a transfer of such shares into the name of such administrator, executor,
or court appointed guardian. Shares registered in the name of a trustee may be
voted by him or her, either in person or by proxy.
2.10.3 Shares registered in the name of a receiver may be
voted by such receiver, and shares held by or under the control of a receiver
may be voted by such receiver without the transfer thereof into his or her name
if authority so to do is contained in an appropriate order of the court by which
such receiver was appointed.
2.10.4 A shareholder whose shares are pledged shall be
entitled to vote such shares until the shares have been transferred into the
name of the pledgee, and thereafter the pledgee shall
be entitled to vote the shares so transferred.
2.10.5 Any number of shareholders may create a voting trust
for the purpose of conferring upon a trustee or trustees the right to vote or
otherwise represent their share, for a period not to exceed ten years, by
entering into a written voting trust agreement specifying the terms and
conditions of the voting trust, and by transferring their shares to such trustee
or trustees for the purpose of the agreement. Any such trust agreement shall not
become effective until a counterpart of the agreement is deposited with the
corporation at its registered office. The counterpart of the voting trust
agreement so deposited with the corporation shall be subject to the same right
of
<PAGE>
examination by a shareholder of the corporation, in person or by agent or
attorney, as is the record of shareholders of the corporation, and shall be
subject to examination by any holder of a beneficial interest in the voting
trust, either in person or by agent or attorney, at any reasonable time for any
proper purpose.
SECTION 2.11. CUMULATIVE VOTING. In all elections for directors, every
shareholder shall have the right to vote, in person or by proxy, the number of
shares owned by him, for as many persons as there are directors to be elected,
or to cumulate said shares, and give one candidate as many votes as the number
of directors multiplied by the number of his shares shall equal, or to
distribute them on the same principle among as many candidates as he shall see
fit.
SECTION 2.12. INSPECTORS. At any meeting of shareholders, the
presiding officer may, or upon the request of any shareholder shall, appoint one
or more persons as inspectors for such meeting.
2.12.1 Such inspectors shall ascertain and report the number
of shares represented at the meeting, based upon their determination of the
validity and effect of proxies; count all votes and report the results; and do
such other acts as are proper to conduct the election and voting with
impartiality and fairness to all the shareholders.
2.12.2 Each report of an inspector shall be in writing and
signed by him or by a majority of them if there be more than one inspector
acting at such meeting. If there is more than one inspector, the report of a
majority shall be the report of the inspectors. The report of the inspector or
inspectors on the number or shares represented at the meeting and the results of
the voting shall be prima facie evidence thereof.
SECTION 2.13. INFORMAL ACTION BY SHAREHOLDERS.
2.13.1 Unless otherwise provided in the articles or
incorporation or the Business Corporation Act, ant action required to be taken
at any annual or special meeting of the shareholders of the corporation, or any
other action which may be taken at a meeting of the shareholders, may be taken
without a meeting and without a vote, if a consent in writing, setting forth the
action so taken, shall be signed (i) by the holders of outstanding shares having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voting or (ii) by all of the shareholders entitled to vote with
respect to the subject matter thereof. If such consent is signed by less than
all of the shareholders entitled to vote, then such consent shall become
effective only if at least 5 days prior to the execution of the consent a notice
in writing is delivered to all the shareholders entitled to vote with respect to
the subject matter thereof and, after the effective date of the consent, prompt
notice of the taking of the corporation action without a meeting by less than
unanimous written consent shall be delivered in writing to those shareholders
who have not consented in writing.
2.13.2 In the event that the action which is consented to is
such as would have required the filing of a certificate under any Section of the
Business Corporation Act of 1983 if such action had been voted on by the
shareholders at a meeting thereof, the certificate filed under the
<PAGE>
Business Corporation Act such state, in lieu of any statement required by such
Business Corporation Act concerning any vote of shareholders, that written
consent has been delivered in accordance with the provisions of the Business
Corporation Act and that written notice has been delivered as provided in the
Business Corporation Act.
SECTION 2.14. VOTING BY BALLOT. Voting on any question or in any
election may be by voice unless the presiding officer shall order or any
shareholder shall demand that voting be by ballot.
ARTICLE III
DIRECTORS
SECTION 3.1. GENERAL POWERS. The business of the corporation shall be
managed by or under the direction of the board of directors.
SECTION 3.2. NUMBER, TENURE AND QUALIFICATIONS. The number of
directors of the corporation shall be not less than two nor more than eight.
Each director shall hold office until the next annual meeting of shareholders or
until his successor shall have been elected and qualified. Directors need not be
residents of Illinois or shareholders of the corporation. The number of
directors may be increased or decreased from time to time by the amendment of
this section; but no decrease shall have the effect of shortening the term of
any incumbent director.
3.2.1 A director may resign at any time by giving written
notice to the board of directors, its chairman, or to the president or secretary
of the corporation. A resignation is effective when the notice is given unless
the notice specifies a future date. The pending vacancy may be filled before the
effective date, but the successor shall not take office until the effective
date.
SECTION 3.3. REMOVAL OF DIRECTORS.
3.3.1 One or more of the directors may be removed, with or
without cause, at a meeting of shareholders by the affirmative vote of the
holders of a majority of the outstanding shares then entitled to vote at an
election of directors, except as follows:
3.3.1.1 No director shall be removed at a meeting of
shareholders unless the notice of such meeting shall state that a purpose of
the meeting is to vote upon the removal of one or more directors named in the
notice. Only the named director or directors may be removed at such meeting.
3.3.1.2 If the corporation has cumulative voting, and
if less than the entire board is to be removed, no director may be removed,
with or without cause, if the votes cast against his or her removal would be
sufficient to elect him or her if then cumulatively voted at an election of
the entire board of directors.
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3.3.1.3 If a director is elected by a class or series
of shares, he or she may be removed only by the shareholders of that class or
series.
3.3.2 The provisions of subsection (a) shall lot preclude the
circuit court of the county in which the corporation's registered office is
located from removing a director of the corporation from office in a proceeding
commenced either by corporation or by shareholders of the corporation holding at
least 10 percent of the outstanding shares of any class if the court finds (1)
the director is engaged in fraudulent or dishonest conduct or has grossly abused
his or her position to the detriment of the corporation, and (2) removal is in
the best interest of the corporation. If the court removes a director, it may
bar the director from reelection for a period prescribed by the court. If such a
proceeding is commenced by the shareholders, they shall make the corporation a
party defendant.
SECTION 3.4. REGULAR MEETINGS. A regular meeting of the board of
directors shall be held without other notice than this by-law, immediately after
the annual meeting of shareholders. The board of directors may provide, by
resolution, the time and place for the holding of additional regular meetings
without other notice than such resolution.
SECTION 3.5. SPECIAL MEETINGS. Special meeting of the board of
directors may be called by or at the request of the chairman, president or any
two directors. The person or persons authorized to call special meetings of the
board of directors may fix any place as the place for holding any special
meeting of the board of directors called by them.
SECTION 3.6. NOTICE. Notice of any special meeting shall be given at
least one day previous thereto by written notice to each director at his
business address. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail so addressed, with postage thereon prepaid.
If notice be given by telegram, such notice shall be deemed to be delivered when
the telegram is delivered to the telegram company. The attendance of a director
at any meeting shall constitute a waiver of notice of such meeting, except where
a director amends a meeting for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the board of directors need be specified in the
notice or waiver or notice of such meeting.
SECTION 3.7. QUORUM. A majority of the number of directors fixed by
these bylaws shall constitute a quorum for transaction of business at any
meeting of the board of directors, provided that if less than a majority of such
number of directors are present at said meeting, a majority of the directors
present may adjourn the meeting, at any time without further notice. At any time
the corporation has a variable range board of directors, a quorum shall consist
of a majority of the directors then in office, but not less than a majority of
the minimum number of directors specified for the variable range of the board
unless the articles of incorporation or these by-laws specify a greater number.
Members of the board of directors or of any committee of the board of directors
may participate in and act at any meeting of such board or committee through the
use of a conference telephone or other communications equipment by means of
which all persons participating in the meeting can hear each other.
Participation in such a meeting shall constitute attendance and presence in
person at the meeting of the person or persons so participating.
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SECTION 3.8. MANNER OF ACTING. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the board
of directors, unless the act of a greater number is required by statute, these
by-laws, or the articles of incorporation.
SECTION 3.9. VACANCIES. Any vacancy occurring in the board of directors
and any directorship to be filled by reason of an increase in the number of
directors, may be filled by election at an annual meeting or at a special
meeting of shareholders called for that purpose. In lieu of action by
shareholders at either an annual or special meeting, the board or directors by
resolution may fill the vacancy.
SECTION 3.10. ACTION WITHOUT A MEETING.
3.10.1 Unless specifically prohibited by the articles of
incorporation or by-laws, any action required to be taken at a meeting of the
board of directors, or any other action which may be taken at a meeting of the
board of directors, or of any committee thereof may be taken without a meeting
if a consent in writing, setting, forth the action so taken, shall be signed by
all the directors entitled to vote with respect to the subject matter thereof,
or by all the members of such committee, as the case may be.
3.10.2 The consent shall be evidenced by one or more written
approvals, each of which sets forth the action taken and bears the signature of
one or more directors. All the approvals evidencing the consent shall be
delivered to the secretary to be filed in the corporate records. The action
taken shall be effective when all the directors have approved the consent unless
the consent specified a different effective date.
3.10.3 Any such consent signed by all the directors or all the
members of a committee shall have the same effect as a unanimous vote, and may
be stated as such in any document filed with
the Secretary of State under this Act.
SECTION 3.11. COMPENSATION. The board of directors, by the affirmative
vote of a majority of directors then in office, and irrespective of any personal
interest of any of its members, shall have authority to establish reasonable
compensation of all directors for services to the corporation as directors,
officers, or otherwise. By resolution of the board of directors the directors
may be paid their expenses, if any, of attendance at each meeting of the board.
No such payment previously mentioned in this section shall preclude any director
from serving the corporation in any other capacity and receiving compensation
therefor.
SECTION 3.12. DIRECTOR CONFLICT OF INTEREST.
3.12.1 If a transaction is fair to a corporation at the time
it is authorized, approved, or ratified, the fact that a director of the
corporation is directly or indirectly a party to the transaction
is not grounds for invalidating the transaction.
<PAGE>
3.12.2 In a proceeding contesting the validity of a
transaction described in subsection (a), the person asserting validity has the
burden of proving fairness unless:
3.12.2.1 the material facts of the transaction and
the director's interest or relationship were disclosed or known to the board
of directors or a committee of the board and the board or committee
authorized, approved or ratified the transaction by the affirmative votes of
a majority of disinterested directors, even though the disinterested
directors be less than a quorum: or
3.12.2.2 the material facts of the transaction and
the director's interest or relationship were disclosed or known to the
shareholders entitled to vote and they authorized, approved or ratified the
transaction without counting the vote of any shareholder who is an interested
director.
3.12.3 The presence of the director, who is directly or
indirectly a parry to the transaction described in subsection (a), or a director
who is otherwise not disinterested, may be counted in determining whether a
quorum is present but may not be counted when the board of directors or a
committee of the board takes action on the transaction.
3.12.4 For purposes of this Section, a director is
"indirectly" a party to a transaction if the other party to the transaction is
an entity in which the director has a material financial interest or of which
the director is an officer, director or general partner.
SECTION 3.13. PRESUMPTION OF ASSENT. A director of the corporation who
is present at a meeting of the board of directors at which action on any
corporate matter is taken shall be conclusively presumed to have assented to the
action taken unless his dissent shall be entered in the minutes of the meeting
or unless he shall file his written dissent to such action with the person
acting as the secretary of the meeting before the adjournment thereof or shall
forward such dissent by registered mail to the secretary of the corporation
immediately after the adjournment of the meeting. Such right to dissent shall
not apply to a director who voted in favor of such action.
SECTION 3.14. COMMITTEES.
3.14.1 A majority of the directors may create one or more
committees and appoint members of the board to serve on the committee or
committees. Each committee shall have two or
more members, who serve at the pleasure of the board.
3.14.2 Unless the appointment by the board of directors
requires a greater number, a majority of any committee shall constitute a quorum
and a majority of a quorum is necessary for committee action. A committee may
act by unanimous consent in writing without a meeting and, subject to the
provisions of the by-laws or action by the board of directors, the committee by
majority vote or its members shall determine the time and place of meetings and
the notice required therefor.
<PAGE>
3.14.3 To the extent specified by the board of directors or in
the articles of incorporation or by-laws, each committee may exercise the
authority of the board of directors; provided, however, a committee may not:
3.14.3.1 authorize distributions, except for dividends to be
paid with respect to shares of any preferred or special classes or any
series thereof;
3.14.3.2 approve or recommend to shareholders any act
required to be approved by shareholders;
3.14.3.3 fill vacancies on the board or on any of its
committees;
3.14.3.4 elect or remove officers or fix the compensation of
any member of the committee;
3.14.3.5 adopt, amend or repeal the by-laws;
3.14.3.6 approve a plan of merger not requiring shareholder
approval;
3.14.3.7 authorize or approve reacquisition of shares,
except according to a general formula or method prescribed by the
board;
3.14.3.8 authorize or approve the issuance or sale, or
contract for sale, of shares or determine the designation and relative
rights, preferences, and limitations of a series of shares, except that the
board may direct a committee to fix the specific terms of the issuance or
sale or contract for sale or the number of shares to be allocated to
particular employees under an employee benefit plan; or
3.14.3.9 amend, alter, repeal, or take action
inconsistent with any resolution or action of the board of when resolution or
action of the board of directors provides by its terms that it shall not be
amended, altered or repealed by action of a committee.
3.14.4 EXECUTIVE COMMITTEE. The executive committee shall
consist of the Chairman, President, and Secretary. When the board of
directors is not in session, the executive committee shall have all the
powers, duties, responsibilities and authority of the board, except as
prohibited by law.
ARTICLE IV
OFFICERS
SECTION 4.1. NUMBER. The officers of the corporation shall be a
chairman, president, the number of vice-presidents, if any, as determined by the
board of directors, a treasurer, a secretary, and such assistant treasurers,
assistant secretaries or other officers as may be elected by the board of
directors. Any two or more offices may be held by the same person.
<PAGE>
SECTION 4.2. ELECTION AND TERM OF OFFICE. The officers of the
corporation shall be elected annually by the board of directors at the first
meeting of the board of directors held after each annual meeting of
shareholders. If the election of officers shall not be held at such meeting,
such election shall be held as soon thereafter as conveniently may be.
Vacancies may be filled or new officers created and filled at any meeting of
the board of directors. Each new officer shall hold office until his
successor shall have been duly elected and shall have qualified or until his
death or until he shall resign or shall have been removed in the manner
hereinafter provided. Election of an officer shall not of itself create
contact rights.
SECTION 4.3. REMOVAL. Any officer may be removed by the board of
directors whenever in its judgment the best interests of the corporation would
be served thereby, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed.
SECTION 4.4. CHAIRMAN. The chairman shall be the chief executive
officer of the corporation. He shall preside at all meetings of the shareholders
and of the board of directors. He shall have such other duties as may be
prescribed by the board of directors from time to time.
SECTION 4.5. PRESIDENT. The president shall be the chief operating
officer of the corporation. Subject to the direction and control of the chairman
and the board of directors, he shall be in charge of the business of the
corporation; he shall see that the resolutions and directors of the board of
directors are carried into effect except in those instances in which that
responsibility is specifically assigned to some other person by the board of
directors; and, in general, he shall discharge all duties incident to the office
of president and such other duties as may be prescribed by the board of
directors from time to time. In the absence of the chairman, he shall preside at
all meetings of the shareholders and of the board of directors. Except in those
instances in which the authority to execute is expressly delegated to another
officer or agent of the corporation or a different mode of execution is
expressly prescribed by the board of directors or these by-laws, he may execute
for the corporation certificates for its shares, and any contracts, deeds,
mortgages, bonds, or other instruments which the board of directors has
authorized to be executed, and he may accomplish such execution either under or
without the seal of the corporation and either individually or with the
secretary, any assistant secretary, or any other officer thereunto authorized by
the board of directors, according to the requirements of the form of the
instrument. He may vote all securities which the corporation is entitled to vote
except as and to the extent such authority shall be vested in a different
officer or agent of the corporation by the board of directors.
SECTION 4.6. THE VICE-PRESIDENTS. The vice-president (or in the event
there be more than one vice-president, each of the vice-presidents) shall assist
the president in the discharge of his duties as the president may direct and
shall perform such other duties as from time to time may be assigned to him by
the president or by the board of directors. In the absence of the president or
in the event of his inability or refusal to act, the vice-president (or in the
event there may be more than one vice-president, the vice- presidents in the
order designated by the board of directors, or by the president if the board of
directors has not made such a designation, or in the absence of any designation,
then in the order of seniority of tenure as vice-president) shall perform the
duties of the president, and when so acting, shall have all the powers of and be
subject to all the restrictions upon
<PAGE>
the president. Except in those instances in which the authority to execute is
expressly delegated to another officer or agent of the corporation or a
different mode of execution is expressly prescribed by the board of directors
or these by-laws, the vice-president (or each of them if there are more than
one) may execute for the corporation certificates for its shares and any
contracts, deeds, mortgages, bonds or other instruments which the board of
directors has authorized to be executed, and he may accomplish such execution
either under or without the seal of the corporation and either individually
or with the secretary, any assistant secretary, or any other officer
thereunto authorized by the board of directors, according to the requirements
of the form of the instrument.
SECTION 4.7. THE TREASURER. The treasurer shall be the principal
accounting and financial officer of the corporation. He shall: (a) have charge
of and be responsible for the maintenance of adequate books of account for the
corporation; (b) have charge and custody of all funds and securities of the
corporation, and be responsible therefore and for the receipt and disbursement
thereof; and (c) perform all the duties incident to the office of treasurer and
such other duties as from time to time may be assigned to him by the chairman,
president or by the board of directors. If required by the board of directors,
the treasurer shall give a bond for the faithful discharge of his duties in such
sum and with such surety as the board of directors may determine.
SECTION 4.8. THE SECRETARY. The Secretary shall: (a) record the minutes
of the shareholders' and of the directors' meetings in one or more books
provided for that purpose; (b) see that all notices are duly given in accordance
with the provisions of these bylaws or as required by law; (c) be custodian of
the corporate records and of the seal of the corporation; (d) keep a register of
the post-office address of each shareholder which shall be furnished to the
secretary by such shareholder; (e) sign with the chairman, president, or a
vice-president, or any other officer thereunto authorized by the board of
directors, certificates for shares of the corporation, the issue of which shall
have been authorized by the board of directors, and any contracts, deeds,
mortgages, bonds, or other instruments which the board of directors has
authorized to be executed, according to the requirements of the form of the
instrument, except when a different mode of execution is expressly prescribed by
the board of directors or these by-laws; (f) have general charge of the stock
transfer books of the corporation; (g) perform all duties incident to the office
of secretary and such other duties as from time to time may be assigned to him
by the chairman, president or by the board of directors.
SECTION 4.9. ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. The
assistant treasurers and assistant secretaries shall perform such duties as
shall be assigned to them by the treasurer or the secretary, respectively, or by
the chairman, president or the board of directors. The assistant secretaries may
sign with the chairman, president. or a vice-president, or any other officer
thereunto authorized by the board of directors, certificates for shares of the
corporation, the issue of which shall have been authorized by the board of
directors, and any contracts, deeds, mortgages, bonds, or other instruments
which the board of directors has authorized, to be executed, according to the
requirements of the form of the instrument, except when a different mode or
execution is expressly prescribed by the board of directors or these by-laws.
The assistant treasurers shall respectively, if required by the board of
directors, give bonds for the faithful discharge of their duties in such sums
and with such sureties as the board of directors shall determine.
<PAGE>
SECTION 4.10. SALARIES. The salaries of the officers shall be fixed
from time to time by the board of directors and no officer shall be prevented
from receiving such salary by reason of the fact that he is also a director of
the corporation.
ARTICLE V
CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 5.1. CONTRACTS. The board of directors may authorize any
officer or officers, agent or agents, to enter into any contract or execute and
deliver any instrument in the name of and on behalf of the corporation, and such
authority may be general or confined to specific instances.
SECTION 5.2. LOANS. No loans shall be contracted on behalf of the
corporation and no evidences of indebtedness shall be issued in its name unless
authorized by a resolution of the board of directors. Such authority may be
general or confined to specific instances.
SECTION 5.3. CHECKS, DRAFTS, ETC. All checks, drafts, or other orders
for the payment of money, notes or other evidences of indebtedness issued in the
name of the corporation, shall be signed by such officer or officers, agent or
agents of the corporation and in such manner as shall from time to time be
determined by resolution of the board of directors.
SECTION 5.4. DEPOSITS. All funds of the corporation not otherwise
employed shall be deposited from time to time to the credit of the corporation
in such banks, trust companies or other depositories as the board of directors
may select.
ARTICLE VI
CERTIFICATES FOR SHARES AND THEIR TRANSFER
SECTION 6.1. CERTIFICATES FOR SHARES. Certificates representing shares
of the corporation shall be signed by the chairman, president or a
vice-president or by such officer as shall be designated by resolution of the
board of directors and by the secretary or an assistant secretary, and may be
sealed with the seal or a facsimile of the seal of the corporation. If both of
the signatures of the officers be by facsimile. the certificate shall be
manually signed by or on behalf of a duly authorized transfer agent or clerk.
Each certificate representing shares shall be consecutively numbered or
otherwise identified, and shall also state the name of the person to whom
issued, the number and class of shares (with designation of series, if any), the
date of issue, that the corporation is organized under Illinois law, and the par
value or a statement that the shares are without par value. If the corporation
is authorized and does issue shares of more than one class or of series within a
class, the certificate shall also contain such information or statement as may
be required by law.
6.1.1 The name and address of each shareholder, the number and
class of shares held and the date on which the certificates for the shares were
issued shall be on the books of the corporation. The person in whose name shares
stand on the books of the corporation shall be deemed
the owner thereof for all purposes as regards the corporation.
<PAGE>
SECTION 6.2. LOST CERTIFICATES. If a certificate representing
shares has allegedly been lost or destroyed the board of directors may in its
discretion, except as may be required by law, direct that a new certificate
be issued upon such indemnification and other reasonable requirements as it
may impose.
SECTION 6.3. TRANSFER OF SHARES. Transfers of shares of the
corporation shall be recorded on the books of the corporation and, except in the
case of a lost or destroyed certificate, on surrender for cancellation of the
certificate for such shares. A certificate presented for transfer must be duly
endorsed and accompanied by proper guaranty of a signature and other appropriate
assurances that the endorsement is effective.
ARTICLE VII
FISCAL YEAR
The fiscal year of the corporation shall be fixed by resolution of the
board of directors.
ARTICLE VIII
DISTRIBUTIONS TO SHAREHOLDERS
SECTION 8.1. The board of directors of a corporation may authorize, and
the corporation may make, distributions to its shareholders, subject to any
restriction in the articles or incorporation and subject also to the limitations
of subsection (c) of this Section.
SECTION 8.2. Unless otherwise provided by the board of directors, the
record date for determining shareholders entitled to a distribution is the date
of the resolution of the board of directors authorizing the distribution.
SECTION 8.3. No distribution may be made if, after giving it effect:
8.3.1 the corporation would be insolvent; or
8.3.2 the net assets of the corporation would be less than
zero or less than the maximum amount payable at the time of distribution to
shareholders having preferential rights in liquidation if the corporation were
then to be liquidated.
SECTION 8.4. The board of directors may base a determination that a
distribution may be made under subsection (c) either on financial statements
prepared on the basis of accounting practices and principles that are reasonable
in the circumstances or on a fair valuation or other method that is reasonable
in the circumstances.
SECTION 8.5. The effect of a distribution under subsection (c) is
measured as of the earlier of:
<PAGE>
8.5.1 the date of its authorization if payment occurs within
120 days after the date of authorization or the date of payment if payment
occurs more than 120 days after the date of authorization; or
8.5.2 in the case of distribution by purchase, redemption, or
other acquisition of the corporation's shares, the earlier of (i) the date money
or other property is transferred or debt incurred by the corporation or (ii) the
date shareholders cease to be shareholders.
ARTICLE IX
SEAL
The corporate seal shall have inscribed thereon the name of the
corporation and the words "Corporate Seal, Illinois". The seal may be used by
causing it or a facsimile thereof to be impressed
or affixed or in any manner reproduced.
ARTICLE X
WAIVER OF NOTICE
Whenever any notice is required to be given under the provisions of
these by-laws or under the provisions of the articles of incorporation or under
the provisions of the Business Corporation Act of the State of Illinois, a
waiver thereof in writing, signed by the person or persons entitled to such
notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice.
ARTICLE XI
AMENDMENTS
Unless the power to make, alter, amend, or repeal the by-laws is
reserved to the shareholders by the articles of incorporation, the by-laws may
be made, altered. amended or repealed by the shareholders or the board of
directors, but no by-law adopted by the shareholders or the board of directors,
but no by-law adopted by the shareholders may be altered, amended or repealed by
the board of directors if the action of the shareholders adopting such by-laws
so states. No provision of these by-laws which grants the shareholders the right
to make, alter, amend or repeal the by-laws may be amended by the board of
directors.
<PAGE>
ARTICLE XII
INDEMNIFICATION OF OFFICERS,
DIRECTORS, EMPLOYEES AND AGENTS
SECTION 12.1. The corporation shall have power to indemnify any person
who has 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 (other than an action by or in the right of the
corporation) by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment or 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 he reasonably
believed to be in or not opposed to the best interest of the corporation, and
with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.
SECTION 12.2. The corporation shall have power to indemnify any person
who was or is a party 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 he 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, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonable incurred by
him in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjusted to be liable for negligence or
misconduct in the performance of his duty to the corporation unless and only to
the extent that the court in which such action or suit was brought shall
determine upon application that despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnify for such expenses which the court shall deem proper.
SECTION 12.3. To the extent that a director, officer, employee or agent
of a corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in sections 1 and 2, or in defense of
any claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
SECTION 12.4. Any indemnification under sections 1 and 2 (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 director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in sections 1 and 2. Such determination
shall
<PAGE>
be made (a) by the board of directors by a majority vote of a quorum consisting
of directors who were not parties to such action, suit or proceeding, or (b)
if such quorum is not obtainable, or, even if obtainable, a quorum of
disinterested directors so directs, by independent legal counsel in a written
opinion, or (c) by the shareholders.
SECTION 12.5. Expenses incurred in defending a civil or criminal
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding, as authorized by the board
of directors in the specific case, upon receipt of any undertaking by or on
behalf of the director, officer, employee or agent to repay such amount, unless
it shall ultimately be determined that he or she is entitled to be indemnified
by the corporation as authorized in this Article.
SECTION 12.6. The indemnification provided by this article shall not be
deemed exclusive of any other rights to which those indemnified may be entitled
under any contract, agreement, vote of shareholders or disinterested directors
or otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office and shall continue as to a person who
has ceased to be a director, officer, employee or agent and shall inure to the
benefit of the heirs, executors and administrators of such a person.
SECTION 12.7. The corporation shall have power to 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, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted against
him and incurred by him in any such capacity, arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under the provisions of this article.
SECTION 12.8. If a corporation has paid indemnity or has advanced
expenses to a director, officer, employee, or agent, the corporation shall
report the indemnification or advance in writing to the shareholders with or
before the notice of the next shareholders meeting.
SECTION 12.9. For purposes of this Article, references to "the
corporation" shall include, in addition to the surviving corporation, any
merging corporation (including any corporation having merged with a merging
corporation) absorbed in a merger which, if its separate existence had
continued, would have had the power and authority to indemnify its directors,
officers, and employees or agents, so that any person who was a director,
officer, employee or agent of such merging corporation, or was serving at the
request of such merging corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
shall stand in the same position under the provisions of this Article with
respect to the surviving corporation as such person would have with respect to
such merging corporation if its separate existence had continued.
SECTION 12.10. For purposes of this Article, references to "other
enterprises" shall include employee benefit plans, references to "fines" shall
include any excise taxes assessed on a person with respect to an employee
benefit plan; and references to "serving at the request of the corporation"
<PAGE>
shall include any service as a director, officer, employee or agent of the
corporation which imposes duties on, or involves services by such director,
officer, employee, or agent with respect to an employee benefit plan, its
participants, or beneficiaries. A person who acted in good faith and in a
manner he or she reasonably believed to be in the best interests of the
participants and beneficiaries of an employee benefit plan shall be deemed to
have acted in a manner "not opposed to the best interest of the corporation"
as referred to in this article.
<PAGE>
(PROFIT DOMESTIC CORPORATION)
ARTICLES OF INCORPORATION
OF
KEIPER U.S.A., INC.
(Name of Corporation)
These Articles of Incorporation are signed by the incorporator(s) for the
purpose of forming a profit corporation pursuant to the provisions of Act 284,
Public Acts of 1972, as follows:
ARTICLE I.
The name of the corporation is KEIPER U.S.A., INC.
ARTICLE II.
The purpose or purposes for which the corporation is organized is to engage in
any activity within the purposes for which corporations may be organized under
the Business Corporation Act of Michigan, including but not limited to that of a
manufacturing, sales and distribution business.
ARTICLE III.
(Use the following if the shares are to consist of one class only.)
The total authorized capital stock is:
(1) Common shares 500 Par Value $1,000.00 per share
(No. of Shares)
OR (2) Common shares without par value.
(No. of Shares)
(3) A statement of all or any of the relative rights, preferences and
limitations of the shares is as follows: All shares of common stock
have equal rights.
ARTICLE IV.
[Intentionally deleted.]
ARTICLE V.
The address of the initial registered office is:
<PAGE>
6735 TELEGRAPH ROAD, SUITE 145, BIRMINGHAM Michigan 48010
- --------------------------------------------- ----------
(No. and Street) (Town or City) (Zip Code)
The mailing address of the initial registered office is (need not be completed
unless different from the above address):
______________________________________________________________________________
(No. and Street) (Town or City) (Zip Code)
The name of the initial resident agent at the registered office is:
ROBERT J. MACHUS
- -------------------------------------------------------------------------------
ARTICLE VI.
The name(s) and address(es) of the incorporator(s) are as follows:
NAME RESIDENCE OR BUSINESS ADDRESS
ROBERT J. MACHUS 6735 TELEGRAPH ROAD, SUITE 145
- -------------------------------------------------------------------------------
BIRMINGHAM, MICHIGAN 48010
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
OPTIONAL (Delete Article VII if not applicable.)
Whenever a compromise or arrangement or any plan of reorganization of this
corporation is proposed between this corporation and its creditors or any class
of them or between this corporation and its shareholders or any class of them,
any court of equity jurisdiction within the state may on the application of this
corporation or of any creditor or any shareholder thereof, or on the application
of any receiver or receivers appointed for this corporation, order a meeting of
the creditors or class of creditors, 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 said 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 reorganization, agree to any
compromise or arrangement or to any reorganization of this corporation as a
consequence of such compromise or arrangement, said compromise or arrangement
and said reorganization shall, if sanctioned by the court to which the said
application has been made, be binding on all the creditors or class of
creditors, or on all the shareholders or class of shareholders and also on this
corporation.
ARTICLE VIII.
(Here insert any desired additional provisions authorized by the Act.)
Pursuant to the Business Corporation Act, as amended, there shall be no board of
directors and all the business of the corporation, including but not limited to
the election of all officers, shall
<PAGE>
be managed by all of the shareholders and this provision shall be noted
conspicuously on the face of every certificate for shares issued by the
corporation. Pursuant to the Business Corporation Act, as amended, any
action required or permitted by said 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 all of the holders of the outstanding stock entitled to
vote thereon. The corporation may not issue or deliver unissued or treasury
shares, option rights, or securities having conversion or option rights,
without first offering them to existing shareholders.
In accordance with the purposes and aims of the Michigan Business Corporation
Act, as amended, the shareholders, officers and other authorized agents of the
corporation shall enjoy the maximum power and flexibility permitted under said
Act and other applicable laws so as to promptly and efficiently accomplish its
corporate purposes and manage its operations and activities as easily and simply
as possible with a minimum of formal meetings and procedures.
IN WITNESS WHEREOF, the undersigned, the incorporator(s) of the above-named
corporation, has (have) hereunto signed these Articles of Incorporation on this
10TH day of MAY , 19 76 .
____________________________________ ____________________________________
/s/ Robert J. Machus
6735 Telegraph Road, Suite 145
Birmingham, Michigan 48010
____________________________________ ____________________________________
<PAGE>
(FOR USE BY DOMESTIC CORPORATIONS)
CERTIFICATE OF AMENDMENT TO THE
ARTICLES OF INCORPORATION
The undersigned corporation executes the following Certificate of Amendment to
its Articles of Incorporation pursuant to the provisions of Section 631, Act
284, Public Acts of 1972, as amended:
1. The name of the corporation is KEIPER U.S.A., INC.
2. The location of the registered office is 6735 TELEGRAPH ROAD, SUITE 145,
(No. and Street)
BIRMINGHAM, Michigan 48010.
(Town or City) (Zip Code)
3. The following amendment to the Articles of Incorporation was adopted on the
5TH day of DECEMBER, 1977. (Check one of the following)
( ) by the shareholders in accordance with Section 611 (2), Act 284,
Public Acts of 1972, as amended. The necessary number of shares as
required by statute were voted in favor of the amendment.
( ) by written consent of the shareholders having not less than the
minimum number of votes required by statute in accordance with Section
407 (1) and (2), Act 284, Public Acts of 1972, as amended. Written
notice to shareholders who have not consented in writing has been
given. (Note: Written consent by less than all of the shareholders
is permitted only if such provision appears in the Articles of
Incorporation.)
(X) by written consent of all the shareholders entitled to vote in
accordance with Section 407 (3), Act 284, Public Acts of 1972, as
amended.
Resolved, that Article III of the Articles of Incorporation be amended to
read as follows: (Any article being amended is required to be set forth in
its entirety.)
ARTICLE III
The total authorized capital stock is:
(1) Common shares 2,000 Par Value $1,000.00 PER SHARE
OR (2) Common shares __________________ without par value.
<PAGE>
(3) A statement of all or any of the relative rights, preferences and
limitations of the shares is as follows: All shares of common stock
have equal rights.
KEIPER U.S.A., INC.
(Corporate Name)
By: /S/ FRED W. BUSCH, PRESIDENT
-------------------------------------------------
(Signature of President, Vice-President, Chairman
or Vice-Chairman)
__________________________________________
(Type or Print Name and Title)
Signed this 1ST day of DECEMBER, 1977.
<PAGE>
(FOR USE BY DOMESTIC CORPORATIONS)
CERTIFICATE OF AMENDMENT TO THE
ARTICLES OF INCORPORATION
The undersigned corporation executes the following Certificate of Amendment to
its Articles of Incorporation pursuant to the provisions of Section 631, Act
284, Public Acts of 1972, as amended:
1. The name of the corporation is KEIPER U.S.A., INC. .
2. The location of the registered office is
1101 SECURITY NATIONAL BANK BUILDING, BATTLE CREEK Michigan 49017.
(No. and Street) (Town or City) (Zip Code)
3. The following amendment to the Articles of Incorporation was adopted on the
1ST day of SEPTEMBER, 1980: (Check one of the following)
( ) by the shareholders in accordance with Section 611 (2), Act 284,
Public Acts of 1972, as amended. The necessary number of shares as
required by statute were voted in favor of the amendment.
( ) by written consent of the shareholders having not less than the
minimum number of votes required by statute in accordance with Section
407 (1) and (2), Act 284, Public Acts of 1972, as amended. Written
notice to shareholders who have not consented in writing has been
given. (Note: Written consent by less than all of the shareholders
is permitted only if such provision appears in the Articles of
Incorporation.)
(X) by written consent of all the shareholders entitled to vote in
accordance with Section 407 (3), Act 284, Public Acts of 1972, as
amended.
Resolved, that Article VIII of the Articles of Incorporation be amended to
read as follows: (Any article being amended is required to be set forth in
its entirety.)
ARTICLE VIII.
Pursuant to the Business Corporation Act, as amended, there shall be no
board of directors and all the business of the corporation, including but
not limited to the election of all officers, shall be managed by all of the
shareholders and this provision shall be noted conspicuously on the face of
every certificate for shares issued by the corporation. Pursuant to the
Business Corporation Act, as amended, any action required or permitted by
said 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 all of
the holders of the outstanding stock entitled to
<PAGE>
vote thereon. The corporation may not issue or deliver unissued or
treasury shares, option rights, or securities having conversion or option
rights, without first offering them to existing shareholders.
In accordance with the purposes and aims of the Michigan Business
Corporation Act, as amended, the shareholders, officers and other
authorized agents of the corporation shall enjoy the maximum power and
flexibility permitted under said Act and other applicable laws so as to
promptly and efficiently accomplish its corporate purposes and manage its
operations and activities as easily and simply as possible with a minimum
of formal meetings and procedures.
Signed this 9TH day of SEPTEMBER, 1980.
KEIPER U.S.A., Inc.
By:
---------------------------------------
(Signature of President, Vice-President,
Chairperson or Vice-Chairperson)
/s/ RAINER THIEME, PRESIDENT
---------------------------------------
(Type or Print Name and Title)
<PAGE>
CERTIFICATE OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
KEIPER RECARO, INC.
Pursuant to the provisions of Act 284, Public Acts of 1972, as amended, the
undersigned corporation executes the following Certificate:
1. NAME. The present name of the corporation is: Keiper Recaro, Inc.
2. CID. The corporation's corporation identification number (CID) is:
064-517.
3. REGISTERED OFFICE. The location of its registered office is: 400
Renaissance Center, 35th Floor, Detroit, Michigan 48243.
4. AMENDMENTS. Article I of the Articles of Incorporation is deleted and
amended to read in its entirety as follows:
"Article I
Name
The name of the corporation is: ATWOOD AUTOMOTIVE, INC."
5. ADOPTION. The foregoing amendment to the Articles of Incorporation
was duly adopted on the 28TH day of March, 1990. The amendment was duly
adopted by the written consent of ALL the shareholders entitled to vote in
accordance with Section 407 of the Act.
Signed this 29TH day of March, 1990
KEIPER RECARO, INC.
By: /s/ Hans Milobinski, President
--------------------------------------
<PAGE>
RESTATED AND AMENDED
BY-LAWS
OF
KEIPER U.S.A., INC.
ARTICLE I. OFFICES
The principal office of the corporation in the State of Michigan shall
be located in the City of Battle Creek, County of Calhoun. The corporation may
have such other offices, either within or without the State of Michigan, as the
Board of Directors may designate or as the business of the corporation may
require from time to time.
ARTICLE II. SHAREHOLDERS
SECTION 1. ANNUAL MEETING. The annual meeting of the shareholders shall
be held during the month of April beginning in the year 1981, at such time and
place as shall be fixed by the shareholder, for the purpose of electing
directors and for the transaction of such other business as may come before the
meeting, unless such action is taken by written consent as provided in Section
11 of Article II. If the day fixed for the annual meeting shall be a legal
holiday in the State of Michigan, such meeting shall be held on the next
succeeding business day.
If the annual meeting is not held on the date designated therefor, the
shareholders shall cause the meeting to be held as soon thereafter as
convenient. If the annual meeting is not held for 90 days after the date
designated therefor, or if no date has been designated for 15 months after
organization of the corporation or after its last annual meeting, the circuit
court for the county in which the registered office of the corporation is
located, upon application of a shareholder, may summarily
<PAGE>
order the meeting or the election, or both, to be held at such time and place,
upon such notice and for the transaction of such business as may be designated
in the order.
SECTION 2. SPECIAL MEETINGS. Special meetings of the shareholders, for
any purpose or purposes may be called by the President or by the Board of
Directors, and shall be called by the President at the request of the holders of
not less than ten percent (10%) of all the outstanding shares of the corporation
entitled to vote at the meeting.
SECTION 3. PLACE OF MEETING. The Board of Directors may designate any
place, either within or without the State of Michigan, as the place of meeting
for any annual meeting or for any special meeting called by the Board of
Directors. A waiver of notice signed by all shareholders entitled to vote at a
meeting may designate any place, either within or without the State of Michigan,
as the place for the holding of such meeting. If no designation is made, or if a
special meeting be otherwise called, the place of meeting shall be the principal
office of the corporation in the State of Michigan.
SECTION 4. NOTICE OF MEETING. Written notice stating the place, day and
hour of the meeting shall be delivered not less than ten (10) nor more than
sixty (60) days before the date of meeting, either personally or by mail, by or
at the direction of the President, or the Secretary, or the officer or persons
calling the meeting, to each shareholder of record entitled to vote at such
meeting. If mailed, such notice shall be deemed to be delivered when deposited
in the United States mail, addressed to the shareholder at his address as it
appears on the stock transfer books of the corporation, with postage thereon
prepaid.
SECTION 5. FIXING OF RECORD DATE. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders or
an adjournment thereof, or shareholders
2
<PAGE>
entitled to receive payment of any dividend, or entitled to receive the
allotment of rights or for the purpose of any other action, the Board of
Directors may fix a date as the record date for such determination of
shareholders, such date to be not less than ten (10) days nor more than sixty
(60) days before the date of the meeting or any other action to be taken.
If a record date is not fixed (a) the record date for determination of
shareholders entitled to notice of or to vote at a meeting of shareholders shall
be the close of business on the day on which notice is given, or, if no notice
is given, the day next preceding the day on which the meeting is held, and (b)
the record date for determining shareholders for any purpose other than that
specified in subdivision (a) shall be the close of business on the day on which
the resolution of the board relating thereto is adopted. When a determination of
shareholders entitled to notice of or to vote at any meeting of shareholders has
been made as provided in this section, such determination shall apply to any
adjournment thereof, unless the board fixes a new record date under this section
for the adjourned meeting. Nothing in this section shall affect the right of a
shareholder and his transferee or transferor as between themselves.
SECTION 6. VOTING LISTS. The officer or agent having charge of the
stock transfer books for shares of the corporation shall make and certify a
complete list of the shareholders entitled to vote at such meeting, or any
adjournment thereof, arranged in alphabetical order, with the address of and the
number of shares held by each, which list, shall be produced at the time and
place of the meeting and shall be subject to inspection by any shareholder
entitled to vote at such meeting during the whole time of the meeting. The list
shall be prima facie evidence as to whom are shareholders entitled to examine
such list or to vote at the meeting.
3
<PAGE>
SECTION 7. QUORUM. A majority of the outstanding shares of the
corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of shareholders. If less than a majority of the
outstanding shares are represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without further notice. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified. The shareholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the with drawal
of enough shareholders to leave less than a quorum.
SECTION 8. PROXIES. At all meetings of shareholders, a shareholder may
vote by proxy executed in writing by the shareholder or by his authorized agent
or representative. Such proxy shall be filed with the Secretary of the
corporation before or at the time of the meeting. No proxy shall be valid after
3 years from its date unless otherwise provided in the proxy.
SECTION 9. VOTING OF SHARES. Each outstanding share of capital stock of
the corporation shall be entitled to one vote upon each matter submitted to a
vote at a meeting of shareholders except as the Articles of Incorporation
otherwise provide.
SECTION 10. VOTING OF SHARES BY CERTAIN HOLDERS
(a) CORPORATIONS
Shares standing in the name of another corporation may be voted by an
officer or agent, or by proxy appointed by an officer or agent or by some other
person who by resolution of the Board of Directors of such corporation or by its
By-Laws shall be appointed to vote such shares.
4
<PAGE>
(b) REPRESENTATIVE OR FIDUCIARY CAPACITY
Shares held by a person in a representative or fiduciary capacity may
be voted by him, either in person or by proxy, without a transfer of such shares
into his name.
(c) PLEDGED STOCK
A shareholder whose shares are pledged shall be entitled to vote such
shares unless in the transfer by the pledgor on the books of the corporation he
shall have expressly empowered the pledgee to vote thereon, in which case only
the pledgee or his proxy may represent said shares and vote thereon.
(d) TREASURY SHARES
Neither treasury shares of its own stock held by the corporation, nor
shares held by another corporation if a majority of the shares entitled to vote
for the election of directors of such other corporation are held by the
corporation, shall be voted at any meeting or counted in determining the total
number of outstanding shares at any given time for purposes of any meeting.
(e) JOINTLY HELD SHARES
Shares held by two or more persons as joint tenants or as tenants in
common may be voted at a meeting of shareholders by any of such persons, unless
another joint tenant or tenant in common seeks to vote any of such shares in
person or by proxy. In the latter event, the written agreement, if any, which
governs the manner in which the shares shall be voted, controls if presented at
the meeting. If no such agreement is presented at the meeting, the majority in
interest of the joint tenants or tenants in common present shall control the
manner of voting. If there is no such majority, the shares, for the purpose of
voting, shall be divided among such joint tenants or tenants in common in
accordance with their interest in the shares.
5
<PAGE>
SECTION 11. INFORMAL ACTION BY SHAREHOLDERS. Any action required or
permitted to be taken at a meeting of the shareholders may be taken without a
meeting if a consent in writing, setting forth the action so taken, shall be
signed by all of the shareholders entitled to vote with respect to the subject
matter thereof.
ARTICLE III. BOARD OF DIRECTORS
SECTION 1. General Powers. The business and affairs of the corporation
shall be managed by its Board of Directors.
SECTION 2. NUMBER, TENURE AND QUALIFICATIONS. The number of directors
of the corporation shall be two. No director need be a shareholder. Each
director shall hold office for the term for which he is elected and until his
successor shall have been elected and qualified or until his resignation or
removal.
SECTION 3. REGULAR MEETINGS. A regular meeting of the Board of
Directors shall be held without other notice than this By-Law immediately after,
and at the same place as the annual meeting, unless such action is taken by
written consent as provided in Section 8 of Article III. The Board of Directors
may provide, by resolution, the time and place, within or without the State of
Michigan, for the holding of additional regular meetings without other notice
than such resolution.
SECTION 4. SPECIAL MEETINGS. Special meetings of the Board of Directors
may be called by or at the request of the President or any two Directors. The
person or persons authorized to call special meetings of the Board of Directors
may fix the place within or without the State of Michigan for holding any
special meeting of the Board of Directors called by them.
SECTION 5. NOTICE. Notice of any special meeting shall be given at
least three days previously thereto by written notice, stating the time and
place of the meeting, delivered personally
6
<PAGE>
or mailed to each director at his business address. If mailed, such notice shall
be deemed to be delivered when deposited in the United States mail so addressed,
with postage thereon prepaid. Any director may waive notice of any meeting by
written statement signed before or after the holding of the meeting. The
attendance of a director at a meeting shall constitute a waiver of notice of
such meeting, except where a director attends a meeting for the express purpose
of objecting to the transaction of any business because the meeting is not
lawfully called or convened.
SECTION 6. QUORUM. A majority of the number of directors then in office
shall constitute a quorum for the transaction of business at any meeting of the
Board of Directors, but if less than such a majority is present at a meeting, a
majority of the directors present may adjourn the meeting from time to time
without further notice. A member of 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 hear each other.
Participation in a meeting pursuant to this subsection constitutes presence in
person at the meeting.
SECTION 7. MANNER OF ACTING. Except as provided in Article XI hereby,
the act of the majority of the directors present at a meeting at which a quorum
is present shall be the act of the Board of Directors.
SECTION 8. ACTION WITHOUT A MEETING. Any action which may be taken at a
meeting of the Board of Directors may be taken without a meeting if, before or
after the action, a consent in writing, setting forth the action so taken, shall
be signed severally or collectively by all of the directors entitled to vote
with respect to the subject matter thereof.
SECTION 9. VACANCIES. Any vacancy occurring in the Board of Directors
may be filled by the affirmative vote of a majority of the remaining directors
though less than a quorum of the Board
7
<PAGE>
of Directors. A director elected to fill a vacancy shall be a director only
until the next election of directors by the shareholders or by reason of an
increase in the number of directors.
SECTION 10. COMPENSATION. By resolution of the Board of Directors, the
Directors may be paid their expenses, if any, of attendance at each meeting of
the Board of Directors, and may be paid a fixed sum for attendance at each
meeting of the Board of Directors or a stated salary as Director. No such
payment shall preclude any director from serving the corporation in any other
capacity and receiving compensation therefor.
SECTION 11. PRESUMPTION OF ASSENT. A director of the corporation who is
present at a meeting of the Board of Directors at which action on any corporate
matter is taken is presumed to have concurred in that action unless his dissent
shall be entered in the minutes of the meeting or unless he shall file his
written dissent to the action with the person acting as the secretary of the
meeting before or promptly after the adjournment thereof. Such right to dissent
shall not apply to a Director who voted in favor of such action. A Director who
is absent from a meeting of the board at which any such action is taken is
presumed to have concurred in the action unless he files his dissent with the
secretary of the corporation within a reasonable time after he has knowledge of
the action.
SECTION 12. DELEGATION OF POWERS TO COMMITTEES. The Board of Directors
may, by resolution passed by a majority of the whole Board, designate one or
more of their number to constitute one or more committees who, to the extent
provided in such resolution, shall have and exercise the authority of the Board
of Directors in the management of the business of the corporation between the
meetings of the Board except as may be prohibited by statute.
8
<PAGE>
ARTICLE IV. OFFICERS
SECTION 1. NUMBER. The officers of the corporation shall be a
President, a Secretary and a Treasurer, each of whom shall be selected by the
Board of Directors. The Board of Directors may select a Chairman of the Board,
one or more Vice Presidents, Assistant Secretaries, and Assistant Treasurers,
and may also appoint such other officers and agents as they may deem necessary
for the transaction of the business of the corporation.
SECTION 2. ELECTION AND TERM OF OFFICE. The officers of the corporation
to be elected by the Board of Directors shall be elected annually by the Board
of Directors at the regular meeting of the Board of Directors held immediately
following each annual meeting of the shareholders. If the election of officers
shall not be held at such meeting, such election shall be held as soon
thereafter as conveniently may be. Each officer shall hold office until his
successor shall have been duly elected and shall have qualified or until his
death or until he shall resign or shall have been removed in the manner
hereinafter provided.
SECTION 3. REMOVAL OR RESIGNATION. Any officer or agent may be removed
by the Board of Directors with or without cause, but such removal shall be
without limitation on the right, if any, of the person so removed to recover
damages for breach of contract. Election or appointment of an officer or agent
shall not of itself create contract rights. 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.
SECTION 4. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled by the Board
of Directors for the unexpired portion of the term.
9
<PAGE>
SECTION 5. PRESIDENT. The President shall be the principal executive
officer of the corporation and, subject to the control of the Board of
Directors, shall in general supervise and control all of the business and
affairs of the corporation. He shall have full power and authority in between
meetings or other actions of the Board of Directors, to supervise, control and
manage the day to day business affairs of the corporation. He shall, when
present, preside at all meetings of the shareholders and of the Board of
Directors. He may sign, with the Secretary or any other proper officer of the
corporation thereunto authorized by the Board of Directors, certificates for
shares of the corporation, any deeds, mortgages, bonds, contracts or other
instruments which the Board of Directors has authorized to be executed, except
in cases where the signing and execution thereof shall be expressly delegated by
the Board of Directors or by these By-Laws to some other officer or agent of the
corporation, or shall be required by law to be otherwise signed or executed; and
in general shall perform all duties incident to the office of President and such
other duties as may be prescribed by the Board of Directors from time to time.
SECTION 6. VICE PRESIDENT. In the absence of the President from the
United States, or in the event of his death, inability or refusal to act, the
Board of Directors may designate a Vice President to perform the duties of the
President, and when so acting, shall have all the powers of and subject to all
the restrictions upon the President. The Vice President may sign, with the
Secretary or Assistant Secretary, certificates for shares of the corporation,
and shall perform such other duties as from time to time may be assigned to him
by the President or by the Board of Directors.
SECTION 7. SECRETARY. The Secretary shall: (a) keep the minutes of
the proceedings of the shareholders' and of the Board of Directors' meetings
in one or more books provided for that purpose; (b) see that all notices are
duly given in accordance with the provisions of these By-Laws
10
<PAGE>
or as required by law; (c) be custodian of the corporate records and of the seal
of the corporation and see that the seal of the corporation is affixed to all
documents the execution of which on behalf of the corporation under its seal is
duly authorized; (d) keep a register of the post office address of each
shareholder, which shall be furnished to the Secretary by such shareholder; (e)
sign with the President, or a Vice President, certificates for shares of the
corporation, the issuance of which shall have been authorized by resolution of
the Board of Directors; (f) have general charge of the stock transfer books of
the corporation; and (g) in general perform all duties incident to the office of
Secretary and such other duties as from time to time may be assigned to him by
the President or by the Board of Directors.
SECTION 8. TREASURER. The Treasurer shall: (a) have charge and custody
of and be responsible for all funds and securities of the corporation; (b)
receive and give receipts for moneys due and payable to the corporation from any
source whatsoever, and deposit all such moneys in the name of the corporation in
such banks, trust companies or other depositaries as shall be selected in
accordance with the provisions of Article V of these By-Laws; and (c) in general
perform all of the duties incident to the office of Treasurer and such other
duties as from time to time may be assigned to him by the President or by the
Board of Directors. If required by the Board of Directors, the Treasurer shall
give a bond for the faithful discharge of his duties in such sum and with such
surety or sureties as the Board of Directors shall determine.
SECTION 9. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. The
assistant secretaries, when authorized by the Board of Directors, may sign with
the President or a Vice President certificates for shares of the corporation,
the issuance of which shall have been authorized by a resolution of the Board of
Directors. The Assistant Treasurers shall, if required by the Board of
Directors, give bonds
11
<PAGE>
for the faithful discharge of their duties in such sums and with such sureties
as the Board of Directors shall determine. The Assistant Secretaries and
Assistant Treasurers, in general, shall perform such duties as shall be assigned
to them by the Secretary or the Treasurer, respectively, or by the President or
the Board of Directors.
SECTION 10. SALARIES. The salaries of the officers shall be fixed from
time to time by the Board of Directors and no officer shall be prevented from
receiving such salary by reason of the fact that he is also a Director of the
corporation.
SECTION 11. FILLING MORE THAN ONE OFFICE. Any two offices of the
corporation may be held by the same person, but no officer shall execute,
acknowledge or verify any instrument in more than one capacity if the instrument
is required by law or the Articles or By-Laws to be executed, acknowledged or
verified by two or more officers.
ARTICLE V. CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 1. CONTRACTS. The Board of Directors may authorize any officer
or officers, agent or agents, to enter into any contract, or execute and deliver
any instrument in the name of and on behalf of the corporation and such
authority may be general or confined to specific instances.
SECTION 2. LOANS. No loans shall be contracted on behalf of the
corporation and no evidence of indebtedness shall be issued in its name unless
authorized by a resolution of the Board of Directors. Such authority may be
general or confined to specific instances.
SECTION 3. CHECKS, DRAFTS, ETC. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued in the
name of the Corporation, shall be signed by such officer or officers, agent or
agents of the corporation and in such manner as shall from time to time be
determined by resolution of the Board of Directors.
12
<PAGE>
SECTION 4. DEPOSITS. All funds of the corporation not otherwise
employed shall be deposited from time to time to the credit of the corporation
in such banks, trusts, companies or other depositaries as the Board of Directors
may select.
ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER
SECTION 1. CERTIFICATES FOR SHARES. Certificates representing shares of
the corporation shall be in such form as shall be determined by the Board of
Directors. Such certificates shall be signed by the President or a Vice
President and by the Secretary or an Assistant Secretary and sealed with the
corporate seal or a facsimile thereof. The signatures of such officers upon a
certificate may be facsimiles if the certificate is manually signed on behalf of
a transfer agent or a registrar, other than the corporation itself or one of its
employees. Each certificate for shares shall be consecutively numbered or
otherwise identified. The name and address of the person to whom the shares
represented thereby are issued, with the number of shares and date of issue,
shall be entered on the stock transfer books of the corporation. All
certificates surrendered to the corporation for transfer shall be cancelled and
no new certificate shall be issued until the former certificate for a new number
of shares shall have been surrendered and cancelled. In case of a lost,
destroyed or mutilated certificate, a new one may be issued therefor upon the
written approval of the existing shareholders of the corporation and upon such
terms and indemnity to the corporation as the Board of Directors may prescribe.
SECTION 2. SHARES CERTIFICATES: REQUIRED PROVISIONS. If there exists
any special designations, relative rights, preferences or limitations, a
certificate representing shares shall set forth on its face or back or state
that the corporation will furnish to a shareholder upon request and without
charge a full statement of such designation, relative rights, preferences and
limitations of the shares
13
<PAGE>
of each class authorized to be issued, and if the corporation is authorized to
issue any class of shares in series, the designation, relative rights,
preferences and limitations of each series so far as the same have been
prescribed and the authority of the Board to designate and prescribe the
relative rights, preferences and limitations of other series.
SECTION 3. TRANSFER OF SHARES. Transfer of shares of the corporation
shall be made only on the stock transfer books of the corporation by the holder
of record thereof or by his legal representative, who shall furnish proper
evidence of authority to transfer, or by his attorney thereunto authorized by
power of attorney duly executed and filed with the Secretary of the corporation,
and on surrender for cancellation of the certificate for such shares. The person
in whose name shares stand on the books of the corporation shall be deemed by
the corporation to be the owner thereof for all purposes.
ARTICLE VII. FISCAL YEAR
The fiscal year of the corporation shall begin on the 1st day of
January and end on the 31st day of December in each year.
ARTICLE VIII. DIVIDENDS
SECTION 1. DECLARATION OF DIVIDENDS. The Board of Directors may, from
time to time, declare and the corporation may pay dividends on its outstanding
shares in the manner and upon the terms and conditions provided by law and its
Articles of Incorporation.
ARTICLE IX. SEAL
The Board of Directors shall provide a corporate seal which shall be
circular in form and shall have inscribed thereon the name of the corporation,
its designation as a Michigan corporation, and the word, "Seal."
14
<PAGE>
ARTICLE X. WAIVER OF NOTICE
Whenever any notice is required to be given to any incorporator,
shareholder or Director of the corporation under the provisions of these By-Laws
or under the provisions of the Articles of Incorporation, or under the
provisions of the Michigan Business Corporation Act, a waiver thereof in writing
signed by the person or persons entitled to such notice whether before or after
the holding of the meeting shall be deemed equivalent to the giving of such
notice.
ARTICLE XI. AMENDMENTS
These By-Laws may be altered, amended or repealed and new By-Laws may
be adopted only by the shareholders at any annual or special meeting.
ARTICLE XII. INDEMNIFICATION OF DIRECTORS AND OFFICERS
SECTION 1. Each director and officer of the Corporation and any person
serving at its request as director or officer of another corporation in which it
owns shares of capital stock or of which it is a creditor shall be indemnified
by the corporation against all expenses which may be reasonably incurred or paid
by him in connection with any claim, or actual or threatened action, suit or
proceeding (civil, criminal or other, including appeals) in which he may be
involved by reason of his being or having been such director or officer or by
reason of any action or omission or alleged action or omission by him in any
such capacity and against any amount or amounts which may be paid by him (other
than to the corporation) in reasonable settlement of any claim, action, suit or
proceeding where it is in the interest of the corporation that such settlement
be made. As used herein, the term "expenses" shall include, without limitation,
attorneys' fees, costs, judgments, fines, penalties and other liabilities.
15
<PAGE>
SECTION 2. In cases where such action, suit or proceeding shall proceed
to final adjudication, such indemnification shall not extend to matters as to
which it shall be adjudged therein that such director or officer is liable for
negligence or misconduct in the performance of his duties to the corporation.
Neither a judgment of conviction or the entry of any plea in a criminal case
shall of itself be deemed an adjudication that such director or officer was
liable for negligence or misconduct in the performance of his duties if he acted
in good faith, for a purpose which he reasonably believed to be in the best
interests of the corporation and had no reasonable cause to believe that his
conduct was unlawful.
SECTION 3. The determination whether a settlement was reasonable and in
the best interest of the corporation or whether such director or officer acted
in good faith, for a purpose which he reasonably believed to be in the best
interests of the corporation and had no reasonable cause to believe that his
conduct was unlawful shall be made by a majority of a quorum of the Board of
Directors comprised of those directors who are not involved in the claim,
action, suit or proceeding and if there be no such quorum, by one or more
disinterested persons to whom the question may be referred by the Board of
Directors.
SECTION 4. Each employee, and each retired employee who is or has been
a party to a written agreement under which he might be, or might have been,
obligated to render services to the corporation, shall be indemnified in the
same manner and to the same extent as provided above for a director or officer
in connection with any claim, or actual or threatened action, suit or proceeding
(civil, criminal or other, including appeals) in which he may be involved by
reason of his being or having been such employee or a party to any such written
agreement or by reason of any action or omission or alleged action or omission
by him in any such capacity.
16
<PAGE>
SECTION 5. The rights of indemnification herein provided for shall be
severable, shall not be exclusive of other rights to which any director,
officer, employee or retired employee may now or hereafter be entitled, shall
continue as to a person who has ceased to be such director, officer, employee or
retired employee and shall inure to the benefit of the heirs, executors and
administrators of such a person.
17
<PAGE>
ARTICLES OF INCORPORATION
(PROFIT CORPORATION)
These Articles of Incorporation are signed and acknowledged by the incorporators
for the purpose of forming a corporation for profit under the provisions of Act
No. 327 of the Public Acts of 1931, as amended, as follows:
ARTICLE I.
The name of the corporation is MARK I MOLDED PLASTICS, INC.
ARTICLE II.
The purpose or purposes for which the corporation is formed are as follows:
(a). To engage in the business of purchasing, manufacturing, compounding,
refining, distributing, selling, importing, exporting, exploiting, using, and to
manufacture, compound, refine, distill, treat, prepare, analyze, synthesize,
produce and in every way deal in and with condensation and reaction products
yielding solids, pastes or solutions, resinous or otherwise, suitable as a basis
for plastics, coating and/or impregnating molding, injecting, compressing,
extruding compositions, cements, and the like, including processes of making
said condensation and reaction products, and including plastics, coating
compositions, cements, and the like containing said condensation and reaction
products as an essential and/or influential component and processes of making
same; including the manufacturing of articles and products from said
condensation and reaction products including without limitation thereof the
manufacturing by post forming, stamping, fabricating, laminating, transfer
molding, injection, compression, molding compositions made from said
condensation and reaction products; also lacquers and coating compositions or
adhesives made from said condensation and reaction products, also including the
processing and manufacturing of articles made from such molding compositions,
and to utilize plastics and plastic materials in any of the aforementioned
manners in conjunction with any other material or materials, and to manufacture,
process and otherwise work with, acquire, and dispose of products and/or
personal property of every class and description.
(b). To purchase, acquire, hold mortgage, pledge, hypothecate, loan money upon,
exchange, sell, assign, transfer, and otherwise deal in personal property and
real property of every kind, character, and description whatsoever and
wheresoever situated, and any interest therein.
(c). To apply for, obtain, purchase, take licenses in respect of or
otherwise acquire, and to hold, own, use, grant licenses in respect of,
manufacture under, sell, assign, mortgage, pledge or otherwise dispose of;
any and all inventions, devices, processes and any improvements and
modifications thereof; and any and all letters patent of the United States or
of any other country, state, territory, or locality, and all rights connected
therewith or appertaining thereunto; any and all copyrights granted by the
United States or any other country, state, territory, or locality; and any
and all trade-marks, trade-names, trade symbols and other indications of
origin and
<PAGE>
ownership granted by or recognized under the laws of the United States or of
any other country, state, territory or locality.
(d). To acquire all or any part of the goodwill, rights, property and business
of any corporation, association, partnership, firm, trustee, syndicate,
combination, organization, other entity, or individual, domestic or foreign,
heretofore or hereafter engaged in any business, similar to the business of the
corporation or otherwise, and to pay for the same in cash or in shares of
obligations of the corporation or otherwise, and to hold, utilize, enjoy and in
any manner dispose of the whole or any part of the rights and property so
acquired, and to assume in connection therewith any liabilities of any such
corporation, association, partnership, firm, trustee, syndicate, combination,
organization, individual or other entity, domestic or foreign, and to conduct in
the State of Michigan and/or in any other state, territory, locality or country
the whole or any part of the business thus acquired, provided such business is
not prohibited by the laws of the State of Michigan.
Each purpose specified in any clause of paragraph contained in this Article II
shall be deemed to be independent of all other purposes herein specified and
shall not be limited or restricted by reference to or inference from the terms
of any other clause or paragraph of these Articles of Incorporation.
In general to carry on any business in connection therewith and incident thereto
not forbidden by the laws of the State of Michigan and with all the powers
conferred upon corporations by the laws of the State of Michigan.
ARTICLE III.
Location of the first registered office is:
410 SOUTH JACKSON STREET JACKSON JACKSON Michigan 49201
(No.) (Street) (City) (County) (Zip Code)
Post office address of the first registered office is:
410 SOUTH JACKSON STREET JACKSON Michigan 49201
(No. and Street or P.O. Box) (City) (Zip Code)
ARTICLE IV.
The name of the first resident agent is L.R. HOUMAN
ARTICLE V.
The total authorized capital stock is
<PAGE>
{Preferred shs. _______________} {Par Value $________________}
(1) per share
{Common shs. 5,000 } {Par Value $ 10.00 }
{Book Value $______________}
per share
{Preferred __________________} {Price fixed for sale $_________}
and/or shs. of (2) no par value
{Common _____________________} {Book Value $______________}
per share
{Price fixed for sale $_________}
(3) A statement of all or any of the designations and the powers, preferences
and rights, and the qualifications, limitations or restrictions thereof is as
follows:
ARTICLE VI.
The names and places of residence or business of each of the incorporators and
the number and class of shares subscribed for by each are as follows: (Statute
requires one or more incorporators)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Name Residence or Business Address NUMBER OF SHARES
(No.) (Street) (City) (State) PAR STOCK NON-PAR STOCK
COMMON PREFERRED COMMON
- --------------------------------------------------------------------------------
<S> <C> <C>
PREFERRED
JACQUELINE RUMSEY ROUTE #3, HILLSDALE, MICHIGAN 363
DELL MAXSON ROUTE #2, PITTSFORD, MICHIGAN 187
JOSEPH FEIER LIVINGSTON, NJ 350
DUANE SELL BOX 108, BRYON, OHIO 1,500
HUBERT B. CLUNE BOX 390, BRYON, OHIO 1,500
CHARLES JAMESON 428 N.MAIN, ADRIAN, MICHIGAN 350
- --------------------------------------------------------------------------------
</TABLE>
ARTICLE VII.
The names and addresses of the first board of directors are as follows:
(Statute requires at least three directors)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
Name Residence or Business Address
(No.) (Street) (City) (State)
- ------------------------------------------------------------------------------
<S> <C>
JACQUELINE RUMSEY 245 ASHTEWETTE BEACH, ROUTE #3, HILLSDALE, MICHIGAN
DELL MAXSON ROUTE #2, PITTSFORD, MICHIGAN
JOSEPH FEIER LIVINGSTON, NJ
DUANE SELL BOX 108, BRYON, OHIO
HUBERT B. CLUNE BOX 390, BRYON, OHIO
CHARLES JAMESON 428 N. MAIN STREET, ADRIAN, MICHIGAN
- ------------------------------------------------------------------------------
</TABLE>
ARTICLE VIII.
The term of the corporate existence is perpetual.
<PAGE>
(If term is for a limited number of years, then state the number of years
instead of perpetual.)
ARTICLE IX.
OPTIONAL. (Please delete Article IX if not applicable.)
Whenever a compromise or arrangement or any plan of reorganization of this
corporation is proposed between this corporation and its creditors or any class
of them or between this corporation and its shareholders or any class of them,
any court of equity jurisdiction within the state may on the application of this
corporation or of any creditor or any shareholder thereof, or on the application
of any receiver or receivers appointed for this corporation, order a meeting of
the creditors or class of creditors, 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 said 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 reorganization, agree to any
compromise or arrangement or to any reorganization of this corporation as a
consequence of such compromise or arrangement, said compromise or arrangement
and said reorganization shall, if sanctioned by the court to which the said
application has been made, be binding on all the creditors or class of
creditors, or on all the shareholders or class of shareholders and also on this
corporation.
ARTICLE X.
(Here insert any desired additional provisions authorized by the Act.)
We, the incorporators, sign our names this 31ST day of JULY, 1968.
______________________________________________________________________________
/s/ Jacqueline Rumsey /s/ Dell Maxson
______________________________________________________________________________
/s/ Joseph Feier /s/ Duane Sell
______________________________________________________________________________
/s/ Hubert B. Clune /s/ Charles Jameson
______________________________________________________________________________
______________________________________________________________________________
<PAGE>
STATE OF MICHIGAN ) (One or more of the parties signing must
acknowledge before the Notary)
) SS
COUNTY OF JACKSON )
On this 31ST day of JULY, 1968, before me personally appeared JACQUELINE
RUMSEY, JOSEPH FEIER, HUBERT B. CLUNE, DELL MAXSON, DUANE SELL AND CHARLES
JAMESON to me known to be the persons described in and who executed the
foregoing instrument, and acknowledged that they executed the same as their
free act and deed.
-------------------------------------------
(Signature of Notary)
/S/ L.R. HELMAN
-------------------------------------------
(Print or type name of Notary)
Notary Public for JACKSON County,
State of Michigan
My commission expires JULY 15, 1969
(Notarial seal required if acknowledgment taken
out of State)
<PAGE>
CERTIFICATE OF AMENDMENT TO THE
ARTICLES OF INCORPORATION
MARK I MOLDED PLASTICS, INC.
(Corporate Name)
a Michigan corporation, whose registered office is located at
410 SOUTH JACKSON STREET JACKSON JACKSON Michigan 49201
(No.) (Street) (City) (County) (Zip Code)
certifies pursuant to the provisions of Section 43 of Act No. 327 of the
Public Acts of 1931, as amended, that at a meeting of the SHAREHOLDERS
(Shareholders or members)
of said corporation called for the purpose of amending the articles of
incorporation, and held on the 3RD day of NOVEMBER, 1969, it was resolved
by the vote of
(the holders of two-thirds of the shares) of each class entitled to vote and
by
(two-thirds of the shares) of each class whose rights, privileges or preferences
are changed, that
Article No. V of the Articles of Incorporation is amended to read as
follows. viz.:
ARTICLE V
(Any article being amended is required to be set forth in its entirety.)
The total authorized capital stock is
(1) Common Shares, Class "A", 50,000 . . . . . . . .Par Value $1.00 per share
Common Shares, Class "B", 20,000. . . . . . . . .Par Value $1.00 per share
(2) A statement of all or any of the designations and the powers, preferences
and rights, and the qualifications, limitations or restrictions thereof is as
follows:
Class "A" stock shall be subject to the following restriction:
No stockholder, his executor, administrator, or other legal representative
shall sell, assign, transfer or otherwise dispose of any share or shares of
the stock of this corporation unless said share or shares of stock shall
have been offered for sale to the other stockholder or stockholders at a
price per share as established by the stockholders at their last annual
meeting; and the other stockholder or stockholders shall have the right to
purchase the same by the payment of such book value at any time within
thirty (30) days after receipt of written notice of said offer. If there
is more than one other stockholder, such offer shall be to sell to each of
them the same proportion of the shares offered as the number of shares held
by him bears to the total number of shares held by all stockholders to whom
<PAGE>
the offer is made. In the event that the other stockholder or stockholders
do not within thirty (30) days after receipt of the notice of said offer,
accept same, the share or shares shall next be offered for sale to the
corporation at a price per share as established by the stockholders at
their last annual meeting, and the corporation shall have the right to
purchase the same with any funds legally available for the purpose, by the
payment of such amount at any time within thirty (30) days after receipt of
written notice of said offer. In the event of any dispute, the matter
shall be referred to the American Arbitration Association for binding
arbitration. In the event of the failure or refusal of the stockholder or
stockholders and the corporation to purchase the shares in the manner set
forth above, then, in that event, the stockholder shall be free and have
the unrestricted right to dispose of his shares in any manner available to
him. Notwithstanding the foregoing, the shares of Hubert B. Clune and/or
Duane Sell shall be first offered to the other, upon the same terms as set
forth above, and upon the expiration of the thirty (30) day offering
period, any of such shares not purchased by the offeree shall be then
offered to the remaining shareholder and then, in turn, to the corporation,
and then to third parties in the same manner and upon the same terms as set
forth above.
Class "B" stock shall be subject to the following restriction:
Class "B" stock shall be issued only to employees of Mark I Molded
Plastics, Inc., and in the event of the termination of employment of said
employee stockholder, for any reason whatsoever, on or before five (5)
years from date of issuance, the shares must be resold to the Company by
the stockholder, and the Company must repurchase said shares at the price
per share established by the stockholders at their last annual meeting,
with said price to be no less than that paid by the employee stockholder,
and, in the event of said shareholder employee's failure to so do, then, in
that event, the Secretary of the Company shall cancel said certificate and
the shares represented thereby upon the books and records of the Company,
and shall forward to said shareholder employee, at his last known address,
payment therefore, computed as set forth above. After the expiration of
the said five (5) year period, said shares shall bear the same restriction
as that of Class "A" stock, as follows:
No stockholder, his executor, administrator, or other legal representative
shall sell, assign, transfer or otherwise dispose of any share or shares of
the stock of this corporation unless said share or shares of stock shall
have been offered for sale to the other stockholder or stockholders at a
price representing the price per share as established by the stockholders
at their last annual meeting; and the other stockholder or stockholders
shall have the right to purchase the same by the payment of such book value
at any time within thirty (30) days after written notice of said offer. If
there is more than one other stockholder, such offer shall be to sell to
each of them the same proportion of the shares offered as the number of
shares held by him bears to the total number of shares by all stockholders
to whom the offer is made. In the event that the other stockholder or
stockholders do not within thirty (30) days after receipt of the notice of
said offer, accept same, the share or shares shall next be offered for sale
to the corporation at a price per share as established by the stockholders
at their last annual meeting, and the corporation shall have the right to
<PAGE>
purchase the same with any funds legally available for the purpose, by the
payment of such amount at any time within thirty (30) days after receipt of
written notice of said offer. In the event of any dispute, the matter
shall be referred to the American Arbitration Association for binding
arbitration. In event of the failure or refusal of the stockholder or
stockholders and the corporation to purchase the shares in the manner set
forth above, then, in that event, the stockholder shall be free and have
the unrestricted right to dispose of his shares in any manner available to
him. Notwithstanding the foregoing, the shares of Hubert B. Clune and/or
Duane Sell shall be first offered to the other, upon the same terms as set
forth above, and upon the expiration of the thirty (30) day offering
period, any of such shares not purchased by the offeree shall be then
offered to the remaining shareholder and then, in turn, to the corporation,
and then to third parties in the same manner and upon the same terms as set
forth above. Class "B" shareholders shall possess no preemptive rights.
NOTE: Sec. 43, amended by Act 155, P.A. 1953, provides:
Signed on APRIL 16, 1970.
Affix Corporate Seal Here MARK I. MOLDED PLASTICS, INC.
(Corporate Name)
By: /s/ HUBERT B. CLUNE
-----------------------------------------
(President or Vice-President)
/s/ JACQUELINE RUMSEY
-----------------------------------------
(Secretary or Assistant Secretary)
STATE OF MICHIGAN )
) SS
COUNTY OF JACKSON )
On this 16TH day of APRIL, 1970, before me appeared
HUBERT B. CLUNE AND JACQUELINE RUMSEY to me personally known, who,
(Name of President or Vice-President)
being by me duly sworn, did say that he is the president of
MARK I MOLDED PLASTICS, INC. which executed the foregoing instrument, and that
(Corporate Name)
*[the seal affixed to said instrument is the corporate seal of said corporation,
and that] said instrument was signed *[and sealed] in behalf of said corporation
by authority of its board of directors, and said officer acknowledged said
instrument to be the free act and deed of said corporation.
* If corporation has no seal strike out the words in brackets and add at end of
acknowledgment the following: "and that said corporation has no corporate
seal."
/s/ BEVERLY R. BULEMBA
------------------------------------
(Signature of Notary)
Notary Public for JACKSON County, State
of Michigan
<PAGE>
My Commission expires June 30, 1973
(Notarial seal required if
acknowledgment taken out of State)
<PAGE>
(For Use by Domestic Corporations)
CERTIFICATE OF AMENDMENT TO THE
ARTICLES OF INCORPORATION OF
MARK I MOLDED PLASTICS, INC.
(Name of Corporation)
The undersigned corporation executes the following Certificate of Amendment to
its Articles of Incorporation pursuant to the provisions of Section 631, Public
Acts of 1972:
1. The name of the corporation is MARK I MOLDED PLASTICS, INC.
The location of the registered office is
410 SOUTH JACKSON STREET JACKSON Michigan 49201.
(No. and Street) (Town or city) (Zip Code)
2. The following amendment to the Articles of Incorporation was adopted by the
shareholders of the corporation in accordance with Subsection (2) of
Section 611, Act 284, Public Acts of 1972, on the 10TH day of APRIL, 1973.
Resolved, that Article V of the Articles of Incorporation be amended to read
as follows: (Any article being amended is required to be set forth in its
entirety.)
The total authorized capital stock is:
(1) Common Shares, Class "A", 50,000 . . . . . .Par Value $1.00 per share
Common Shares, Class "B", 20,000 . . . . . .Par Value $1.00 per share
(2) A statement of all or any of the designations and the powers,
preferences and rights, and the qualifications, limitations or
restrictions thereof is as follows:
Class "A" stock shall be subject to the following restriction: NONE
Class "B" stock shall be subject to the following restriction:
Class "B" stock shall be issued only to employees of Mark I Molded
Plastics, Inc., and, in the event of the termination of employment of
said employee stockholder, for any reason whatsoever, on or before
five (5) years from date of issuance, the shares must be resold to the
Company by the stockholder, and the Company must repurchase said
shares at the price per share established by the stockholders at their
last annual meeting, with said price to be no less than that paid by
the employee stockholder, and, in the event of said shareholder
employee's failure to so do, then, in that event, the Secretary of the
company shall cancel said certificate and the shares represented
thereby upon the books and records of the Company and shall forward to
said shareholder employee, at his last known address, payment
therefore computed as set forth above. After the expiration of the
said five (5) year period, said shares shall bear the same restriction
as that of Class "A" stock, as follows: NONE.
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3. The necessary number of shares as required by statute were voted in favor
of the amendment.
Dated this 10TH day of APRIL, 1973.
MARK I MOLDED PLASTICS, INC.
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(Corporate Name)
By: /s/ DUANE SELL
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(Signature)
Vice President and Treas.
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(Type or Print Name and Title)
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BY-LAWS
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ARTICLE I
SHARES OF STOCK
SEC. 1. CAPITAL STOCK. The Capital of this Corporation shall be divided
into -------5,000-------non-assessable shares of common stock, par value $10
per share.
SEC. 2. CERTIFICATE OF SHARES. The Certificates for shares of the
Capital Stock of this Company shall be in such form, not inconsistent with
the Articles of Incorporation of the Company, as shall be prepared or be
approved by the Board of Directors. The Certificates shall be signed by the
President or Vice-President, and also by the Secretary.
SEC. 3. TRANSFER OF SHARES. Shares of the Capital Stock of the Company
shall be transferred by endorsement of the certificates representing said
shares by the registered holder thereof or his attorney, and its surrender to
the Secretary for cancellation. Whereupon the Secretary shall issue to the
transferee or transferees, as specified by the endorsement upon the
surrendered certificate, new certificates for a like number of shares.
Transfers shall be made only upon the books of the Company and upon said
surrender and cancellation; and shall entitle the transferee to all the
privileges, rights and interests of a shareholder of this Company, subject,
however, to such restrictions as may be endorsed upon the certificate.
SEC. 4. CLOSING OF TRANSFER BOOKS. The stock books shall be closed for
the meeting of the shareholders, and for the payment of dividends during such
period, not exceeding forty days, as, from time to time, may be determined by
the Board of Directors, and during such period no stock shall be transferred
upon said books.
SEC. 5. LIEN. The Corporation shall have a lien upon all stock or
property of its members invested therein, for all debts due to it by the
owners thereof.
SEC. 6. LOST CERTIFICATES. In case of the loss of any certificate of
shares of stock, upon due proof by the registered holder or his
representatives, by affidavit of such loss, the Secretary shall issue a
duplicate certificate in its place, upon the corporation being fully
indemnified therefor.
SEC. 7. DIVIDENDS. The Board of Directors, in its discretion, from
time to time, may declare dividends upon the Capital Stock from the surplus
and net profits of the Company.
SEC. 8. FISCAL YEAR. The fiscal year of the Company shall end on the
30th day of September in each year.
SEC. 9. CORPORATE SEAL. The Board of Directors shall provide a
suitable corporate seal, which seal shall be in charge of the Secretary, and
shall be used by him.
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BY-LAWS (Continued)
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ARTICLE II
SHAREHOLDERS' MEETING.
SEC. 1. TIME, PLACE AND PURPOSE. Meetings of the shareholders of the
Company shall be held annually at the registered office of the Company in
Jonesville, Michigan at 7:00 o'clock P.M., on the third Wednesday of each
year (after the year 1968), not a legal holiday, and if a legal holiday, then
on the day following, for the purpose of electing directors, and for the
transaction of such other business and may be brought before the meeting.
SEC. 2. SPECIAL MEETINGS. Special meetings of the Shareholders may be
called by the President and Secretary, and shall be called by either of them
at the request in writing or by note of a majority of the Board of Directors,
or at the request in writing by shareholders of record owning a majority in
amount of the entire Capital Stock of the Company issued and outstanding.
SEC. 3. NOTICE. Written notice of any shareholders' meeting shall be
mailed to each shareholder at his last known address, as the same appears on
the stock book of the Company, or otherwise, at least ten days prior to any
meeting and any notice of special meeting shall indicate briefly the object
or objects thereof. Nevertheless, if all the shareholders waive notice of the
meeting, no notice of the same shall be required, and whenever all the
shareholders shall meet in person or by proxy, such meeting shall be valid
for all purposes, without call or notice, and at such meeting any corporate
action shall not be invalid for want of notice.
SEC. 4. QUORUM. At any meeting of the shareholders, the holders of a
majority of all the voting shares of the capital stock of the Company issued
and outstanding, present in person or represented by proxy, shall constitute a
quorum. Meetings at which less than a quorum is represented may, however, be
adjourned from time to time to a further date by those who attend, without
further notice other than the announcement of such meeting, and when a quorum
shall be present upon any such adjourned day, any business may be transacted
which might have been transacted at the meeting as originally called.
SEC. 5. VOTING. Each shareholder shall be entitled to one vote for each
share of voting stock standing registered in his or her name on the books of
the Company, in person or by proxy duly appointed in writing and filed with
the Secretary of the meeting, on all questions and elections. No proxy shall
be voted after three years from its date unless said proxy provides for a
longer period.
SEC. 6. ORGANIZATION. The President shall call meetings of the
shareholders to order and shall act as Chairman of such meetings, unless
otherwise determined by the holders of a majority of all the shares of the
capital stock issued and outstanding, present in person or by proxy. The
Secretary of the Company shall act as Secretary of all meetings of the
Company, but in the absence of the Secretary at any meeting of the
shareholders or his inability to act as Secretary, the presiding officer
may appoint any person to act as Secretary of the meeting.
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BY-LAWS (Continued)
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SEC. 7. INSPECTORS. Whenever any shareholder present at a meeting of
shareholders shall request the appointment of inspectors, a majority of the
shareholders present at such meeting and entitled to vote thereat, shall
appoint inspectors who need not be shareholders. If the right of any person
to vote at such meeting shall be challenged, the inspectors of election shall
determine such right. The inspectors shall receive and count the votes either
upon an election or for the decision of any question and shall determine the
result. Their certificate of any vote shall be prima facie evidence thereof.
SEC. 8. GIVING NOTICE. Any notice required by statute or by these
By-Laws to be given to the Shareholders, or to directors, or to any officer
of the Company, shall be deemed to be sufficient to be given by depositing the
same in a post office box, in a sealed, postpaid wrapper, addressed to such
shareholder, director, or officer at his last known address, and such notice
shall be deemed to have been given at the time of such mailing.
SEC. 9. NEW SHAREHOLDERS. Every person becoming a shareholder in this
Company shall be deemed to assent to these By-Laws, and shall designate to
the Secretary the address to which he desires that the notice herein required
to be given may be sent, and all notices mailed to such addresses, with
postage prepaid, shall be considered as duly given at the date of mailing,
and any person failing to so designate his address shall be deemed to have
waived notice of such meeting.
ARTICLE III
DIRECTORS
SEC. 1. NUMBER, CLASSIFICATION AND TERM OF OFFICE. The business and the
property of the Company shall be managed and controlled by the Board of
Directors.
The number of Directors shall be two, but the number may be changed from
time to time by the alteration of these by-laws. The first Board of Directors
of this Corporation, named in the Articles of Incorporation, shall hold
office until the first annual meeting to be held on the ____________ day of
_____________ and thereafter on the second __________ in _________ in each
year, beginning in _____. Directors shall hold office for the term of one
year, and/or until their successors are elected and qualified.
SEC. 2. PLACE OF MEETING. The Directors may hold their meetings in such
place or places within or without this State as a majority of the Board of
Directors may, from time to time determine.
SEC. 3. MEETINGS. Meetings of the Board of Directors may be called at
any time by the President or Secretary, or by a majority of the Board of
Directors. Directors shall be notified in writing of the time, place and
purpose of all meetings of the Board, except the regular annual meeting held
immediately after the annual meeting of shareholders, at least three days
prior thereto. Any Director shall, however, be deemed to have waived such
notice by his attendance at any meeting.
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BY-LAWS (Continued)
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SEC. 4. QUORUM. A majority of the Board of Directors shall constitute a
quorum for the transaction of business, and if at any meeting of the Board of
Directors there be less than a quorum present, a majority of those present
may adjourn the meeting from time to time.
SEC. 5. VACANCIES. Vacancies in the Board of Directors shall be filled
by the remaining members of the Board and each person so elected shall be a
director until his successor is elected by the shareholders, who may make
such election at the next annual meeting of the stockholders or at any
special meeting duly called for that purpose.
SEC. 6. COMPENSATION. No Director shall receive any salary or
compensation for his services as Director, unless otherwise especially
ordered by the Board of Directors or by By-Law.
ARTICLE IV
OFFICERS
SEC. 1. The Board of Directors shall select a President, a Secretary
and a Treasurer and may select one or more Vice-Presidents, Assistant
Secretaries and Assistant Treasurers, who shall be elected by the Board of
Directors at their regular annual meeting held immediately after the
adjournment of the regular annual stockholders meeting. The term of office
shall be for one year and until their successors are chosen. No one of such
officers, except the President, need be a director, but a Vice-President who
is not a director, cannot succeed to or fill the office of President. Any
two of the above offices, except those of President and Vice-President, may
be held by the same person, but no officer shall execute, acknowledge, or
verify any instrument in more than one capacity. The Board of Directors may
fix the salaries of the officers of the Company.
SEC. 2. The Board of Directors may also appoint such other officers and
agents as they may deem necessary for the transaction of the business of the
Corporation. All officers and agents shall respectively have such authority
and perform such duties in the management of the property and affairs of the
Corporation as may be designated by the Board of Directors. Without
limitation of any right of an officer or agent to recover damages for breach
of contract, the Board of Directors may remove any of officer or agent
whenever, in their judgment, the business interests of the Corporation will
be served thereby.
SEC. 3. The Board of Directors may secure the fidelity of any or all of
such officers by bond or otherwise.
ARTICLE V
DUTIES OF OFFICERS
SEC. 1. PRESIDENT. The President shall be the chief executive officer
of the Company, and in the recess of the Board of Directors shall have the
general control and management of its business and affairs, subject, however,
to the right of the Board of Directors to delegate any specific power except
such as may be by statute
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BY-LAWS (Continued)
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exclusively conferred upon the President, to any other officer or officers of
the Company. He shall preside at all meetings of the Directors and all
meetings of the shareholders, unless otherwise determined by a majority of
all the shares of the capital stock issued and outstanding, present in person
or by proxy.
SEC. 2. VICE-PRESIDENT. In case the office of President shall become
vacant by death, resignation, or otherwise, or in case of the absence of the
President, or his disability to discharge the duties of his office, such
duties shall, for the time being, devolve upon the Vice-President who shall
do and perform such other acts as the Board of Directors may, from time to
time, authorize him to do, but a Vice-President who is not a director cannot
succeed to or fill the office of President.
SEC. 3. TREASURER. The Treasurer shall have custody and keep account
of all money, funds and property of the Company, unless otherwise determined
by the Board of Directors, and he shall render such accounts and present such
statement to the Directors and President as may be required of him. He shall
deposit all funds of the Company which may come into his hands in such bank
or banks as the Board of Directors may designate. He shall keep his bank
accounts in the name of the Company, and shall exhibit his books and
accounts, at all reasonable times, to any Director of the Company upon
application at the office of the Company during business hours. He shall pay
out money as the business may require upon the order of the properly
constituted officer or officers of the Company, taking proper vouchers
therefor; provided, however, that the Board of Directors shall have power by
resolution to delegate any of the duties of the Treasurer to other officers,
and to provide by what officers, if any, all bills, notes, checks, vouchers,
orders or other instruments shall be countersigned. He shall perform, in
addition, such other duties as may be delegated to him by the Board of
Directors.
SEC. 4. SECRETARY. The Secretary of the Company shall keep the minutes
of all the meetings of the shareholders and Board of Directors in books
provided for that purpose; he shall attend to the giving and receiving of all
notices of the Company; he shall sign, with the President or Vice-President,
in the name of the Company, all contracts authorized by the Board of
Directors, and when necessary shall affix the corporate seal of the Company
thereto; he shall have charge of the certificate books, transfer books and
stock ledgers and such other books and papers as the Board of Directors may
direct; all of which, shall, at all reasonable times, be open to the
examination of any Director upon application at the office of Secretary, and
in addition such other duties as may be delegated to him by the Board of
Directors.
ARTICLE VI
AMENDMENTS
SEC. 1. The shareholders or the Board of Directors may alter, amend, add
to or repeal these By-Laws, including the fixing and altering of the Board of
Directors; provided that the Board of Directors shall not make or alter any
By-Laws fixing their qualifications, classifications, or term of office.
<PAGE>
CHARTER
OF
MARK I MOLDED PLASTICS OF TENNESSEE, INC.
The undersigned natural person, having capacity to contract and acting
as the incorporator of a corporation under the Tennessee General Corporation
Act, adopts the following Charter for
such corporation:
1. The name of the corporation is Mark I Molded Plastics of
Tennessee, Inc.
2. The duration of the corporation is perpetual.
3. The address of the principal office of the corporation in
the State of Tennessee shall be Cardinal Avenue, Henry, Tennessee, County of
Henry.
4. The corporation is for profit.
5. The purposes for which the corporation is organized are:
To manufacture, produce, process, and sell products
made of plastic and other materials and to do everything
incidental or conducive to the full accomplishment of the
foregoing, permitted by the laws of the State of Tennessee.
To transact any of the foregoing business, acting for
itself, or acting for another, or to become a partner, or
joint venturer in any partnership, or joint venture, engaged
in any business which this corporation is authorized to engage
in on its own behalf, and to adopt such assumed name or names,
as the directors of the corporation may, by resolution,
direct, and the directors of the corporation may authorize
officers to certify a person, or persons, to act for the
corporation in the conduct of any business, including joint
venture or partnership business.
<PAGE>
In furtherance of these purposes, the corporation shall possess and
exercise all powers and privileges granted corporations by the laws of the State
of Tennessee now or hereafter enacted, together with any powers incidental
thereto so far as such powers and privileges are necessary or convenient to the
conduct, promotion or attainment of the business or purposes of the
corporation.
6. The maximum number of shares that the corporation shall have the
authority to issue is 100 shares with no par value. All shares shall have equal
rights without preference for preemptive rights.
7. The corporation will not commence business until consideration of
One Thousand Dollars ($1,000.00) has been received for the issuance of shares.
8. Each holder of the stock of the corporation shall have one vote
irrespective of each share held by him of record in the books of the corporation
on all matters to be voted upon by the
stockholders.
9. Any corporate action upon which a vote of stockholders is required
or permitted may be taken without a meeting on written consent, setting forth
the action so taken, signed by all of the persons entitled to vote thereon.
Directors may take any action which they required or permitted to take without a
meeting upon written consent, setting forth the action so taken,
signed by all of the Directors.
10. The Board of Directors is expressly authorized to make, alter, or
repeal the by-laws of the corporation.
11. The corporation reserves the right to amend, alter, change or
repeal any provision pertaining to this certificate of incorporation in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this preservation.
<PAGE>
Dated this 29th day of April, 19981.
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/S/ Robert D. Tuke, Incorporator
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Sec'y. Init. ...... Page No.
BY-LAWS
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ARTICLE I
SHARES OF STOCK
SEC. 1. CAPITAL STOCK. The shares of this Corporation shall be divided
into --------- 5,000----------non-assessable shares of common stock, par value
$10 per share.
SEC. 2. CERTIFICATE OF SHARES. The Certificates for shares of the
Capital Stock of this Company shall be in such form, not inconsistent with the
Articles or Incorporation of the Company, as shall be prepared or be approved by
the Board of Directors. The Certificates shall be signed by the President or
Vice-President, and also by the Secretary.
SEC. 3. TRANSFER OF SHARES. Shares of the Capital Stock of the Company
shall be transferred by endorsement of the certificates representing said shares
by the registered holder thereof or his attorney, and its surrender to the
Secretary for cancellation. Whereupon the Secretary shall issue to the
transferee or transferees, as specified by the endorsement upon the surrendered
certificate, new certificates for a like number of shares. Transfers shall be
made only upon the books of the Company and upon said surrender and
cancellation; and shall entitle the transferee to all the privileges, rights and
interests of a shareholder of this Company, subject, however, to such
restrictions as may be endorsed upon the certificate.
SEC. 4. CLOSING OF TRANSFER BOOKS. The stock books shall be closed for
the meeting of the shareholders, and for the payment of dividends during such
period, not exceeding forty days, as, from time to time, may be determined by
the Board of Directors, and during such period no stock shall be transferred
upon said books.
SEC. 5. LIEN. The Corporation shall have a lien upon all stock or
property of its members invested therein, for all debts due to it by the owners
thereof.
SEC. 6. LOST CERTIFICATES. In case of the loss of any certificate of
shares of stock, upon due proof by the registered holder or his representatives,
by affidavit of such loss, the Secretary shall issue a duplicate certificate in
its place, Upon the corporation being fully indemnified therefor.
SEC. 7. DIVIDENDS. The Board of Directors, in its discretion, from
time to time, may declare dividends upon the Capital Stock from the surplus and
net profits of the Company.
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Sec'y. Init. ...... Page No.
BY-LAWS (Continued)
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SEC. 8. FISCAL YEAR. The fiscal year of the Company shall end on the
30th day of September in each year.
SEC. 9. CORPORATE SEAL. The Board of Directors shall provide a
suitable corporate seal, which seal shall be in charge of the Secretary, and
shall be used by him.
ARTICLE II
SHAREHOLDERS' MEETING
SEC. 1. TIME, PLACE AND PURPOSE. Meetings of the shareholders of the
Company shall be held annually at the registered office of the Company in
Jonesville, Michigan at 7:00 o'clock P.M. on the third Wednesday of each year
(after the year 1968), not a legal holiday, and if a legal holiday, then on the
day following, for the purpose of electing directors, and for the transaction of
such other business as may be brought before the meeting.
SEC. 2. SPECIAL MEETINGS. Special meetings of the Shareholders may be
called by the President and Secretary, and shall be called by either of them at
the request in writing or by vote of a majority of the Board of Directors, or at
the request in writing by shareholders of record owning a majority in amount, of
the entire Capital Stock of the Company issued and outstanding.
SEC. 3. NOTICE. Written notice of any shareholders' meeting shall be
mailed to each shareholder at his last known address, as the same appears on the
stock book of the Company, or otherwise, at least ten days prior to any meeting
and any notice of special meeting shall indicate briefly the object or objects
thereof. Nevertheless, if all the shareholders waive notice of the meeting, no
notice of the same shall be required, and whenever all the shareholders shall
meet in person or by proxy, such meeting shall be valid for all purposes,
without call or notice, and at such meeting any corporate action shall not be
invalid for want of notice.
SEC. 4. QUORUM. At any meeting of the shareholders, the holders of a
majority of all the voting shares of the capital stock of the Company issued and
outstanding, present in person or represented by proxy, shall constitute a
quorum. Meetings at which less than a quorum is represented may, however, be
adjourned from time to time to a further date by those who attend, without
further notice other than the announcement at such meeting, and when a quorum
shall be present upon any such adjourned day, any business may be transacted
which might have been transacted at the meeting as originally called.
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Sec'y. Init. ...... Page No.
BY-LAWS (Continued)
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SEC. 5. VOTING. Each shareholder shall be entitled to one vote for
each share of voting stock standing registered in his or her name on the books
of the Company, in person or by proxy duly appointed in writing and filed with
the Secretary of the meeting, on all questions and elections. No proxy shall be
voted after three years from its date unless said proxy provides for a longer
period.
SEC. 6. ORGANIZATION. The President shall call meetings of the
shareholders to order and shall act as Chairman of such meetings, unless
otherwise determined by the holders of a majority of all the shares of the
capital stock issued outstanding, present in person or by proxy. The Secretary
of the Company shall act as Secretary of all meetings of the Company, but in the
absence of the Secretary at any meeting of the shareholders or his inability to
act as Secretary, the presiding officer may appoint any person to act as
Secretary of the meeting.
SEC. 7. INSPECTORS. Whenever any shareholder present at a meeting of
shareholders shall request the appointment of inspectors, a majority of the
shareholders present at such meeting and entitled to vote thereat, shall appoint
inspectors who need not be shareholders. If the right of any person to vote at
such meeting shall be challenged, the inspectors of election shall determine
such right. The inspectors shall receive and count the votes either upon an
election or for the decision of any question and shall determine the result.
Their certificate of any vote shall be prima facie evidence thereof.
SEC. 8. GIVING NOTICE. Any notice required by statute or by these
By-Laws to be given to the Shareholders, or to directors, or to any officer of
the Company, shall be deemed to be sufficient to be given by depositing the same
in a post office box, in a sealed, postpaid wrapper, addressed to such
shareholder, director, or officer at his last known address, and such notice
shall be deemed to have been given at the time of such mailing.
SEC. 9. NEW SHAREHOLDERS. Every person becoming a shareholder in this
Company shall be deemed to assent to these By-Laws, and shall designate to the
Secretary the address to which he desires that the notice herein required to be
given may be sent, and all notices mailed to such addresses, with postage
prepaid, shall be considered as duly given at the date of mailing, and any
person failing to so designate his address shall be deemed to have waived notice
of such meeting.
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Sec'y. Init. ...... Page No.
BY-LAWS (Continued)
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ARTICLE III
DIRECTORS
SEC. 1. NUMBER, CLASSIFICATION AND TERM OF OFFICE. The business and
the property of the Company shall be managed and controlled by the Board of
Directors.
The number of Directors shall be two, but the number may be changed
from time to time by the alteration of these by-laws. The first Board of
Directors of this Corporation, named in the Articles of Incorporation, shall
hold office until the first annual meeting to be held on the __________ day
of and __________ thereafter on the second __________in __________ in each
year, beginning in __________ Directors shall hold office for the term of one
year, and/or until their successors are elected and qualified.
SEC. 2. PLACE OF MEETING. The Directors may hold their meetings in
such place or places within or without this State as a majority of the Board of
Directors may, from time to time determine.
SEC. 3. MEETINGS. Meetings of the Board of Directors may be called at
any time by the President or Secretary, or by a majority of the Board of
Directors. Directors shall be notified in writing of the time, place and purpose
of all meetings of the Board, except the regular annual meeting held immediately
after the annual meeting of shareholders, at least three days prior thereto. Any
Director shall, however, be deemed to have waived such notice by his attendance
at any meeting.
SEC. 4. QUORUM. A majority of the Board of Directors shall constitute
a quorum for the transaction of business, and if at any meeting of the Board of
Directors there be less than a quorum present, a majority of those present may
adjourn the meeting from time to time.
SEC. 5. VACANCIES. Vacancies in the Board of Directors shall be filled
by the remaining members of the Board and each person so elected shall be a
director until his successor is elected by the shareholders, who may make such
election at the next annual meeting of the stockholders or at any special
meeting duly called for that purpose.
SEC. 6. COMPENSATION. No Director shall receive any salary or
compensation for his services as Director, unless otherwise especially ordered
by the Board of Directors or by By-Law.
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Sec'y. Init. ...... Page No.
BY-LAWS (Continued)
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ARTICLE IV
OFFICERS
SEC. 1. The Board of Directors shall select a President, a Secretary
and a Treasurer and may select one or more Vice-Presidents, Assistant
Secretaries and Assistant Treasurers, who shall be elected by the Board of
Directors at their regular annual meeting held immediately after the adjournment
of the regular annual stockholders meeting. The term of office shall be for one
year and until their successors are chosen. No one of such officers, except the
President, need be a director, but a Vice-President who is not a director,
cannot succeed to or fill the office of President. Any two of the above offices,
except those of President and Vice-President, may be held by the same person,
but no officer shall execute, acknowledge, or verify any instrument in more than
one capacity. The Board of Directors may fix the salaries of the officers of the
Company.
SEC. 2. The Board of Directors may also appoint such other officers and
agents as they may deem necessary for the transaction of the business of the
Corporation. All officers and agents shall respectively have such authority and
perform such duties in the management of the property and affairs of the
Corporation as may be designated by the Board of Directors. Without limitation
of any right of an officer or agent to recover damages for breach of contract,
the Board of Directors may remove any officer or agent whenever, in their
judgment, the business interests of the Corporation will be served thereby.
SEC. 3. The Board of Directors may secure the fidelity of any or all
of such officers by bond or otherwise.
ARTICLE V
DUTIES OF OFFICERS
SEC. 1. PRESIDENT. The President shall be the chief executive officer
of the Company, and in the recess of the Board of Directors shall have the
general control and management of its business and affairs, subject, however, to
the right of the Board of Directors to delegate any specific power except such
as may be by statute exclusively conferred upon the President, to any other
officer or officers of the Company. He shall preside at all meetings of the
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Sec'y. Init. ...... Page No.
BY-LAWS (Continued)
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Directors and all meetings of the shareholders, unless otherwise determined by a
majority of all the shares of the capital stock issued and outstanding, present
in person or by proxy.
SEC. 2. VICE-PRESIDENT. In case the office of President shall become
vacant by death, resignation, or otherwise, or in case of the absence of the
President, or his disability to discharge the duties of his office, such duties
shall, for the time being, devolve upon the Vice- President who shall do and
perform such other acts as the Board of Directors may, from time to time,
authorize him to do, but a Vice-President who is not a director cannot succeed
to or fill the office of President.
SEC. 3. TREASURER. The Treasurer shall have custody and keep account of
all money, funds and property of the Company, unless otherwise determined by the
Board of Directors, and he shall render such accounts and present such statement
to the Directors and President as may be required of him. He shall deposit all
funds of the Company which may come into his hands in such bank or banks as the
Board of Directors may designate. He shall keep his bank accounts in the name of
the Company, and shall exhibit his books and accounts, at all reasonable times,
to any Director of the Company upon application at the office of the Company
during business hours. He shall pay out money as the business may require upon
the order of the properly constituted officer or officers of the Company, taking
proper vouchers therefor; provided, however, that the Board of Directors shall
have power by resolution to delegate any of the duties of the Treasurer to other
officers, and to provide by what officers, if any, all bills, notes, checks,
vouchers, orders or other instruments shall be countersigned. He shall perform,
in addition, such other duties as may be delegated to him by the Board of
Directors.
SEC. 4. SECRETARY. The Secretary of the Company shall keep the minutes
of all the meetings of the shareholders and Board of Directors in books provided
for that purpose; he shall attend to the giving and receiving of all notices of
the Company; he shall sign, with the President or Vice-President, in the name of
the Company, all contracts authorized by the Board of Directors, and when
necessary shall affix the corporate seal of the Company thereto; he shall have
charge of the certificate books, transfer books and stock ledgers and such other
books and papers as the Board of Directors may direct; all of which, shall, at
all reasonable times, be open to the examination of any Director upon
application at the office of Secretary, and in addition such other duties as may
be delegated to him by the Board of Directors.
<PAGE>
Sec'y. Init. ...... Page No.
BY-LAWS (Continued)
- -------------------------------------------------------------------------------
ARTICLE VI
AMENDMENTS
SEC. 1. The shareholders or the Board of Directors may alter, amend,
add to or repeal these By-Laws, including the fixing and altering of the Board
of Directors; provided that the Board of Directors shall not make or alter any
By-Laws fixing their qualifications, classifications, or term of office.
<PAGE>
EXECUTION COPY
- --------------------------------------------------------------------------------
---------------------------------
DURA OPERATING CORP.
SERIES A AND SERIES B
9% SENIOR SUBORDINATED NOTES DUE 2009
--------------------------
INDENTURE
Dated as of April 22, 1999
--------------------------
- --------------------------------------------------------------------------------
U.S. BANK TRUST NATIONAL ASSOCIATION,
Trustee
--------------
<PAGE>
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Act Section INDENTURE SECTION
<S> <C>
310 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .N.A.
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .N.A.
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.10
(i)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.10
(ii)(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .N.A.
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.11
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.11
(iii(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .N.A.
312 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.05
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.03
(iv)(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.03
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.06
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.07
(v)(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.06;
11.02
(vi)(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.06
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.03;
11.02
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.04
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.04
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .N.A.
(vii)(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.05
(f). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .NA
315 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.01
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.05,
11.02
(A)(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.01
(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.01
(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.11
316 (a)(last sentence) . . . . . . . . . . . . . . . . . . . . . . . .2.09
(a)(1)(A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.05
(a)(1)(B). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.04
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .N.A.
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.07
(B)(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.12
317 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.08
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.09
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.04
318 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.01
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .N.A.
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.01
N.A. means not applicable.
</TABLE>
*This Cross-Reference Table is not part of the Indenture.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE. . . . . . . . . . .1
Section 1.01. Definitions.. . . . . . . . . . . . . . . . . . . . . . . .1
Section 1.02. Other Definitions.. . . . . . . . . . . . . . . . . . . . 22
Section 1.03. Trust Indenture Act Definitions.. . . . . . . . . . . . . 23
Section 1.04. Rules of Construction.. . . . . . . . . . . . . . . . . . 23
ARTICLE 2. THE NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 2.01. Form and Dating.. . . . . . . . . . . . . . . . . . . . . 23
Section 2.02. Execution and Authentication. . . . . . . . . . . . . . . 24
Section 2.03. Registrar and Paying Agent. . . . . . . . . . . . . . . . 25
Section 2.04. Paying Agent to Hold Money in Trust.. . . . . . . . . . . 25
Section 2.05. Holder Lists. . . . . . . . . . . . . . . . . . . . . . . 25
Section 2.06. Transfer and Exchange.. . . . . . . . . . . . . . . . . . 26
Section 2.07. Replacement Notes.. . . . . . . . . . . . . . . . . . . . 37
Section 2.08. Outstanding Notes.. . . . . . . . . . . . . . . . . . . . 37
Section 2.09. Treasury Notes. . . . . . . . . . . . . . . . . . . . . . 37
Section 2.10. Temporary Notes.. . . . . . . . . . . . . . . . . . . . . 38
Section 2.11. Cancellation. . . . . . . . . . . . . . . . . . . . . . . 38
Section 2.12. Defaulted Interest. . . . . . . . . . . . . . . . . . . . 38
Section 2.13. CUSIP Numbers.. . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE 3. REDEMPTION AND PREPAYMENT . . . . . . . . . . . . . . . . . . 39
Section 3.01. Notices to Trustee. . . . . . . . . . . . . . . . . . . . 39
Section 3.02. Selection of Notes to Be Redeemed.. . . . . . . . . . . . 39
Section 3.03. Notice of Redemption. . . . . . . . . . . . . . . . . . . 39
Section 3.04. Effect of Notice of Redemption. . . . . . . . . . . . . . 40
Section 3.05. Deposit of Redemption Price.. . . . . . . . . . . . . . . 40
Section 3.06. Notes Redeemed in Part. . . . . . . . . . . . . . . . . . 41
Section 3.07. Optional Redemption.. . . . . . . . . . . . . . . . . . . 41
Section 3.08. Mandatory Redemption. . . . . . . . . . . . . . . . . . . 42
Section 3.09. Offer to Purchase by Application of Excess Proceeds.. . . 42
ARTICLE 4. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 4.01. Payment of Notes. . . . . . . . . . . . . . . . . . . . . 44
Section 4.02. Maintenance of Office or Agency.. . . . . . . . . . . . . 44
Section 4.03. Reports.. . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 4.04. Compliance Certificate. . . . . . . . . . . . . . . . . . 45
Section 4.05. Taxes.. . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 4.06. Stay, Extension and Usury Laws. . . . . . . . . . . . . . 46
Section 4.07. Restricted Payments.. . . . . . . . . . . . . . . . . . . 46
Section 4.08. Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries.. . . . . . . . . . . . . . . . . 50
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred
Stock.. . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 4.10. Asset Sales.. . . . . . . . . . . . . . . . . . . . . . . 54
Section 4.11. Transactions with Affiliates. . . . . . . . . . . . . . . 56
Section 4.12. Liens.. . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 4.13. Limitation on Foreign Indebtedness. . . . . . . . . . . . 57
i
<PAGE>
Section 4.14. Corporate Existence.. . . . . . . . . . . . . . . . . . . 58
Section 4.15. Offer to Repurchase Upon Change of Control. . . . . . . . 59
Section 4.16. No Senior Subordinated Debt.. . . . . . . . . . . . . . . 60
Section 4.17. Additional Subsidiary Guaranties. . . . . . . . . . . . . 60
Section 4.18. Designation of Restricted and Unrestricted Subsidiaries.. 60
Section 4.19. Payments for Consent. . . . . . . . . . . . . . . . . . . 60
ARTICLE 5. SUCCESSORS. . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 5.01. Merger, Consolidation, or Sale of Assets. . . . . . . . . 61
Section 5.02. Successor Corporation Substituted.. . . . . . . . . . . . 61
ARTICLE 6. DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . 62
Section 6.01. Events of Default.. . . . . . . . . . . . . . . . . . . . 62
Section 6.02. Acceleration. . . . . . . . . . . . . . . . . . . . . . . 63
Section 6.03. Other Remedies. . . . . . . . . . . . . . . . . . . . . . 64
Section 6.04. Waiver of Past Defaults.. . . . . . . . . . . . . . . . . 64
Section 6.05. Control by Majority.. . . . . . . . . . . . . . . . . . . 64
Section 6.06. Limitation on Suits.. . . . . . . . . . . . . . . . . . . 64
Section 6.07. Rights of Holders of Notes to Receive Payment.. . . . . . 65
Section 6.08. Collection Suit by Trustee. . . . . . . . . . . . . . . . 65
Section 6.09. Trustee May File Proofs of Claim. . . . . . . . . . . . . 65
Section 6.10. Priorities. . . . . . . . . . . . . . . . . . . . . . . . 66
Section 6.11. Undertaking for Costs.. . . . . . . . . . . . . . . . . . 66
ARTICLE 7. TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 7.01. Duties of Trustee.. . . . . . . . . . . . . . . . . . . . 66
Section 7.02. Rights of Trustee.. . . . . . . . . . . . . . . . . . . . 67
Section 7.03. Individual Rights of Trustee. . . . . . . . . . . . . . . 68
Section 7.04. Trustee's Disclaimer. . . . . . . . . . . . . . . . . . . 68
Section 7.05. Notice of Defaults. . . . . . . . . . . . . . . . . . . . 68
Section 7.06. Reports by Trustee to Holders of the Notes. . . . . . . . 69
Section 7.07. Compensation and Indemnity. . . . . . . . . . . . . . . . 69
Section 7.08. Replacement of Trustee. . . . . . . . . . . . . . . . . . 70
Section 7.09. Successor Trustee by Merger, etc. . . . . . . . . . . . . 71
Section 7.10. Eligibility; Disqualification.. . . . . . . . . . . . . . 71
Section 7.11. Preferential Collection of Claims Against Company.. . . . 71
ARTICLE 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE. . . . . . . . . . . 71
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance. 71
Section 8.02. Legal Defeasance and Discharge. . . . . . . . . . . . . . 71
Section 8.03. Covenant Defeasance.. . . . . . . . . . . . . . . . . . . 72
Section 8.04. Conditions to Legal or Covenant Defeasance. . . . . . . . 72
Section 8.05. Deposited Money and Government Securities to be Held
in Trust; Other Miscellaneous Provisions. . . . . . . . . 74
Section 8.06. Repayment to Company. . . . . . . . . . . . . . . . . . . 74
Section 8.07. Reinstatement.. . . . . . . . . . . . . . . . . . . . . . 74
ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER. . . . . . . . . . . . . . . 75
Section 9.01. Without Consent of Holders of Notes.. . . . . . . . . . . 75
Section 9.02. With Consent of Holders of Notes. . . . . . . . . . . . . 76
Section 9.03. Compliance with Trust Indenture Act.. . . . . . . . . . . 77
ii
<PAGE>
Section 9.04. Revocation and Effect of Consents.. . . . . . . . . . . . 77
Section 9.05. Notation on or Exchange of Notes. . . . . . . . . . . . . 77
Section 9.06. Trustee to Sign Amendments, etc.. . . . . . . . . . . . . 78
ARTICLE 10. SUBORDINATION. . . . . . . . . . . . . . . . . . . . . . . . 78
Section 10.01. Agreement to Subordinate. . . . . . . . . . . . . . . . . 78
Section 10.02. Liquidation; Dissolution; Bankruptcy. . . . . . . . . . . 78
Section 10.03. Default on Designated Senior Debt.. . . . . . . . . . . . 78
Section 10.04. Acceleration of Notes.. . . . . . . . . . . . . . . . . . 79
Section 10.05. When Distribution Must Be Paid Over.. . . . . . . . . . . 79
Section 10.06. Notice by Company.. . . . . . . . . . . . . . . . . . . . 80
Section 10.07. Subrogation.. . . . . . . . . . . . . . . . . . . . . . . 80
Section 10.08. Relative Rights.. . . . . . . . . . . . . . . . . . . . . 80
Section 10.09. Subordination May Not Be Impaired by Company. . . . . . . 80
Section 10.10. Distribution or Notice to Representative. . . . . . . . . 81
Section 10.11. Rights of Trustee and Paying Agent. . . . . . . . . . . . 81
Section 10.12. Authorization to Effect Subordination.. . . . . . . . . . 81
Section 10.13. Amendments. . . . . . . . . . . . . . . . . . . . . . . . 81
ARTICLE 11. GUARANTIES . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 11.01. Guaranty. . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 11.02. Subordination of Guaranty.. . . . . . . . . . . . . . . . 83
Section 11.03. Limitation on Guarantor Liability.. . . . . . . . . . . . 83
Section 11.04. Execution and Delivery of Guaranty. . . . . . . . . . . . 83
Section 11.05. Guarantors May Consolidate, etc., on Certain Terms. . . . 84
Section 11.06. Releases Following Sale of Assets.. . . . . . . . . . . . 84
ARTICLE 12. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . 85
Section 12.01. Trust Indenture Act Controls. . . . . . . . . . . . . . . 85
Section 12.02. Notices.. . . . . . . . . . . . . . . . . . . . . . . . . 85
Section 12.03. Communication by Holders of Notes with Other Holders
of Notes. . . . . . . . . . . . . . . . . . . . . . . . . 86
Section 12.04. Certificate and Opinion as to Conditions Precedent. . . . 86
Section 12.05. Statements Required in Certificate or Opinion.. . . . . . 87
Section 12.06. Rules by Trustee and Agents.. . . . . . . . . . . . . . . 87
Section 12.07. No Personal Liability of Directors, Officers, Employees and
Stockholders. . . . . . . . . . . . . . . . . . . . . . . 87
Section 12.08. Governing Law.. . . . . . . . . . . . . . . . . . . . . . 87
Section 12.09. No Adverse Interpretation of Other Agreements.. . . . . . 87
Section 12.10. Successors. . . . . . . . . . . . . . . . . . . . . . . . 88
Section 12.11. Severability. . . . . . . . . . . . . . . . . . . . . . . 88
Section 12.12. Counterpart Originals.. . . . . . . . . . . . . . . . . . 88
Section 12.13. Table of Contents, Headings, etc. . . . . . . . . . . . . 88
</TABLE>
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED
INVESTOR
Exhibit E FORM OF NOTATION OF GUARANTEE
Exhibit F FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY SUBSEQUENT
GUARANTORS
iii
<PAGE>
INDENTURE dated as of April 22, 1999 between Dura Operating
Corp., a Delaware corporation (the "Company"), the Guarantors signatories hereto
and U.S. Bank Trust National Association, as trustee (the "Trustee").
The Company, the Guarantors and the Trustee agree as follows
for the benefit of each other and for the equal and ratable benefit of the
Holders of the 9% Series A Senior Subordinated Notes due 2009 (the "Series A
Notes") and the 9% Series B Senior Subordinated Notes due 2009 (the "Series B
Notes" and, together with the Series A Notes, the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"144A GLOBAL NOTE" means a global note substantially in the form
of Exhibit A hereto bearing the Global Note Legend and the Private Placement
Legend and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount of the Notes sold in reliance on Rule 144A.
"ACQUIRED DEBT" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, whether or
not such Indebtedness is incurred in connection with, or in contemplation of,
such other Person merging with or into, or becoming a Subsidiary of, such
specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by such
specified Person.
"ADDITIONAL NOTES" means up to $50.0 million in aggregate
principal amount of Notes (other than the Initial Notes) issued under this
Indenture in accordance with Sections 2.02 and 4.09 hereof.
"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 purposes of this definition,
"control," as used with respect to any Person, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the ownership of voting
securities, by agreement or otherwise; PROVIDED, that beneficial ownership of
10% or more of the Voting Stock of a Person shall be deemed to be control. For
purposes of this definition, the terms "controlling," "controlled by" and "under
common control with" shall have correlative meanings.
"AGENT" means any Registrar, Paying Agent or co-registrar.
"APPLICABLE PROCEDURES" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depositary, Euroclear and Cedelbank that apply to such
transfer or exchange.
"ASSET SALE" means:
1
<PAGE>
(1) the sale, lease, conveyance or other disposition of any
assets or rights, other than sales or leases in the ordinary course of business
consistent with past practices; PROVIDED that the sale, conveyance or other
disposition of all or substantially all of the assets of the Company and its
Subsidiaries taken as a whole will be governed by the provisions of this
Indenture described in Section 4.15 hereof and/or the provisions described in
Section 5.01 hereof and not by the provisions of Section 4.10 hereof; and
(2) the issuance of Equity Interests by any of the Company's
Restricted Subsidiaries or the sale of Equity Interests in any of its
Subsidiaries.
Notwithstanding the preceding, the following items shall not be
deemed to be Asset Sales:
(1) any single transaction or series of related transactions that
involves assets having a fair market value of less than $5.0 million;
(2) a transfer of assets between or among the Company and its
Restricted Subsidiaries;
(3) an issuance of Equity Interests by a Restricted Subsidiary to
the Company or to another Restricted Subsidiary;
(4) the sale, lease or license of property, plant, equipment,
inventory, accounts receivable or other assets in the ordinary course of
business;
(5) the sale or other disposition of cash or Cash Equivalents;
(6) a Restricted Payment or Permitted Investment that is
permitted by Section 4.07 hereof;
(7) the licensing of intellectual property; and
(8) sales of receivables and related assets (including contract
rights) of the type specified in the definition of "Qualified Securitization
Transaction" to a Securitization Entity for the fair market value thereof,
including consideration in the amount specified in the proviso to the definition
of Qualified Securitization Transaction.
"BANKRUPTCY LAW" means Title 11, U.S. Code or any similar federal
or state law for the relief of debtors.
"BENEFICIAL OWNER" has the meaning assigned to such term in Rule
13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the
beneficial ownership of any particular "person" (as that term is used in Section
13(d)(3) of the Exchange Act), such "person" shall be deemed to have beneficial
ownership of all securities that such "person" has the right to acquire by
conversion or exercise of other securities, whether such right is currently
exercisable or is exercisable only upon the occurrence of a subsequent
condition. The terms "Beneficially Owns" and "Beneficially Owned" shall have a
corresponding meaning.
"BOARD OF DIRECTORS" means:
2
<PAGE>
(1) with respect to a corporation, the board of directors of the
corporation;
(2) with respect to a partnership, the Board of Directors of the
general partner of the partnership; and
(3) with respect to any other Person, the board or committee of
such Person serving a similar function.
"BROKER-DEALER" has the meaning set forth in the Registration
Rights Agreement.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CAPITAL LEASE OBLIGATION" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital lease
that would at that time be required to be capitalized on a balance sheet in
accordance with GAAP.
"CAPITAL STOCK" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and
(4) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"CASH EQUIVALENTS" means:
(1) United States dollars;
(2) securities issued or directly and fully guaranteed or insured
by the United States government or any agency or instrumentality thereof
(PROVIDED that the full faith and credit of the United States is pledged in
support thereof) having maturities of not more than twelve months from the date
of acquisition;
(3) certificates of deposit and eurodollar time deposits with
maturities of twelve months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding six months and overnight bank
deposits, in each case, with any lender party to the Credit Agreement or, with
any domestic commercial bank having capital and surplus in excess of $500.0
million and a Thompson Bank Watch Rating of "B" or better;
(4) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clauses (2) and (3)
above entered into with any financial institution meeting the qualifications
specified in clause (3) above;
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(5) commercial paper having the highest rating obtainable from
Moody's Investors Service, Inc. or Standard & Poor's Rating Service and in each
case maturing within twelve months after the date of acquisition;
(6) money market funds at least 95% of the assets of which
constitute Cash Equivalents of the kinds described in clauses (1) through (5) of
this definition; and
(7) Indebtedness with a rating of "A" or higher from Standard &
Poor's Rating Service or "A-2" or higher from Moody's Investors Service, Inc.
"CEDELBANK" means Cedelbank.
"CHANGE OF CONTROL" means the occurrence of any of the following:
(1) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a series
of related transactions, of all or substantially all of the properties or assets
of the Company and its Restricted Subsidiaries taken as a whole to any "person"
(as that term is used in Section 13(d)(3) of the Exchange Act) other than a
Principal or a Related Party of a Principal;
(2) the adoption of a plan relating to the liquidation or
dissolution of the Company;
(3) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" (as defined above), other than the Principals and their Related
Parties, becomes the Beneficial Owner, directly or indirectly, of more than 50%
of the Voting Stock of the Company, measured by voting power rather than number
of shares;
(4) the first day on which a majority of the members of the Board
of Directors of the Company are not Continuing Directors;
(5) the first day on which DASI ceases to own 100% of the
outstanding Equity Interests of the Company; or
(6) the Company consolidates with, or merges with or into, any
Person, or any Person consolidates with, or merges with or into, the Company, in
any such event pursuant to a transaction in which any of the outstanding Voting
Stock of the Company or such other Person is converted into or exchanged for
cash, securities or other property, other than any such transaction where the
Voting Stock of the Company outstanding immediately prior to such transaction is
converted into or exchanged for Voting Stock (other than Disqualified Stock) of
the surviving or transferee Person constituting a majority of the outstanding
shares of such Voting Stock of such surviving or transferee Person (immediately
after giving effect to such issuance).
"COMPANY" means Dura Operating Corp., and any and all successors
thereto.
"CONSOLIDATED CASH FLOW" means, with respect to any specified
Person for any period, the Consolidated Net Income of such Person for such
period PLUS:
(1) an amount equal to any extraordinary loss plus any net loss
realized by such Person
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or any of its Subsidiaries in connection with an Asset Sale, to the extent such
losses were deducted in computing such Consolidated Net Income; PLUS
(2) provision for taxes based on income or profits of such Person
and its Subsidiaries for such period, to the extent that such provision for
taxes was deducted in computing such Consolidated Net Income; PLUS
(3) consolidated interest expense of such Person and its
Subsidiaries for such period, whether paid or accrued and whether or not
capitalized (including, without limitation, amortization of debt issuance costs
and original issue discount, non-cash interest payments, the interest component
of any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, commissions, discounts and other fees
and charges incurred in respect of letter of credit or bankers' acceptance
financings, and net of the effect of all payments made or received pursuant to
Hedging Obligations), to the extent that any such expense was deducted in
computing such Consolidated Net Income; PLUS
(4) depreciation, amortization (including amortization of
goodwill and other intangibles but excluding amortization of prepaid cash
expenses that were paid in a prior period) and other non-cash expenses
(excluding any such non-cash expense to the extent that it represents an accrual
of or reserve for cash expenses in any future period or amortization of a
prepaid cash expense that was paid in a prior period) of such Person and its
Subsidiaries for such period to the extent that such depreciation, amortization
and other non-cash expenses were deducted in computing such Consolidated Net
Income; MINUS
(5) non-cash items increasing such Consolidated Net Income for
such period, other than the accrual of revenue in the ordinary course of
business, in each case, on a consolidated basis and determined in accordance
with GAAP.
Notwithstanding the preceding, the provision for taxes based on
the income or profits of, and the depreciation and amortization and other
non-cash expenses of, a Subsidiary of the Company shall be added to Consolidated
Net Income to compute Consolidated Cash Flow of the Company only to the extent
that a corresponding amount would be permitted at the date of determination to
be dividended to the Company by such Subsidiary without prior governmental
approval (that has not been obtained), and without direct or indirect
restriction pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to that Subsidiary or its stockholders.
"CONSOLIDATED NET INCOME" means, with respect to any specified
Person for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; PROVIDED that:
(1) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the specified Person or a Wholly Owned Restricted
Subsidiary thereof;
(2) the Net Income of any Restricted Subsidiary shall be
excluded to the extent that
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the declaration or payment of dividends or similar distributions by that
Restricted Subsidiary of that Net Income is not at the date of determination
permitted without any prior governmental approval (that has not been obtained)
or, directly or indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Restricted Subsidiary or its stockholders;
(3) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition shall
be excluded;
(4) the cumulative effect of a change in accounting
principles shall be excluded; and
(5) the Net Income (but not loss) of any Unrestricted
Subsidiary shall be excluded, whether or not distributed to the specified Person
or one of its Subsidiaries.
"CONTINUING DIRECTORS" means, as of any date of determination,
any member of the Board of Directors of the Company who:
(1) was a member of such Board of Directors on the date of this
Indenture; or
(2) was nominated for election or elected to such Board of
Directors with the approval of a majority of the Continuing Directors who were
members of such Board at the time of such nomination or election.
"CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the address
of the Trustee specified in Section 12.02 hereof or such other address as to
which the Trustee may give notice to the Company.
"CREDIT AGREEMENT" means that certain Amended and Restated Credit
Agreement, dated as of March 19, 1999, by and among the Company, DASI and
various direct and indirect wholly owned Subsidiaries of DASI and Bank of
America National Trust and Savings Association as a lender and as agent, and
certain other lenders, providing for up to $1,150 million of aggregate
borrowings, including any related notes, guarantees, collateral documents,
instruments and agreements executed in connection therewith, and in each case as
amended, modified, renewed, refunded, replaced or refinanced from time to time.
"CREDIT FACILITIES" means, one or more debt facilities
(including, without limitation, the Credit Agreement) or commercial paper
facilities, in each case with banks or other institutional lenders providing for
revolving credit loans, term loans, receivables financing (including through the
sale of receivables to such lenders or to special purpose entities formed to
borrow from such lenders against such receivables) or letters of credit, in each
case, as amended, restated, modified, renewed, refunded, replaced or refinanced
in whole or in part from time to time.
"CUSTODIAN" means the Trustee, as custodian with respect to the
Notes in global form, or any successor entity thereto.
"DASI" means Dura Automotive Systems, Inc., a Delaware
corporation, and any and all successors thereto.
"DEFAULT" means any event that is, or with the passage of time or
the giving of notice or
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both would be, an Event of Default.
"DEFINITIVE NOTE" means a certificated Note registered in the
name of the Holder thereof and issued in accordance with Section 2.06 hereof, in
the form of Exhibit A hereto except that such Note shall not bear the Global
Note Legend and shall not have the "Schedule of Exchanges of Interests in the
Global Note" attached thereto.
"DEPOSITARY" means, with respect to the Notes issuable or issued
in whole or in part in global form, the Person specified in Section 2.03 hereof
as the Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"DESIGNATED NONCASH CONSIDERATION" means any non-cash
consideration (other than non-cash consideration that would constitute a
Restricted Investment) received by the Company or one of its Restricted
Subsidiaries in connection with an Asset Disposition that is so designated as
Designated Noncash Consideration pursuant to an Officers' Certificate executed
by the principal executive officer and the principal financial officer of the
Company or such Restricted Subsidiary. Such Officers' Certificate shall state
the basis of such valuation, which shall be a report of a nationally recognized
investment banking firm with respect to the receipt in one or a series of
related transactions of Designated Noncash Consideration with a fair market
value in excess of $5.0 million.
"DESIGNATED PREFERRED STOCK" means preferred stock that is so
designated as Designated Preferred Stock, pursuant to an Officers' Certificate
executed by the principal executive officer and the principal financial officer
of the Company, on the issuance date thereof, the cash proceeds of which are
excluded from the calculation set forth in clause (iii)(B) of the first
paragraph of Section 4.07 hereof.
"DESIGNATED SENIOR DEBT" means:
(1) any Indebtedness outstanding under the Credit Agreement;
and
(2) after payment in full of all Obligations under the Credit
Agreement, any other Senior Debt of the Company permitted under this Indenture
the principal amount of which is $20.0 million or more and that has been
designated by the Company as "Designated Senior Debt."
"DISQUALIFIED STOCK" means 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, in each case at the option of the holder thereof), 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, on or prior to the date that is 91 days after the
date on which the Notes mature. Notwithstanding the preceding sentence, any
Capital Stock that would constitute Disqualified Stock solely because the
holders thereof have the right to require the Company to repurchase such Capital
Stock upon the occurrence of a change of control or an asset sale shall not
constitute Disqualified Stock if the terms of such Capital Stock provide that
the Company may not repurchase or redeem any such Capital Stock pursuant to such
provisions unless such repurchase or redemption complies with Section 4.07
hereof.
"DOMESTIC RESTRICTED SUBSIDIARY" means any Restricted Subsidiary
that was formed under the laws of the United States or any state thereof or the
District of Columbia.
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"EQUITY INTERESTS" means Capital Stock and all warrants, options
or other rights to acquire Capital Stock (but excluding any debt security that
is convertible into, or exchangeable for, Capital Stock).
"EQUITY OFFERING" means an offering by the Company or DASI of
shares of its Common Stock (however designated and whether voting or non-voting)
and any and all rights, warrants or options to acquire such Common Stock;
provided that, in the event of any Equity Offering by DASI, DASI contributes to
the common equity capital of the Company (other than as Disqualified Stock) the
net cash proceeds of such Equity Offering.
"EUROCLEAR" means Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear system.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXCHANGE NOTES" means the Notes issued in the Exchange Offer
pursuant to Section 2.06(f) hereof.
"EXCHANGE OFFER" has the meaning set forth in the Registration
Rights Agreement.
"EXCHANGE OFFER REGISTRATION STATEMENT" has the meaning set forth
in the Registration Rights Agreement.
"EXISTING INDEBTEDNESS" means the aggregate principal amount of
Indebtedness of the Company and its Subsidiaries (other than Indebtedness under
the Credit Agreement) in existence on the date of this Indenture, until such
amounts are repaid.
"FIXED CHARGES" means, with respect to any specified Person for
any period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued, including,
without limitation, original issue discount, non-cash interest payments, the
interest component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, commissions,
discounts and other fees and charges incurred in respect of letter of credit or
bankers' acceptance financings, and net of the effect of all payments made or
received pursuant to Hedging Obligations; PLUS
(2) the consolidated interest of such Person and its Restricted
Subsidiaries that was capitalized during such period; PLUS
(3) any interest expense on Indebtedness of another Person that
is guaranteed by such Person or any one of its Restricted Subsidiaries or
secured by a Lien on assets of such Person or any one of its Restricted
Subsidiaries, whether or not such guaranty or Lien is called upon; PLUS
(4) the product of (a) all dividends, whether paid or accrued and
whether or not in cash, on any series of preferred stock of such Person or any
of its Restricted Subsidiaries, other than dividends on Equity Interests payable
solely in Equity Interests of the Company (other than Disqualified Stock) or to
the Company or a Restricted Subsidiary of the Company, times (b) a fraction, the
numerator of which
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is one and the denominator of which is one minus the then current combined
federal, state and local statutory tax rate of such Person, expressed as a
decimal, in each case, on a consolidated basis and in accordance with GAAP.
"FIXED CHARGE COVERAGE RATIO" means, with respect to any
specified Person and its Restricted Subsidiaries for any period, the ratio of
the Consolidated Cash Flow of such Person for such period to the Fixed Charges
of such Person for such period. In the event that the specified Person or any
of its Restricted Subsidiaries incurs, assumes, guarantees, repays, repurchases
or redeems any Indebtedness (other than ordinary working capital borrowings) or
issues, repurchases or redeems preferred stock subsequent to the commencement of
the period for which the Fixed Charge Coverage Ratio is being calculated and on
or prior to the date on which the event for which the calculation of the Fixed
Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge
Coverage Ratio shall be calculated giving pro forma effect to such incurrence,
assumption, guarantee, repayment, repurchase or redemption of Indebtedness, or
such issuance, repurchase or redemption of preferred stock, and the use of the
proceeds therefrom as if the same had occurred at the beginning of the
applicable four-quarter reference period.
In addition, for purposes of calculating the Fixed Charge
Coverage Ratio:
(1) acquisitions that have been made by the specified Person
or any of its Restricted Subsidiaries, including through mergers or
consolidations and including any related financing transactions, during the
four-quarter reference period or subsequent to such reference period and on or
prior to the Calculation Date shall be given pro forma effect as if they had
occurred on the first day of the four-quarter reference period and Consolidated
Cash Flow for such reference period shall be calculated on a pro forma basis in
accordance with Regulation S-X under the Securities Act (giving effect to any
Pro Forma Cost Savings), but without giving effect to clause (3) of the proviso
set forth in the definition of Consolidated Net Income;
(2) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, shall be excluded; and
(3) the Fixed Charges attributable to discontinued
operations, as determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, shall be excluded, but only to the
extent that the obligations giving rise to such Fixed Charges will not be
obligations of the specified Person or any of its Restricted Subsidiaries
following the Calculation Date.
"GAAP" means generally accepted accounting principles set forth
in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect as of the date hereof.
"GLOBAL NOTES" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, substantially in the
form of Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(iv),
2.06(d)(ii) or 2.06(f) hereof.
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"GLOBAL NOTE LEGEND" means the legend set forth in Section
2.06(g)(ii), which is required to be placed on all Global Notes issued under
this Indenture.
"GOVERNMENT SECURITIES" means direct obligations of, or
obligations guaranteed by, the United States of America, and the payment for
which the United States pledges its full faith and credit.
"GUARANTY" means a guarantee other than by endorsement of
negotiable instruments for collection in the ordinary course of business, direct
or indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"GUARANTY" means (i) the guarantee of the Notes by DASI and
certain of the Domestic Restricted Subsidiaries of the Company; and (ii) the
guarantee of the Notes by any Restricted Subsidiary required under the terms of
Section 4.17 hereof.
"GUARANTORS" means each of:
(1) DASI; Dura Automotive Systems, Inc. Column Shifter
Operations; Universal Tool & Stamping Company Inc.; Dura Automotive Systems
Cable Operations, Inc.; Adwest Electronics, Inc.; Adwest Western Automotive,
Inc.; X.E. Co.; Excel of Tennessee, L.P.; Excel Corporation; Excel Industries of
Michigan, Inc.; Anderson Industries, Inc.; Hydro Flame Corporation; Atwood
Industries, Inc.; Atwood Automotive Inc.; Mark I Molded Plastics, Inc.; and Mark
I Molded Plastics of Tennessee, Inc.; and
(2) any other subsidiary that executes a Guaranty in accordance
with the provisions of this Indenture;
and their respective successors and assigns.
"HEDGING OBLIGATIONS" means, with respect to any specified
Person, the obligations of such Person under:
(1) interest rate swap agreements, interest rate cap agreements
and interest rate collar agreements; and
(2) other agreements or arrangements designed to protect such
Person against fluctuations in interest rates and currency values.
"HOLDER" means a Person in whose name a Note is registered.
"IAI GLOBAL NOTE" means the Global Note substantially in the form
of Exhibit A hereto bearing the Global Note Legend and the Private Placement
Legend and deposited with or on behalf of and registered in the name of the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount of the Notes held by Institutional Accredited
Investors.
"INDEBTEDNESS" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent, in respect of:
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(1) borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments
or letters of credit (or reimbursement agreements in respect thereof);
(3) banker's acceptances;
(4) representing Capital Lease Obligations;
(5) the balance deferred and unpaid of the purchase price of any
property, except any such balance that constitutes an accrued expense or trade
payable; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than
letters of credit and Hedging Obligations) would appear as a liability upon a
balance sheet of the specified Person prepared in accordance with GAAP. In
addition, the term "Indebtedness" includes all Indebtedness of others secured by
a Lien on any asset of the specified Person (whether or not such Indebtedness is
assumed by the specified Person) and, to the extent not otherwise included, the
guaranty by the specified Person of any Indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date shall
be:
(1) the accreted value thereof, in the case of any Indebtedness
issued with original issue discount; and
(2) the principal amount thereof, together with any interest
thereon that is more than 30 days past due, in the case of any other
Indebtedness.
"INDENTURE" means this Indenture, as amended or supplemented from
time to time.
"INDIRECT PARTICIPANT" means a Person who holds a beneficial
interest in a Global Note through a Participant.
"INITIAL NOTES" means $300.0 million in aggregate principal
amount of Notes originally issued under this Indenture on the date hereof.
"INSTITUTIONAL ACCREDITED INVESTOR" means an institution that is
an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.
"INVESTMENTS" means, with respect to any Person, all direct or
indirect investments by such Person in other Persons (including Affiliates) in
the forms of loans (including guaranties or other obligations), advances or
capital contributions (excluding commissions, travel and similar advances to
officers and employees made in the ordinary course of business), purchases or
other acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the Company
or any Restricted Subsidiary of the Company sells or otherwise disposes of any
Equity Interests of any direct or indirect Restricted Subsidiary of the Company
such that, after giving effect to any such
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sale or disposition, such Person is no longer a Restricted Subsidiary of the
Company, the Company shall be deemed to have made an Investment on the date of
any such sale or disposition equal to the fair market value of the Equity
Interests of such Restricted Subsidiary not sold or disposed of in an amount
determined as provided in the final paragraph of Section 4.07 hereof. The
acquisition by the Company or any Restricted Subsidiary of the Company of a
Person that holds an Investment in a third Person shall be deemed to be an
Investment by the Company or such Restricted Subsidiary in such third Person in
an amount equal to the fair market value of the Investment held by the acquired
Person in such third Person in an amount determined as provided in the final
paragraph Section 4.07 hereof.
"LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which
banking institutions in the City of New York or at a place of payment, are
authorized by law, regulation or executive order to remain closed. If a payment
date is a Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue on such payment for the intervening period.
"LETTER OF TRANSMITTAL" means the letter of transmittal to be
prepared by the Company and sent to all Holders of the Notes for use by such
Holders in connection with the Exchange Offer.
"LIEN" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law, including any conditional sale or other title retention agreement, any
lease in the nature thereof, any option or other agreement to sell or give a
security interest in and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction.
"LIQUIDATED DAMAGES" means all liquidated damages then owing
pursuant to Section 5 of the Registration Rights Agreement.
"NET INCOME" means, with respect to any specified Person, the net
income (loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however:
(1) any gain or loss, together with any related provision for
taxes on such gain or loss, realized in connection with: (a) any Asset Sale; or
(b) the disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries; and
(2) any extraordinary gain or loss, together with any related
provision for taxes on such extraordinary gain or loss.
"NET PROCEEDS" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale, including, without limitation,
legal, accounting and investment banking fees, and sales commissions, and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof, in each case after taking into account any available tax credits
or deductions and any tax sharing arrangements and amounts required to be
applied to the repayment of
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Indebtedness, other than Senior Debt of the Company or a Guarantor, secured by a
Lien on the asset or assets that were the subject of such Asset Sale and any
reserve for adjustment in respect of the sale price of such asset or assets
established in accordance with GAAP.
"NON-RECOURSE DEBT" means Indebtedness:
(1) as to which neither the Company nor any of its Restricted
Subsidiaries (a) provides credit support of any kind (including any undertaking,
agreement or instrument that would constitute Indebtedness), (b) is directly or
indirectly liable as a guarantor or otherwise, or (c) constitutes the lender;
(2) no default with respect to which (including any rights that
the holders thereof may have to take enforcement action against an Unrestricted
Subsidiary) would permit upon notice, lapse of time or both any holder of any
other Indebtedness of the Company or any of its Restricted Subsidiaries to
declare a default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity; and
(3) as to which the lenders have been notified in writing that
they will not have any recourse to the stock or assets of the Company or any of
its Restricted Subsidiaries.
"NON-U.S. PERSON" means a Person who is not a U.S. Person.
"NOTES" has the meaning assigned to it in the preamble to this
Indenture. The Initial Notes and the Additional Notes shall be treated as a
single class for all purposes under this Indenture.
"OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"OFFICER" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary or any Vice-President of such Person.
"OFFICERS' CERTIFICATE" means a certificate signed on behalf of
the Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 12.05 hereof.
"OPINION OF COUNSEL" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
12.05 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"PARTICIPANT" means, with respect to the Depositary, Euroclear or
Cedelbank, a Person who has an account with the Depositary, Euroclear or
Cedelbank, respectively (and, with respect to The Depository Trust Company,
shall include Euroclear and Cedelbank).
"PERMITTED BUSINESS" means the business conducted by the Company
and its Restricted Subsidiaries on the date hereof and businesses reasonably
related thereto.
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"PERMITTED INVESTMENTS" means:
(1) any Investment in the Company or in a Restricted Subsidiary;
(2) any Investment in Cash Equivalents;
(3) any Investment by the Company or any Restricted Subsidiary of
the Company in a Person, if as a result of such Investment:
(a) such Person becomes a Restricted Subsidiary of
the Company; or
(b) such Person is merged, consolidated or
amalgamated with or into, or transfers or conveys substantially
all of its assets to, or is liquidated into, the Company or a
Restricted Subsidiary of the Company;
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in compliance
with Section 4.10 hereof;
(5) any acquisition of assets solely in exchange for the issuance
of Equity Interests (other than Disqualified Stock) of the Company or DASI;
(6) Hedging Obligations;
(7) other Investments in any Person having an aggregate fair
market value (measured on the date each such Investment was made and without
giving effect to subsequent changes in value), when taken together with all
other Investments made pursuant to this clause (7) that are at the time
outstanding, not to exceed the greater of (x) $50.0 million and (y) 5.0% of
Total Assets;
(8) Investments existing on the date of this Indenture and any
amendment, modification, restatement, supplement, extension, renewal, refunding,
replacement, refinancing, in whole or in part, thereof;
(9) any Investment by the Company or a Subsidiary of the Company
in a Securitization Entity or any Investment by a Securitization Entity in any
other Person in connection with a Qualified Securitization Transaction; PROVIDED
that any Investment in a Securitization Entity is in the form of a Purchase
Money Note or any equity interest;
(10) Investments in Permitted Joint Ventures of up to $25.0
million outstanding at any one time;
(11) Investments in Unrestricted Subsidiaries in an amount at any
one time outstanding not to exceed $10.0 million; and
(12) Investments in securities of trade creditors or customers
received pursuant to a plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of such trade creditors or customers.
"PERMITTED JOINT VENTURE" means an entity characterized as a
joint venture (however
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structured) engaged in a Permitted Business and in which the Company or a
Restricted Subsidiary (a) owns at least 20% of the ownership interest or (b) has
the right to receive at least 20% of the profits or distributions; provided that
such joint venture is not a Subsidiary.
"PERMITTED JUNIOR SECURITIES" means:
(1) Equity Interests in the Company, DASI or any Guarantor; or
(2) debt securities that are subordinated to all Senior Debt and
any debt securities issued in exchange for Senior Debt to substantially the same
extent as, or to a greater extent than, the Notes and the Guaranties are
subordinated to Senior Debt under this Indenture.
"PERMITTED LIENS" means:
(1) Liens of the Company and any Guarantor securing Indebtedness
and other Obligations under the Credit Facilities that were securing Senior Debt
that was permitted by the terms of this Indenture to be incurred;
(2) Liens in favor of the Company or the Guarantors;
(3) Liens on property of a Person existing at the time such
Person is merged with or into or consolidated with the Company or any Subsidiary
of the Company; PROVIDED that such Liens were in existence prior to the
contemplation of such merger or consolidation and do not extend to any assets
other than those of the Person merged into or consolidated with the Company or
the Subsidiary;
(4) Liens on property existing at the time of acquisition
thereof by the Company or any Subsidiary of the Company, PROVIDED that such
Liens were in existence prior to the contemplation of such acquisition;
(5) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business;
(6) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by clause (iv) of the second paragraph of the Section
4.09 hereof covering only the assets acquired with such Indebtedness;
(7) Liens existing on the date of this Indenture;
(8) Liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently concluded, PROVIDED
that any reserve or other appropriate provision as shall be required in
conformity with GAAP shall have been made therefor;
(9) Liens incurred in the ordinary course of business of the
Company or any Subsidiary of the Company with respect to obligations that do not
exceed $5.0 million at any one time outstanding;
(10) Liens on assets of Unrestricted Subsidiaries that secure
Non-Recourse Debt of
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Unrestricted Subsidiaries;
(11) Liens on assets of a Restricted Subsidiary that is not a
Guarantor that secures Indebtedness (including Acquired Indebtedness) incurred
in compliance with Section 4.13 hereof.
(12) judgment Liens not giving rise to an Event of Default;
(13) Liens encumbering deposits made to secure obligations
arising from statutory, regulatory, contractual, or warranty requirements of the
Company or any of its Restricted Subsidiaries, including rights of offset and
set-off;
(14) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customer duties in connection with the
importation of goods;
(15) Liens on assets transferred to a Securitization Entity or
on assets of a Securitization Entity, in either case incurred in connection with
a Qualified Securitization Transaction;
(16) leases or subleases granted to others that do not
materially interfere with the ordinary course of business of the Company and its
Restricted Subsidiaries;
(17) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance and
other types of social security, including any Lien securing letters of credit
issued in the ordinary course of business consistent with past practice in
connection therewith, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money);
(18) Liens imposed by law, such as carriers', warehouseman's
and mechanics' Liens in each case for sums not yet due or being contested in
good faith;
(19) Liens securing Indebtedness or other obligations of a
Restricted Subsidiary owing to the Company or any Guarantor to the extent such
Indebtedness is permitted to be incurred in accordance with Section 4.09 hereof;
(20) Liens securing Hedging Obligations as long as the related
Indebtedness is, and is permitted to be under this Indenture to be, secured by a
Lien on the same property securing the Hedging Obligations;
(21) Liens on specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations with respect to
bankers' acceptances issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or other goods;
and
(22) Liens arising from Uniform Commercial Code financing
statement filings regarding operating leases entered into by the Company and its
Restricted Subsidiaries in the ordinary course of business.
"PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness of
the Company or any of its Restricted Subsidiaries issued in exchange for, or the
net proceeds of which are used to extend,
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refinance, renew, replace, defease or refund other Indebtedness of the Company
or any of its Restricted Subsidiaries (other than intercompany Indebtedness);
PROVIDED that:
(1) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the principal amount (or
accreted value, if applicable) of the Indebtedness so extended, refinanced,
renewed, replaced, defeased or refunded (plus all accrued interest thereon and
the amount of all expenses and premiums incurred in connection therewith);
(2) such Permitted Refinancing Indebtedness has a final maturity
date later than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of, the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded;
(3) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to the Notes,
such Permitted Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and is subordinated in right of payment to, the Notes on
terms at least as favorable to the Holders of Notes as those contained in the
documentation governing the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; and
(4) such Indebtedness is incurred either by the Company or by the
Restricted Subsidiary who is the obligor on the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company or government or other entity.
"PRINCIPALS" means Onex DHC LLC, Alkin Co. and J2R Corporation.
"PRIVATE PLACEMENT LEGEND" means the legend set forth in Section
2.06(g)(i) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
"PRO FORMA COST SAVINGS" means, with respect to any period, the
reduction in costs that occurred during the four-quarter period or after the end
of the four-quarter period and on or prior to the Transaction Date that were
directly attributable to an asset acquisition and calculated on a basis that is
consistent with Article 11 of Regulation S-X under the Securities Act as in
effect on the date hereof.
"PRODUCTIVE ASSETS" means assets that are used or useful in, or
Capital Stock of any person engaged in, a Permitted Business.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"QUALIFIED SECURITIZATION TRANSACTION" means any transaction or
series of transactions pursuant to which the Company or any of its Restricted
Subsidiaries may sell, convey or otherwise transfer to (a) a Securitization
Entity (in the case of a transfer by the Company or any of its Restricted
Subsidiaries) and (b) any other Person (in case of a transfer by a
Securitization Entity), or may grant a security interest in, any accounts
receivable or equipment (whether now existing or arising or acquired in
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the future) of the Company or any of its Restricted Subsidiaries, and any assets
related thereto including, without limitation, all collateral securing such
accounts receivable and equipment and other assets (including contract rights
and all guarantees or other obligations in respect to such accounts receivable
and equipment, proceeds of such accounts receivable and equipment and other
assets (including contract rights) which are customarily transferred or in
respect of which security interests are customarily granted in connection with
asset securitization transactions involving accounts receivable and equipment,
all of the foregoing for the purpose of providing working capital financing on
terms that are more favorable to the Company and its Restricted Subsidiary than
would otherwise be available at that time.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of April 22, 1999, by and among the Company and the other
parties named on the signature pages thereof, as such agreement may be amended,
modified or supplemented from time to time and, with respect to any Additional
Notes, one or more registration rights agreements between the Company and the
other parties thereto, as such agreement(s) may be amended, modified or
supplemented from time to time, relating to rights given by the Company to the
purchasers of Additional Notes to register such Additional Notes under the
Securities Act.
"REGULATION S" means Regulation S promulgated under the
Securities Act.
"REGULATION S GLOBAL NOTE" means a Global Note bearing the Global
Note Legend and the Private Placement Legend and deposited with or on behalf of
and registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the Notes resold in
reliance on Rule 904 of Regulation S.
"RELATED PARTY" means:
(1) any controlling stockholder, 80% (or more) owned
Subsidiary, or immediate family member (in the case of an individual) of any
Principal; or
(2) any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or Persons beneficially holding an
80% or more controlling interest of which consist of any one or more Principals
and/or such other Persons referred to in the immediately preceding clause (1).
"REPRESENTATIVE" means the indenture trustee or other trustee,
agent or representative in respect of any Designated Senior Debt; PROVIDED that
if, and for so long as, any Designated Senior Debt lacks such a representative,
then the Representative for such Designated Senior Debt shall at all times
constitute the holders of a majority in outstanding principal amount of such
Designated Senior Debt in respect of any Designated Senior Debt.
"RESPONSIBLE OFFICER," when used with respect to the Trustee,
means any officer within the Corporate Trust Administration of the Trustee (or
any successor group of the Trustee) or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"RESTRICTED DEFINITIVE NOTE" means a Definitive Note bearing the
Private Placement Legend.
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"RESTRICTED GLOBAL NOTE" means a Global Note bearing the Private
Placement Legend.
"RESTRICTED INVESTMENT" means an Investment other than a
Permitted Investment.
"RESTRICTED SUBSIDIARY" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"RULE 144" means Rule 144 promulgated under the Securities Act.
"RULE 144A" means Rule 144A promulgated under the Securities Act.
"RULE 903" means Rule 903 promulgated under the Securities Act.
"RULE 904" means Rule 904 promulgated the Securities Act.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIZATION ENTITY" means a Wholly Owned Subsidiary of the
Company (or another Person in which the Company or any Subsidiary of the Company
makes an Investment and to which the Company or any Subsidiary of the Company
transfers accounts receivable or equipment and related assets) that engages in
no activities other than in connection with the financing of accounts receivable
or equipment and that is designated by the Board of Directors of the Company (as
provided below) as a Securitization Entity (a) no portion of the Indebtedness or
any other obligations (contingent or otherwise) of which (i) is guaranteed by
the Company or any other Restricted Subsidiary (excluding guarantees of
Obligations (other than the principal of, and interest on, Indebtedness))
pursuant to Standard Securitization Undertakings, (ii) is recourse to or
obligates the Company or any Restricted Subsidiary in any way other than
pursuant to Standard Securitization Undertakings, (b) with which neither the
Company nor any Restricted Subsidiary has any material contract, agreement,
arrangement or understanding other than on terms no less favorable to the
Company or such Restricted Subsidiary than those that might be obtained at the
time from Persons that are not Affiliates of the Company, other than fees
payable in the ordinary course of business in connection with servicing
receivables of such entity, and (c) to which neither the Company nor any
Restricted Subsidiary has any obligation to maintain or preserve such entity's
financial condition or cause such entity to achieve certain levels of operating
results. Any such designation by the Board of Directors shall be evidenced to
the Trustee by filing with the Trustee a certified copy of the resolution of the
Board of Directors giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
conditions.
"SENIOR DEBT" means:
(1) all Indebtedness of the Company, any Guarantor, or DASI
outstanding under Credit Facilities and all Hedging Obligations with respect
thereto;
(2) any other Indebtedness of the Company or any Guarantor
permitted to be incurred under the terms of this Indenture, unless the
instrument under which such Indebtedness is incurred expressly provides that it
is on a parity with or subordinated in right of payment to the Notes or any of
the Guaranties; and
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(3) all Obligations with respect to the items listed in the
preceding clauses (1) and (2).
Notwithstanding anything to the contrary in the preceding, Senior
Debt will not include:
(1) any liability for federal, state, local or other
taxes owed or owing by the Company;
(2) any Indebtedness of the Company or DASI to any of
its Subsidiaries or other Affiliates;
(3) any trade payables; or
(4) the portion of any Indebtedness that is incurred
in violation of this Indenture.
"SHELF REGISTRATION STATEMENT" means the Shelf Registration
Statement as defined in the Registration Rights Agreement.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date of this Indenture.
"STANDARD SECURITIZATION UNDERTAKINGS" means representations,
warranties, covenants and indemnities entered into by the Company or any
Subsidiary of the Company that are reasonably customary in an accounts
receivable or equipment transactions.
"STATED MATURITY" means, with respect to any installment of
interest or principal on any series of Indebtedness, the date on which such
payment of interest or principal was scheduled to be paid in the original
documentation governing such Indebtedness, and shall not include any contingent
obligations to repay, redeem or repurchase any such interest or principal prior
to the date originally scheduled for the payment thereof.
"SUBSIDIARY" means, with respect to any specified Person:
(1) any corporation, association or other business entity of
which more than 50% of the total voting power of shares of Capital Stock
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 such Person or one or more of the other
Subsidiaries of that Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or one or more Subsidiaries
of such Person (or any combination thereof).
"TOTAL ASSETS" means the total assets of the Company and its
Restricted Subsidiaries on a consolidated basis determined in accordance with
GAAP, as shown on the most recently available consolidated balance sheet of the
Company and its Restricted Subsidiaries.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect
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on the date on which this Indenture is qualified under the TIA.
"TRUSTEE" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"UNRESTRICTED DEFINITIVE NOTE" means one or more Definitive Notes
that do not bear and are not required to bear the Private Placement Legend.
"UNRESTRICTED GLOBAL NOTE" means a permanent global Note in the
form of Exhibit A attached hereto that bears the Global Note Legend and that has
the "Schedule of Exchanges of Interests in the Global Note" attached thereto,
and that is deposited with or on behalf of and registered in the name of the
Depositary, representing a series of Notes that do not bear the Private
Placement Legend.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary of the Company
(other than Dura UK Limited or any successor thereto) that is designated by the
Board of Directors as an Unrestricted Subsidiary pursuant to a Board Resolution,
but only to the extent that such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of the Company
unless the terms of any such agreement, contract, arrangement or understanding
are no less favorable to the Company or such Restricted Subsidiary than those
that might be obtained at the time from Persons who are not Affiliates of the
Company;
(3) is a Person with respect to which neither the Company nor any
of its Restricted Subsidiaries has any direct or indirect obligation (a) to
subscribe for additional Equity Interests or (b) to maintain or preserve such
Person's financial condition or to cause such Person to achieve any specified
levels of operating results; and
(4) has not guaranteed or otherwise directly or indirectly
provided credit support for any Indebtedness of the Company or any of its
Restricted Subsidiaries.
Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
preceding conditions and was permitted by Section 4.07 hereof. If, at any time,
any Unrestricted Subsidiary would fail to meet the preceding requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.09 hereof, the Company shall be in
default of such covenant. The Board of Directors of the Company may at any time
designate any Unrestricted Subsidiary to be a Restricted Subsidiary; PROVIDED
that such designation shall be deemed to be an incurrence of Indebtedness by a
Restricted Subsidiary of the Company of any outstanding Indebtedness of such
Unrestricted Subsidiary and such designation shall only be permitted if (1) such
Indebtedness is permitted under Section 4.09 hereof, calculated on a pro forma
basis as if such designation had occurred at the beginning of the four-quarter
reference period; and (2) no Default or Event of Default would be in existence
following such designation.
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"U.S. PERSON" means a U.S. person as defined in Rule 902(o) under
the Securities Act.
"VOTING STOCK" of any Person as of any date means the Capital
Stock of such Person that is at the time entitled to vote in the election of the
Board of Directors of such Person.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the
amount of each then remaining installment, sinking fund, serial maturity or
other required payments of principal, including payment at final maturity, in
respect thereof, by (b) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such payment;
by
(2) the then outstanding principal amount of such Indebtedness.
"WHOLLY OWNED RESTRICTED SUBSIDIARY" of any Person means a
Restricted Subsidiary of such Person all of the outstanding Capital Stock or
other ownership interests of which (other than directors' qualifying shares)
shall at the time be owned by such Person or by one or more Wholly Owned
Restricted Subsidiaries of such Person.
SECTION 1.02. OTHER DEFINITIONS.
<TABLE>
<CAPTION>
Defined in
Term Section
<S> <C>
"ACCELERATION NOTICE". . . . . . . . . . . . . . . . . .6.02
"AFFILIATE TRANSACTION". . . . . . . . . . . . . . . . .4.11
"ASSET SALE OFFER" . . . . . . . . . . . . . . . . . . .3.09
"AUTHENTICATION ORDER" . . . . . . . . . . . . . . . . .2.02
"CHANGE OF CONTROL OFFER". . . . . . . . . . . . . . . .4.15
"CHANGE OF CONTROL PAYMENT". . . . . . . . . . . . . . .4.15
"CHANGE OF CONTROL PAYMENT DATE" . . . . . . . . . . . .4.15
"CO-PAYING AGENT". . . . . . . . . . . . . . . . . . . .2.03
"COVENANT DEFEASANCE". . . . . . . . . . . . . . . . . .8.03
"EVENT OF DEFAULT". . . . . . . . . . . . . . . . . . .6.01
"EXCESS PROCEEDS". . . . . . . . . . . . . . . . . . . .4.10
"INCUR". . . . . . . . . . . . . . . . . . . . . . . . .4.09
"LEGAL DEFEASANCE" . . . . . . . . . . . . . . . . . . .8.02
"OFFER AMOUNT" . . . . . . . . . . . . . . . . . . . . .3.09
"OFFER PERIOD" . . . . . . . . . . . . . . . . . . . . .3.09
"PAYING AGENT" . . . . . . . . . . . . . . . . . . . . .2.03
"PAYMENT BLOCKAGE NOTICE". . . . . . . . . . . . . . . .10.03
"PAYMENT DEFAULT". . . . . . . . . . . . . . . . . . . .6.01
"PERMITTED DEBT" . . . . . . . . . . . . . . . . . . . .4.09
"PURCHASE DATE". . . . . . . . . . . . . . . . . . . . .3.09
"REGISTRAR". . . . . . . . . . . . . . . . . . . . . . .2.03
"RESTRICTED PAYMENTS". . . . . . . . . . . . . . . . . .4.07
</TABLE>
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SECTION 1.03. TRUST INDENTURE ACT DEFINITIONS.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"INDENTURE SECURITIES" means the Notes;
"INDENTURE SECURITY HOLDER" means a Holder of a Note;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee;
and
"OBLIGOR" on the Notes and the Guaranties means the Company and
the Guarantors, respectively, and any successor obligor upon the Notes and the
Guaranties, respectively.
All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule under
the TIA have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular;
(5) provisions apply to successive events and transactions;
and
(6) references to sections of or rules under the Securities
Act shall be deemed to include substitute, replacement of successor
sections or rules adopted by the SEC from time to time.
ARTICLE 2.
THE NOTES
SECTION 2.01. FORM AND DATING.
(a) GENERAL.
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The Notes and the Trustee's certificate of authentication shall
be substantially in the form of Exhibit A hereto. The Notes may have notations,
legends or endorsements required by law, stock exchange rule or usage. Each
Note shall be dated the date of its authentication. The Notes shall be in
denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes shall constitute,
and are hereby expressly made, a part of this Indenture and the Company, the
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. However,
to the extent any provision of any Note conflicts with the express provisions of
this Indenture, the provisions of this Indenture shall govern and be
controlling.
(b) GLOBAL NOTES.
Notes issued in global form shall be substantially in the form of
Exhibit A attached hereto (including the Global Note Legend thereon and the
"Schedule of Exchanges of Interests in the Global Note" attached thereto).
Notes issued in definitive form shall be substantially in the form of Exhibit A
attached hereto (but without the Global Note Legend thereon and without the
"Schedule of Exchanges of Interests in the Global Note" attached thereto). Each
Global Note shall represent such of the outstanding Notes as shall be specified
therein and each shall provide that it shall represent the aggregate principal
amount of outstanding Notes from time to time endorsed thereon and that the
aggregate principal amount of outstanding Notes represented thereby may from
time to time be reduced or increased, as appropriate, to reflect exchanges and
redemptions. Any endorsement of a Global Note to reflect the amount of any
increase or decrease in the aggregate principal amount of outstanding Notes
represented thereby shall be made by the Trustee or the Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.06 hereof.
(c) EUROCLEAR AND CEDELBANK PROCEDURES APPLICABLE. The provisions of
the "Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Cedelbank"
and "Customer Handbook" of Cedelbank shall be applicable to transfers of
beneficial interests in the Regulation S Global Notes that are held by
Participants through Euroclear or Cedelbank.
SECTION 2.02. EXECUTION AND AUTHENTICATION. Two Officers shall sign the Notes
for the Company by manual or facsimile signature. The Company's seal may be
reproduced on the Notes and may be in facsimile form
If an Officer whose signature is on a Note no longer holds that
office at the time a Note is authenticated, the Note shall nevertheless be
valid.
A Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Note has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by
two Officers (an "AUTHENTICATION ORDER"), authenticate Notes for original issue
up to the aggregate principal amount of $350.0 million, of which $300.0 million
will be issued as Initial Notes on the date hereof. The aggregate principal
amount of Notes outstanding at any time may not exceed such amount except as
provided in Section 2.07 hereof.
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The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("REGISTRAR") and an
office or agency where Notes may be presented for payment ("PAYING AGENT"). If
and as long as the Notes are listed on the Luxembourg Stock Exchange, the
Company shall maintain a Registrar and Paying Agent in Luxembourg. The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents, including the Co-Paying Agent. The term "REGISTRAR" includes any
co-registrar and the term "PAYING AGENT" includes any additional paying agent.
The Company may change any Paying Agent or Registrar without notice to any
Holder. The Company shall notify the Trustee in writing of the name and address
of any Agent not a party to this Indenture. If the Company fails to appoint or
maintain another entity as Registrar or Paying Agent, the Trustee shall act as
such. The Company or any of its Subsidiaries may act as Paying Agent or
Registrar.
The Company initially appoints The Depository Trust Company
("DTC") to act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the
principal Registrar and Paying Agent and to act as Custodian with respect to the
Global Notes and appoints The Industrial Bank of Japan (Luxembourg) S.A. to act
as co-registrar and co-paying agent in Luxembourg (the "Co-Paying Agent").
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the
Trustee or the Co-Paying Agent to agree in writing that the Paying Agent will
hold in trust for the benefit of Holders or the Trustee all money held by the
Paying Agent for the payment of principal, premium or Liquidated Damages, if
any, or interest on the Notes, and will notify the Trustee of any default by the
Company in making any such payment. While any such default continues, the
Trustee may require a Paying Agent to pay all money held by it to the Trustee.
The Company at any time may require a Paying Agent to pay all money held by it
to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other
than the Company or a Subsidiary) shall have no further liability for the money.
If the Company or a Subsidiary acts as Paying Agent, it shall segregate and hold
in a separate trust fund for the benefit of the Holders all money held by it as
Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the
Company, the Trustee shall serve as Paying Agent for the Notes.
SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in
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writing, a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of the Holders of Notes and the Company shall
otherwise comply with TIA Section 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF GLOBAL NOTES.
A Global Note may not be transferred as a whole except by the
Depositary to a nominee of the Depositary, by a nominee of the Depositary to the
Depositary or to another nominee of the Depositary, the Depositary or any such
nominee to a successor Depositary or a nominee of such successor Depositary.
All Global Notes will be exchanged by the Company for Definitive Notes if (i)
the Company delivers to the Trustee notice from the Depositary that it is
unwilling or unable to continue to act as Depositary or that it is no longer a
clearing agency registered under the Exchange Act and, in either case, a
successor Depositary is not appointed by the Company within 90 days after the
date of such notice from the Depositary or (ii) there shall have occurred and be
continuing a Default or an Event of Default. Global Notes also may be exchanged
or replaced, in whole or in part, as provided in Sections 2.07 and 2.10 hereof.
Upon the occurrence of either of the preceding events in (i) or (ii) above,
Definitive Notes shall be issued in such names as the Depositary shall instruct
the Trustee. Every Note authenticated and delivered in exchange for, or in lieu
of, a Global Note or any portion thereof, pursuant to this Section 2.06 or
Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form
of, and shall be, a Global Note. A Global Note may not be exchanged for another
Note other than as provided in this Section 2.06(a), however, beneficial
interests in a Global Note may be transferred and exchanged as provided in
Section 2.06(b),(c) or (f) hereof.
(b) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN THE GLOBAL
NOTES. The transfer and exchange of beneficial interests in the Global Notes
shall be effected through the Depositary, in accordance with the provisions of
this Indenture and the Applicable Procedures. Beneficial interests in the
Restricted Global Notes shall be subject to restrictions on transfer comparable
to those set forth herein to the extent required by the Securities Act.
Transfers of beneficial interests in the Global Notes also shall require
compliance with either subparagraph (i) or (ii) below, as applicable, as well as
one or more of the other following subparagraphs, as applicable:
(i) TRANSFER OF BENEFICIAL INTERESTS IN THE SAME GLOBAL NOTE.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in
the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend. Beneficial
interests in any Unrestricted Global Note may be transferred to Persons
who take delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note. No written orders or instructions shall be
required to be delivered to the Registrar to effect the transfers
described in this Section 2.06(b)(i).
(ii) ALL OTHER TRANSFERS AND EXCHANGES OF BENEFICIAL INTERESTS
IN GLOBAL NOTES. In connection with all transfers and exchanges of
beneficial interests that are not subject to Section 2.06(b)(i) above,
the transferor of such beneficial interest must deliver to the Registrar
either (A) (1) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the Applicable
Procedures directing the Depositary to credit or cause to be credited a
beneficial interest in the Global Note in an amount equal to the
beneficial interest to be transferred or exchanged and (2) instructions
given in accordance with the Applicable Procedures containing information
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regarding the Participant account to be credited with such increase or
(B) (1) a written order from a Participant or an Indirect Participant
given to the Depositary in accordance with the Applicable Procedures
directing the Depositary to cause to be issued a Definitive Note in an
amount equal to the beneficial interest to be transferred or exchanged
and (2) instructions given by the Depositary to the Registrar containing
information regarding the Person in whose name such Definitive Note shall
be registered to effect the transfer or exchange referred to in (1)
above. Upon consummation of an Exchange Offer by the Company in
accordance with Section 2.06(f) hereof, the requirements of this Section
2.06(b)(ii) shall be deemed to have been satisfied upon receipt by the
Registrar of the instructions contained in the Letter of Transmittal
delivered by the Holder of such beneficial interests in the Restricted
Global Notes. Upon satisfaction of all of the requirements for transfer
or exchange of beneficial interests in Global Notes contained in this
Indenture and the Notes or otherwise applicable under the Securities Act,
the Trustee shall adjust the principal amount of the relevant Global
Note(s) pursuant to Section 2.06(h) hereof.
(iii) TRANSFER OF BENEFICIAL INTERESTS TO ANOTHER RESTRICTED
GLOBAL NOTE. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(ii) above and the
Registrar receives the following:
(A) if the transferee will take delivery in the form of
a beneficial interest in the 144A Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (1) thereof; and
(B) if the transferee will take delivery in the form of
a beneficial interest in the Regulation S Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (2) thereof.
(iv) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR BENEFICIAL INTERESTS IN THE UNRESTRICTED
GLOBAL NOTE. A beneficial interest in any Restricted Global Note may be
exchanged by any holder thereof for a beneficial interest in an
Unrestricted Global Note or transferred to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Note if the exchange or transfer complies with the requirements of
Section 2.06(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the holder of the beneficial interest to be
transferred, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a
Person who is an affiliate (as defined in Rule 144) of the
Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
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(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest for
a beneficial interest in an Unrestricted Global Note, a certificate from
such holder in the form of Exhibit C hereto, including the certifications
in item (1)(a) thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial interest to a
Person who shall take delivery thereof in the form of a beneficial
interest in an Unrestricted Global Note, a certificate from such holder
in the form of Exhibit B hereto, including the certifications in item (4)
thereof;
and, in each such case set forth in this
subparagraph (D), if the Registrar so requests or if the Applicable
Procedures so require, an Opinion of Counsel in form reasonably
acceptable to the Registrar to the effect that such exchange or transfer
is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or
(D) above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the form
of, a beneficial interest in a Restricted Global Note.
(c) TRANSFER OR EXCHANGE OF BENEFICIAL INTERESTS FOR
DEFINITIVE NOTES.
(i) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES TO
RESTRICTED DEFINITIVE NOTES. If any holder of a beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest for
a Restricted Definitive Note or to transfer such beneficial interest to a
Person who takes delivery thereof in the form of a Restricted Definitive
Note, then, upon receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Restricted Definitive Note, a certificate from
such holder in the form of Exhibit C hereto, including the
certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to
a QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to
a Non-U.S. Person in an offshore transaction in accordance with
Rule 903 or Rule 904 under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including the
certifications
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in item (2) thereof;
(D) if such beneficial interest is being transferred
pursuant to an exemption from the registration requirements of
the Securities Act in accordance with Rule 144 under the
Securities Act, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to
an Institutional Accredited Investor in reliance on an exemption
from the registration requirements of the Securities Act other
than those listed in subparagraphs (B) through (D) above, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications, certificates and Opinion of Counsel
required by item (3) thereof, if applicable;
(F) if such beneficial interest is being transferred to
the Company or any of its Subsidiaries, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof; or
(G) if such beneficial interest is being transferred
pursuant to an effective registration statement under the
Securities Act, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal
amount of the applicable Global Note to be reduced accordingly pursuant
to Section 2.06(h) hereof, and the Company shall execute and the Trustee
shall authenticate and deliver to the Person designated in the
instructions a Definitive Note in the appropriate principal amount. Any
Definitive Note issued in exchange for a beneficial interest in a
Restricted Global Note pursuant to this Section 2.06(c) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct
the Registrar through instructions from the Depositary and the
Participant or Indirect Participant. The Trustee shall deliver such
Definitive Notes to the Persons in whose names such Notes are so
registered. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 2.06(c)(i)
shall bear the Private Placement Legend and shall be subject to all
restrictions on transfer contained therein.
(ii) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES TO
UNRESTRICTED DEFINITIVE NOTES. A holder of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an
Unrestricted Definitive Note or may transfer such beneficial interest to
a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note only if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the holder of such beneficial interest, in the case
of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not
(1) a broker-dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an
affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in
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accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Definitive Note that does not bear the Private
Placement Legend, a certificate from such holder in the form of
Exhibit C hereto, including the certifications in item (1)(b)
thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form
of a Definitive Note that does not bear the Private Placement
Legend, a certificate from such holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this
subparagraph (D), if the Registrar so requests or if the Applicable
Procedures so require, an Opinion of Counsel in form reasonably
acceptable to the Registrar to the effect that such exchange or transfer
is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the Securities Act.
(iii) BENEFICIAL INTERESTS IN UNRESTRICTED GLOBAL NOTES TO
UNRESTRICTED DEFINITIVE NOTES. If any holder of a beneficial interest in
an Unrestricted Global Note proposes to exchange such beneficial interest
for a Definitive Note or to transfer such beneficial interest to a Person
who takes delivery thereof in the form of a Definitive Note, then, upon
satisfaction of the conditions set forth in Section 2.06(b)(ii) hereof,
the Trustee shall cause the aggregate principal amount of the applicable
Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof,
and the Company shall execute and the Trustee shall authenticate and
deliver to the Person designated in the instructions a Definitive Note in
the appropriate principal amount. Any Definitive Note issued in exchange
for a beneficial interest pursuant to this Section 2.06(c)(iii) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct
the Registrar through instructions from the Depositary and the
Participant or Indirect Participant. The Trustee shall deliver such
Definitive Notes to the Persons in whose names such Notes are so
registered. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.06(c)(iii) shall not bear the Private
Placement Legend.
(d) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR BENEFICIAL
INTERESTS.
(i) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES. If any Holder of a Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a Restricted
Global Note or to transfer such Restricted Definitive Notes to a Person
who takes delivery thereof in the form of a beneficial interest in a
Restricted Global Note, then, upon receipt by the Registrar of the
following documentation:
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(A) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note, a certificate from such Holder in the
form of Exhibit C hereto, including the certifications in item
(2)(b) thereof;
(B) if such Restricted Definitive Note is being
transferred to a QIB in accordance with Rule 144A under the
Securities Act, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being
transferred to a Non-U.S. Person in an offshore transaction in
accordance with Rule 903 or Rule 904 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being
transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule 144
under the Securities Act, a certificate to the effect set forth
in Exhibit B hereto, including the certifications in item (3)(a)
thereof;
(E) if such Restricted Definitive Note is being
transferred to an Institutional Accredited Investor in reliance
on an exemption from the registration requirements of the
Securities Act other than those listed in subparagraphs (B)
through (D) above, a certificate to the effect set forth in
Exhibit B hereto, including the certifications, certificates and
Opinion of Counsel required by item (3) thereof, if applicable;
(F) if such Restricted Definitive Note is being
transferred to the Company or any of its Subsidiaries, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof; or
(G) if such Restricted Definitive Note is being
transferred pursuant to an effective registration statement under
the Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(c)
thereof,
the Trustee shall cancel the Restricted Definitive Note,
increase or cause to be increased the aggregate principal amount of, in
the case of clause (A) above, the appropriate Restricted Global Note, in
the case of clause (B) above, the 144A Global Note, in the case of clause
(C) above, the Regulation S Global Note, and in all other cases, the IAI
Global Note.
(ii) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN
UNRESTRICTED GLOBAL NOTES. A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global
Note or transfer such Restricted Definitive Note to a Person who takes
delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note only if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of
the Exchange Notes or (3) a Person who is an affiliate (as
defined in
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Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Notes proposes to
exchange such Notes for a beneficial interest in the Unrestricted Global
Note, a certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (1)(c) thereof; or
(2) if the Holder of such Definitive Notes proposes to
transfer such Notes to a Person who shall take delivery thereof in the
form of a beneficial interest in the Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit B hereto, including
the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph
(D), if the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable to the
Registrar to the effect that such exchange or transfer is in compliance
with the Securities Act and that the restrictions on transfer contained
herein and in the Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the
subparagraphs in this Section 2.06(d)(ii), the Trustee shall cancel the
Definitive Notes and increase or cause to be increased the aggregate
principal amount of the Unrestricted Global Note.
(iii) UNRESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN
UNRESTRICTED GLOBAL NOTES. A Holder of an Unrestricted Definitive Note
may exchange such Note for a beneficial interest in an Unrestricted
Global Note or transfer such Definitive Notes to a Person who takes
delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note at any time. Upon receipt of a request for such an exchange
or transfer, the Trustee shall cancel the applicable Unrestricted
Definitive Note and increase or cause to be increased the aggregate
principal amount of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or
(iii) above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of Definitive Notes so transferred.
(e) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR DEFINITIVE NOTES.
Upon request by a Holder of Definitive Notes and such Holder's compliance
with the provisions of this Section 2.06(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to
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such registration of transfer or exchange, the requesting Holder shall present
or surrender to the Registrar the Definitive Notes duly endorsed or accompanied
by a written instruction of transfer in form satisfactory to the Registrar duly
executed by such Holder or by his attorney, duly authorized in writing. In
addition, the requesting Holder shall provide any additional certifications,
documents and information, as applicable, required pursuant to the following
provisions of this Section 2.06(e).
(i) RESTRICTED DEFINITIVE NOTES TO RESTRICTED DEFINITIVE
NOTES. Any Restricted Definitive Note may be transferred to and
registered in the name of Persons who take delivery thereof in the form
of a Restricted Definitive Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A
under the Securities Act, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or
Rule 904, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications in item
(2) thereof; and
(C) if the transfer will be made pursuant to any other
exemption from the registration requirements of the Securities
Act, then the transferor must deliver a certificate in the form
of Exhibit B hereto, including the certifications, certificates
and Opinion of Counsel required by item (3) thereof, if
applicable.
(ii) RESTRICTED DEFINITIVE NOTES TO UNRESTRICTED DEFINITIVE
NOTES. Any Restricted Definitive Note may be exchanged by the Holder
thereof for an Unrestricted Definitive Note or transferred to a Person or
Persons who take delivery thereof in the form of an Unrestricted
Definitive Note if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of
the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive Notes
proposes to exchange such Notes for an Unrestricted Definitive Note, a
certificate from such Holder in the form of Exhibit C hereto, including
the certifications in item (1)(d) thereof; or
(2) if the Holder of such Restricted Definitive Notes
proposes to transfer
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such Notes to a Person who shall take delivery thereof in the form of an
Unrestricted Definitive Note, a certificate from such Holder in the form
of Exhibit B hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this
subparagraph (D), if the Registrar so requests, an Opinion of Counsel in
form reasonably acceptable to the Company to the effect that such
exchange or transfer is in compliance with the Securities Act and that
the restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain compliance
with the Securities Act.
(iii) UNRESTRICTED DEFINITIVE NOTES TO UNRESTRICTED DEFINITIVE
NOTES. A Holder of Unrestricted Definitive Notes may transfer such Notes
to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note. Upon receipt of a request to register such a transfer,
the Registrar shall register the Unrestricted Definitive Notes pursuant
to the instructions from the Holder thereof.
(f) EXCHANGE OFFER.
Upon the occurrence of the Exchange Offer in accordance with the
Registration Rights Agreement, the Company shall issue and, upon receipt of an
Authentication Order in accordance with Section 2.02, the Trustee shall
authenticate (i) one or more Unrestricted Global Notes in an aggregate principal
amount equal to the principal amount of the beneficial interests in the
Restricted Global Notes tendered for acceptance by Persons that certify in the
applicable Letters of Transmittal that (x) they are not broker-dealers, (y) they
are not participating in a distribution of the Exchange Notes and (z) they are
not affiliates (as defined in Rule 144) of the Company, and accepted for
exchange in the Exchange Offer and (ii) Definitive Notes in an aggregate
principal amount equal to the principal amount of the Restricted Definitive
Notes accepted for exchange in the Exchange Offer. Concurrently with the
issuance of such Notes, the Trustee shall cause the aggregate principal amount
of the applicable Restricted Global Notes to be reduced accordingly, and the
Company shall execute and the Trustee shall authenticate and deliver to the
Persons designated by the Holders of Definitive Notes so accepted Definitive
Notes in the appropriate principal amount.
(g) LEGENDS. The following legends shall appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each
Global Note and each Definitive Note (and all Notes issued in
exchange therefor or substitution thereof) shall bear the legend
in substantially the following form:
THE NOTE (OR ITS PREDECESSORS) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, AND THE NOTE EVIDENCED
HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE NOTE
EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
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MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER OR ANOTHER EXEMPTION UNDER THE
SECURITIES ACT. THE HOLDER OF THE NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT
OF THE COMPANY THAT (A) SUCH NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY (I) (A) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT), PURCHASING FOR ITS OWN ACCOUNT IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A UNDER THE SECURITIES ACT, (B) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 OF THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES TO
A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT OR (D) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT PROVIDED THAT
IN THE CASE OF A TRANSFER PURSUANT TO CLAUSE (D) SUCH TRANSFER IS EFFECTED BY
THE DELIVERY TO THE TRANSFEREE OF DEFINITIVE SECURITIES REGISTERED IN ITS NAME
(OR ITS NOMINEES NAME) IN THE BOOKS MAINTAINED BY THE REGISTRAR, AND IS SUBJECT
TO THE RECEIPT BY THE REGISTRAR (AND THE COMPANY, IF THEY SO REQUEST) OF A
CERTIFICATION OF THE TRANSFEROR AND AN OPINION OF COUNSEL TO THE EFFECT THAT
SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (II) TO THE COMPANY OR
(III) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE
HOLDER WILL, ANDEACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM
IT OF THE NOTE EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE.
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(iv),
(c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to
this Section 2.06 (and all Notes issued in exchange therefor or
substitution thereof) shall not bear the Private Placement
Legend.
(ii) GLOBAL NOTE LEGEND. Each Global Note shall bear a legend
in substantially the following form:
"This Global Note is held by the Depositary (as defined
in the Indenture governing this Note) or its nominee in custody for the
benefit of the beneficial owners hereof, and is not transferable to any
person under any circumstances except that (i) the Trustee may make such
notations hereon as may be required pursuant to section 2.07 of this
Indenture, (ii) this Global Note may be exchanged in whole but not in
part pursuant to section 2.06(a) of this Indenture, (iii) this Global
Note may be delivered to the Trustee for cancellation pursuant to section
2.11 of this Indenture, and (iv) this Global Note may be transferred to a
successor depositary with the prior written consent of the Company."
(h) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTES.
At such time as all beneficial interests in a particular Global
Note have been exchanged for Definitive Notes or a particular Global Note has
been redeemed, repurchased or canceled in whole
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and not in part, each such Global Note shall be returned to or retained and
canceled by the Trustee in accordance with Section 2.11 hereof. At any time
prior to such cancellation, if any beneficial interest in a Global Note is
exchanged for or transferred to a Person who will take delivery thereof in the
form of a beneficial interest in another Global Note or for Definitive Notes,
the principal amount of Notes represented by such Global Note shall be reduced
accordingly and an endorsement shall be made on such Global Note by the Trustee
or by the Depositary at the direction of the Trustee to reflect such reduction;
and if the beneficial interest is being exchanged for or transferred to a Person
who will take delivery thereof in the form of a beneficial interest in another
Global Note, such other Global Note shall be increased accordingly and an
endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
(i) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes upon the Company's order or at the Registrar's request.
(ii) No service charge shall be made to a holder of a
beneficial interest in a Global Note or to a Holder of a Definitive Note
for any registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any such
transfer taxes or similar governmental charge payable upon exchange or
transfer pursuant to Sections 2.10, 3.06, 3.09, 4.10, 4.15 and 9.05
hereof).
(iii) The Registrar shall not be required to register the
transfer of or exchange any Note selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes
shall be the valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Global
Notes or Definitive Notes surrendered upon such registration of transfer
or exchange.
(v) The Company shall not be required (A) to issue, to
register the transfer of or to exchange any Notes during a period
beginning at the opening of business 15 days before the day of any
selection of Notes for redemption under Section 3.02 hereof and ending at
the close of business on the day of selection, (B) to register the
transfer of or to exchange any Note so selected for redemption in whole
or in part, except the unredeemed portion of any Note being redeemed in
part or (c) to register the transfer of or to exchange a Note between a
record date and the next succeeding Interest Payment Date.
(vi) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the Company may deem and
treat the Person in whose name any Note is registered as the absolute
owner of such Note for the purpose of receiving payment of principal of
and interest on such Notes and for all other purposes, and none of the
Trustee, any Agent or the Company shall be affected by notice to the
contrary.
(vii) The Trustee shall authenticate Global Notes and
Definitive Notes in accordance with the
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provisions of Section 2.02 hereof.
(viii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06
to effect a registration of transfer or exchange may be submitted by
facsimile.
SECTION 2.07. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee or the
Company and the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Note, the Company shall issue and the Trustee,
upon receipt of an Authentication Order, shall authenticate a replacement Note
if the Trustee's requirements are met. If required by the Trustee or the
Company, an indemnity bond must be supplied by the Holder that is sufficient in
the judgment of the Trustee and the Company to protect the Company, the Trustee,
any Agent and any authenticating agent from any loss that any of them may suffer
if a Note is replaced. The Company may charge for its expenses in replacing a
Note.
Every replacement Note issued pursuant to this Section 2.07 is an
additional obligation of the Company and shall be entitled to all of the
benefits of this Indenture equally and proportionately with all other Notes duly
issued hereunder.
SECTION 2.08. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated
by the Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as set forth in Section 2.09 hereof, a Note
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note; however, Notes held by the Company or a Subsidiary of
the Company shall not be deemed to be outstanding for purposes of Section
3.07(b) hereof.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases
to be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under
Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to
accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Company, or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company, shall
be considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes that the Trustee knows
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are so owned shall be so disregarded.
SECTION 2.10. TEMPORARY NOTES.
Until certificates representing Notes are ready for delivery, the
Company may prepare and the Trustee, upon receipt of an Authentication Order,
shall authenticate temporary Notes. Temporary Notes shall be substantially in
the form of certificated Notes but may have variations that the Company
considers appropriate for temporary Notes and as shall be reasonably acceptable
to the Trustee. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate definitive Notes in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the
benefits of this Indenture.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment.
The Trustee and no one else shall cancel all Notes surrendered for registration
of transfer, exchange, payment, replacement or cancellation and shall destroy
canceled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all canceled Notes shall be delivered
to the Company. Subject to Section 2.07, the Company may not issue new Notes to
replace Notes that it has paid or that have been delivered to the Trustee for
cancellation.
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes, it
shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Notes and in Section 4.01 hereof. The Company shall notify the Trustee
in writing of the amount of defaulted interest proposed to be paid on each Note
and the date of the proposed payment. The Company shall fix or cause to be
fixed each such special record date and payment date, PROVIDED that no such
special record date shall be less than 10 days prior to the related payment date
for such defaulted interest. At least 15 days before the special record date,
the Company (or, upon the written request of the Company, the Trustee in the
name and at the expense of the Company) shall mail or cause to be mailed to
Holders a notice that states the special record date, the related payment date
and the amount of such interest to be paid.
SECTION 2.13. CUSIP NUMBERS.
The Company in issuing the Notes may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use CUSIP numbers in notices of
redemption as a convenience to Holders; PROVIDED that any such notice may state
that no representation is made as to the correctness of such numbers either as
printed on the Notes or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Notes, and any such redemption shall not be affected by any defect in or the
omission of such numbers. The Company will promptly notify the Trustee of any
change in the CUSIP numbers.
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ARTICLE 3.
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 30 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the clause of this Indenture or the
Notes pursuant to which the redemption shall occur, (ii) the redemption date,
(iii) the principal amount of Notes to be redeemed and (iv) the redemption
price.
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed at any time, the
Trustee shall select Notes for redemption as follows:
(a) if the Notes are listed, in compliance with the requirements of
the principal national securities exchange on which the Notes are listed; or
(b) if the Notes are not so listed, on a pro rata basis, by lot or by
such method as the Trustee shall deem fair and appropriate.
In the event of partial redemption by lot, the particular Notes
to be redeemed shall be selected, unless otherwise provided herein, not less
than 30 nor more than 60 days prior to the redemption date by the Trustee from
the outstanding Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the
Notes selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
Section 3.03. NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.09 hereof, at least
30 days but not more than 60 days before a redemption date, the Company shall
mail or cause to be mailed, by first class mail, a notice of redemption to each
Holder whose Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed and shall
state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part only, the portion of the
principal amount of such Note to be redeemed and that, after the redemption date
upon surrender of such Note, a new Note or
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Notes in principal amount equal to the unredeemed portion shall be issued upon
cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and after
the redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; PROVIDED, HOWEVER, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
For so long as the Notes are listed on the Luxembourg Stock
Exchange and the rules of such exchange so require, the Company will cause a
notice of redemption of the Notes to be published in a daily newspaper with
general circulation in Luxembourg (which is expected to be the LUXEMBOURG WORT).
Notices of redemption may not be conditional.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section
3.03 hereof, Notes called for redemption become irrevocably due and payable on
the redemption date at the redemption price. A notice of redemption may not be
conditional.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
On or before the redemption date, the Company shall deposit with
the Trustee or with the Paying Agent money sufficient to pay the redemption
price of and accrued interest on all Notes to be redeemed on that date. The
Trustee or the Paying Agent shall promptly return to the Company any money
deposited with the Trustee or the Paying Agent by the Company in excess of the
amounts necessary to pay the redemption price of, and accrued interest on, all
Notes to be redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption. If a Note is redeemed
on or after an interest record date but on or prior to the related interest
payment date, then any accrued and unpaid interest shall be paid to the Person
in whose name such Note was registered at the close of business on such record
date. If any Note called for redemption shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the
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preceding paragraph, interest shall be paid on the unpaid principal, from the
redemption date until such principal is paid, and to the extent lawful on any
interest not paid on such unpaid principal, in each case at the rate provided in
the Notes and in Section 4.01 hereof.
SECTION 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company
shall issue and, upon the Company's written request, the Trustee shall
authenticate for the Holder at the expense of the Company a new Note equal in
principal amount to the unredeemed portion of the Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
(a) At any time prior to May 1, 2002, the Company may redeem up to
35% of the aggregate principal amount of Notes issued under this Indenture
(calculated after giving effect to any issuance of Additional Notes) at a
redemption price of 101% of the principal amount thereof, plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the redemption date,
with the net cash proceeds of one or more Equity Offerings; PROVIDED that:
(i) at least 65% of the aggregate principal amount of Notes
issued under this Indenture remains outstanding immediately after the
occurrence of such redemption (excluding Notes held by DASI, the Company
and their respective Subsidiaries); and
(ii) the redemptions must occur within 90 days of the date of
the closing of any such Equity Offering.
(b) Except pursuant to the preceding paragraph, the Notes will not be
redeemable at the Company's option prior to May 1, 2004.
After May 1, 2004, the Company may redeem all or a part of the Notes upon
not less than 30 nor more than 60 days' notice, at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the applicable
redemption date, if redeemed during the twelve-month period beginning on May 1
of the years indicated below:
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<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2004............................ 104.50%
2005............................ 103.00%
2006............................ 101.50%
2007 and thereafter............. 100.00%
</TABLE>
(c) Any redemption pursuant to this Section 3.07 shall be
made pursuant to the provisions of Section 3.01 through 3.06 hereof.
SECTION 3.08. MANDATORY REDEMPTION.
The Company shall not be required to make mandatory redemption or
sinking fund payments with respect to the Notes.
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
In the event that, pursuant to Section 4.10 hereof, the Company
shall be required to commence an offer to all Holders to purchase Notes (an
"ASSET SALE OFFER"), it shall follow the procedures specified below.
The Asset Sale Offer shall remain open for a period of 20
Business Days following its commencement and no longer, except to the extent
that a longer period is required by applicable law (the "OFFER PERIOD"). No
later than five Business Days after the termination of the Offer Period (the
"PURCHASE DATE"), the Company shall purchase the principal amount of Notes
required to be purchased pursuant to Section 4.10 hereof (the "OFFER AMOUNT")
or, if less than the Offer Amount has been tendered, all Notes tendered in
response to the Asset Sale Offer. Payment for any Notes so purchased shall be
made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date and
on or before the related interest payment date, any accrued and unpaid interest
shall be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company shall
send, by first class mail, a notice to the Trustee and each of the Holders, with
a copy to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Asset Sale
Offer. The Asset Sale Offer shall be made to all Holders. The notice, which
shall govern the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this Section
3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer shall
remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall continue
to accrue interest;
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(d) that, unless the Company defaults in making such payment, any
Note accepted for payment pursuant to the Asset Sale Offer shall cease to accrue
interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to an
Asset Sale Offer may only elect to have all of such Note purchased and may not
elect to have only a portion of such Note purchased;
(f) that Holders electing to have a Note purchased pursuant to any
Asset Sale Offer shall be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note completed, or
transfer by book-entry transfer, to the Company, a depositary, if appointed by
the Company, or a Paying Agent at the address specified in the notice at least
three days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election if the
Company, the Depositary or the Paying Agent, as the case may be, receives, not
later than the expiration of the Offer Period, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Note the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Note purchased;
(h) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Offer Amount, the Company shall select the Notes to be
purchased on a PRO RATA basis (with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of $1,000, or
integral multiples thereof, shall be purchased); and
(i) that Holders whose Notes were purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased portion of the
Notes surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Company shall, to the extent
lawful, accept for payment, on a PRO RATA basis to the extent necessary, the
Offer Amount of Notes or portions thereof tendered pursuant to the Asset Sale
Offer, or if less than the Offer Amount has been tendered, all Notes tendered,
and shall deliver to the Trustee an Officers' Certificate stating that such
Notes or portions thereof were accepted for payment by the Company in accordance
with the terms of this Section 3.09. The Company, the Depositary or the Paying
Agent, as the case may be, shall promptly (but in any case not later than five
days after the Purchase Date) mail or deliver to each tendering Holder an amount
equal to the purchase price of the Notes tendered by such Holder and accepted by
the Company for purchase, and the Company shall promptly issue a new Note, and
the Trustee, upon written request from the Company shall authenticate and mail
or deliver such new Note to such Holder, in a principal amount equal to any
unpurchased portion of the Note surrendered. Any Note not so accepted shall be
promptly mailed or delivered by the Company to the Holder thereof. The Company
shall publicly announce the results of the Asset Sale Offer on the Purchase
Date.
Other than as specifically provided in this Section 3.09, any
purchase pursuant to this Section 3.09 shall be made pursuant to the provisions
of Sections 3.01 through 3.06 hereof.
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ARTICLE 4.
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
The Company or a Guarantor shall pay or cause to be paid the
principal of, premium, if any, and interest and Liquidated Damages, if any, on
the Notes on the dates and in the manner provided in the Notes. Principal,
premium, if any, and interest and Liquidated Damages, if any, shall be
considered paid on the date due if the Paying Agent, if other than the Company
or a Subsidiary thereof, holds as of 10:00 a.m. Eastern Time on the due date
money deposited by the Company in immediately available funds and designated for
and sufficient to pay all principal, premium, if any, and interest and
Liquidated Damages, if any, then due. The Company shall pay all Liquidated
Damages, if any, in the same manner on the dates and in the amounts set forth in
the Registration Rights Agreement.
The Company or a Guarantor shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal at the rate equal to 1% per annum in excess of the then applicable
interest rate on the Notes to the extent lawful; it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest and Liquidated Damages (without regard to any
applicable grace period) at the same rate to the extent lawful.
Section 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the City
of New York, and, if and as long as the Notes are listed on the Luxembourg Stock
Exchange, in Luxembourg, an office or agency (which may be an office of the
Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes
may be surrendered for registration of transfer or for exchange and where
notices and demands to or upon the Company in respect of the Notes and this
Indenture may be served. The Company shall give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more
other offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
PROVIDED, HOWEVER, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, the City of New York, and for so long as the Notes are
listed on the Luxembourg Stock Exchange, in Luxembourg for such purposes. The
Company shall give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.03 and, if and as long as the Notes are listed on the Luxembourg Stock
Exchange, the Company also hereby designates The Industrial Bank of Japan
(Luxembourg) S.A. as another such office or agency in accordance with Section
2.03 and the rules of the Luxembourg Stock Exchange.
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SECTION 4.03. REPORTS.
Whether or not required by the SEC, so long as any Notes are
outstanding, the Company shall furnish to the Holders of Notes, within five days
of filing such reports with the SEC:
(i) all quarterly and annual financial information that would
be required to be contained in a filing with the SEC on Forms 10-Q and
10-K if the Company were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and Results
of Operations" and, with respect to the annual information only, a report
on the annual financial statements by the Company's certified independent
accountants; and
(ii) all current reports that would be required to be filed
with the SEC on Form 8-K if the Company were required to file such
reports.
If the Company has designated any of its Subsidiaries as
Unrestricted Subsidiaries, then the quarterly and annual financial information
required by the preceding paragraph shall include a reasonably detailed
presentation, either on the face of the financial statements or in the footnotes
thereto, and in Management's Discussion and Analysis of Financial Condition and
Results of Operations, of the financial condition and results of operations of
the Company and its Restricted Subsidiaries separate from the financial
condition and results of operations of the Unrestricted Subsidiaries of the
Company.
In addition, following consummation of the Exchange Offer,
whether or not required by the SEC, the Company shall file a copy of all of the
information and reports referred to in clauses (i) and (ii) above with the SEC
for public availability within the time periods specified in the SEC's rules and
regulations (unless the SEC will not accept such a filing) and make such
information available to securities analysts and prospective investors upon
request. Moreover, the Company agrees, and any Guarantor shall agree, that, for
so long as any Notes remain outstanding, it shall furnish to the Holders and to
securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act. Reports and other filings made by DASI that include all of the
information referred to in clauses (i) and (ii) above with respect to DASI and
its consolidated subsidiaries shall be deemed to satisfy the obligations of the
Company and/or the Guarantors set forth above as long as such reports and
filings include the information required by the staff of the SEC under its
interpretations of SAB 53; provided that DASI does not have any business
operations other than those conducted through the Company.
SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Company and each Guarantor (to the extent that such Guarantor
is so required under the TIA) shall deliver to the Trustee, within 90 days after
the end of each fiscal year, an Officers' Certificate stating that a review of
the activities of the Company and its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge the Company
has kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action the Company
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is taking or proposes to take with respect thereto) and that to the best of his
or her knowledge no event has occurred and remains in existence by reason of
which payments on account of the principal of or interest, if any, on the Notes
is prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto. For
purposes this paragraph, such compliance shall be determined without regard to
any period of grace or requirement of notice under this Indenture.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(i) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.
SECTION 4.05. TAXES.
The Company shall pay, and shall cause each of its Subsidiaries
to pay, prior to delinquency, all material taxes, assessments, and governmental
levies except such as are contested in good faith and by appropriate proceedings
or where the failure to effect such payment is not adverse in any material
respect to the Holders of the Notes.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
The Company and each of the Guarantors covenants (to the extent
that it may lawfully do so) that it shall not at any time insist upon, plead, or
in any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in force,
that may affect the covenants or the performance of this Indenture; and the
Company and each of the Guarantors (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and covenants
that it shall not, by resort to any such law, hinder, delay or impede the
execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law has been enacted.
SECTION 4.07. RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly:
(i) declare or pay any dividend or make any other payment or
distribution on account of the Company's or any of its Restricted
Subsidiaries' Equity Interests (including, without limitation, any
payment in connection with any merger or consolidation involving the
Company or any of its
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Restricted Subsidiaries) or to the direct or indirect holders of the
Company's or any of its Restricted Subsidiaries' Equity Interests in
their capacity as such (other than dividends or distributions payable in
Equity Interests (other than Disqualified Stock) of the Company or to the
Company or a Restricted Subsidiary of the Company);
(ii) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or
consolidation involving the Company) any Equity Interests of the Company
or any direct or indirect parent of the Company;
(iii) make any payment on or with respect to, or purchase,
redeem, defease or otherwise acquire or retire for value any Indebtedness
that is subordinated to the Notes or the Guaranties, except a payment of
interest or principal at the Stated Maturity thereof; or
(iv) make any Restricted Investment (all such payments and
other actions set forth in clauses (i) through (iv) above being
collectively referred to as "Restricted Payments"),
unless, at the time of and after giving effect to such Restricted
Payment:
(i) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(ii) the Company would, at the time of such Restricted Payment
and after giving pro forma effect thereto as if such Restricted Payment
had been made at the beginning of the applicable four-quarter period,
have been permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in the first
paragraph of Section 4.09 hereof; and
(iii) such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by the Company and its
Restricted Subsidiaries after the date of this Indenture (excluding
Restricted Payments permitted by clauses (ii), (iii) and (iv) of the next
succeeding paragraph), is less than the sum, without duplication, of
(A) 50% of the Consolidated Net Income of the Company
for the period (taken as one accounting period) from March 31,
1999 to the end of the Company's most recently ended fiscal
quarter for which internal financial statements are available at
the time of such Restricted Payment (or, if such Consolidated Net
Income for such period is a deficit, less 100% of such deficit),
PLUS
(B) 100% of the aggregate net cash proceeds or fair
market value of Productive Assets received by the Company since
the date of this Indenture as a contribution to its common equity
capital or from the issue or sale of Equity Interests of the
Company (other than Disqualified Stock) or from the issue or sale
of convertible or exchangeable Disqualified Stock or convertible
or exchangeable debt securities of the Company that have been
converted into or exchanged for such Equity Interests (other than
Equity Interests (or Disqualified Stock or debt securities) sold
to a Subsidiary of the Company), PLUS
(C) to the extent that any Restricted Investment that
was made after the date of this Indenture is sold for cash or
otherwise liquidated or repaid for cash, the lesser
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of (i) the cash return of capital with respect to such Restricted
Investment (less the cost of disposition, if any) and (ii) the
initial amount of such Restricted Investment, PLUS
(D) without duplication of any amounts included in
clause (b) above, 100% of the aggregate Net Cash Proceeds or the
fair market value of Productive Assets received by the Company as
common equity contributions by a holder of the Equity Interests
of the Company (excluding any net cash proceeds from an equity
contribution which has been financed, directly or indirectly
using funds (1) borrowed from the Company or any of its
Subsidiaries, unless and until and to the extent such borrowing
is repaid or (2) contributed, extended, guaranteed or advanced by
the Company or by any of its Subsidiaries); PLUS
(E) any dividends paid in cash or Productive Assets
received by the Company or a Restricted Subsidiary of the Company
after the date of this Indenture from any Unrestricted Subsidiary
to the extent that such dividends were not otherwise included in
Consolidated Net Income; PLUS
(F) to the extent that any Unrestricted Subsidiary is
redesignated as a Restricted Subsidiary after the date of this
Indenture, the fair market value of the Company's Investment in
such Subsidiary (which consists of cash or Productive Assets) as
of the date of such redesignation.
So long as no Default has occurred and is continuing or would be caused thereby,
the preceding provisions shall not prohibit:
(i) the payment of any dividend within 60 days after the date
of declaration thereof, if at said date of declaration such payment would
have complied with the provisions of this Indenture;
(ii) the redemption, repurchase, retirement, defeasance or
other acquisition of any subordinated Indebtedness of DASI, the Company
or any Guarantor or of any Equity Interests of DASI, the Company or any
Restricted Subsidiary in exchange for, or out of the net cash proceeds of
the substantially concurrent sale (other than to a Subsidiary of the
Company) of, Equity Interests of the Company (other than Disqualified
Stock); PROVIDED that the amount of any such net cash proceeds that are
utilized for any such redemption, repurchase, retirement, defeasance or
other acquisition shall be excluded from clause (iii) (B) of the
preceding paragraph;
(iii) the defeasance, redemption, repurchase or other
acquisition of subordinated Indebtedness of the Company or any Guarantor
with the net cash proceeds from an incurrence of Permitted Refinancing
Indebtedness;
(iv) the payment of any dividend by a Restricted Subsidiary of
the Company to the holders of its Equity Interests on a pro rata basis;
(v) the repurchase, redemption or other acquisition or
retirement for value of any Equity Interests of DASI, the Company or any
Restricted Subsidiary of the Company held by any employee, officer or
director (in each case either current or former) of the Company (or any
of its Restricted Subsidiaries) pursuant to any management equity
subscription agreement or stock plan; provided that
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the aggregate price paid for all such repurchased, redeemed, acquired or
retired Equity Interests shall not exceed $5.0 million in any
twelve-month period;
(vi) cash dividends or loans from the Company to DASI for the
purpose of permitting DASI to pay its ordinary operating expenses
(including, without limitation, directors' fees, indemnification
obligations, professional fees and expenses, etc.) in an aggregate amount
not to exceed $5.0 million in any twelve-month period;
(vii) payments to DASI not to exceed $100,000 in any fiscal
year, solely to enable DASI to make payments to holders of its Capital
Stock in lieu of issuance of fractional shares of its Capital Stock;
(viii) repurchases of Capital Stock deemed to occur upon the
exercise of stock options if such Capital Stock represents a portion of
the exercise price thereof;
(ix) the declaration and payment of dividends to holders of
any class or series of Designated Preferred Stock (other than
Disqualified Capital Stock) issued after the date of this Indenture;
provided that, at the time of such issuance, the Company, after giving
effect to such issuance on a pro forma basis, would have had a Fixed
Charge Coverage Ratio of at least 2.0 to 1.0;
(x) other Restricted Payments in an aggregate amount not to
exceed $10.0 million since the date of this Indenture;
(xi) the distribution, as a dividend or otherwise, of shares
of Capital Stock of any Unrestricted Subsidiary of the Company;
(xii) cash dividends or loans from the Company to DASI in
amounts equal to amounts required for DASI to pay franchise taxes and
Federal, state and local taxes to the extent such income taxes are
attributable to the income of the Company and its Restricted
Subsidiaries; and
(xiii) dividends from the Company to DASI in an amount
sufficient to pay dividends on DASI's 7-1/2% Convertible Trust Preferred
Securities due 2028, that are outstanding on the issue date of the Notes.
The amount of all Restricted Payments (other than cash) shall be
the fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any assets or securities that are required to be valued
by this Section 4.07 shall be determined by the Board of Directors whose
resolution with respect thereto shall be delivered to the Trustee. The Board of
Directors' determination must be based upon an opinion or appraisal issued by an
accounting, appraisal or investment banking firm of national standing if the
fair market value exceeds $10.0 million. Not later than the date of making any
Restricted Payment, the Company shall deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by this Section 4.07 were
computed, together with a copy of any fairness opinion or appraisal required by
this Indenture.
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SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED
SUBSIDIARIES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(i) pay dividends or make any other distributions on its
Capital Stock to the Company or any of the Company's Restricted
Subsidiaries, or with respect to any other interest or participation in,
or measured by, its profits, or pay any indebtedness owed to the Company
or any of the Company's Restricted Subsidiaries;
(ii) make loans or advances to the Company or any of the
Company's Restricted Subsidiaries; or
(iii) transfer any of its properties or assets to the Company
or any of the Company's Restricted Subsidiaries.
However, the preceding restrictions will not apply to
encumbrances or restrictions existing under or by reason of:
(i) Existing Indebtedness as in effect on the date of this
Indenture;
(ii) this Indenture, the Notes and the Guaranties;
(iii) Indebtedness incurred by a Restricted Subsidiary that is
not a Guarantor in compliance with Section 4.13;
(iv) applicable law, regulation or order;
(v) any instrument governing Indebtedness or Capital Stock of
a Person acquired by the Company or any of its Restricted Subsidiaries as
in effect at the time of such acquisition (except to the extent such
Indebtedness was incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person,
or the property or assets of the Person, so acquired, PROVIDED that, in
the case of Indebtedness, such Indebtedness was permitted by the terms of
this Indenture to be incurred;
(vi) customary non-assignment provisions in leases entered
into in the ordinary course of business and consistent with past
practices;
(vii) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions on the property so
acquired of the nature described in clause (iii) of the preceding
paragraph;
(viii) any agreement for the sale or other disposition of a
Restricted Subsidiary that restricts distributions by that Restricted
Subsidiary pending its sale or other disposition;
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(ix) Liens securing Indebtedness that limit the right of the
debtor to dispose of the assets subject to such Lien;
(x) provisions with respect to the disposition or
distribution of assets or property in joint venture agreements, asset
sale agreements, stock sale agreements and other similar agreements
entered into in the ordinary course of business;
(xi) restrictions on cash or other deposits or net worth
imposed by customers under contracts entered into in the ordinary course
of business;
(xii) customary provisions in agreements with respect to
Permitted Joint Ventures;
(xiii) Indebtedness incurred after the date of this Indenture in
accordance with the terms of this Indenture; provided; that the
restrictions contained in the agreements governing such new Indebtedness
are, in the good faith judgment of the Board of Directors of the Company,
not materially less favorable, taken as a whole, to the holders of the
Notes than those contained in the agreements governing Indebtedness
outstanding on the date of this Indenture;
(xiv) any encumbrance or restriction of a Securitization Entity
effected in connection with a Qualified Securitization Transaction; and
(xv) any encumbrances or restrictions imposed by any
amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings of the contracts,
instruments or obligations referred to in clauses (i) through (xiv)
above; provided that such amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or
refinancings are, in the good faith judgment of the Board of Directors of
the Company, no more restrictive with respect to such dividend and other
payment restrictions prior to such amendment, modification, restatement,
renewal, increase, supplement, refunding, replacement or refinancing.
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
The Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt), and the Company shall not issue any Disqualified Stock and shall not
permit any of its Subsidiaries to issue any shares of preferred stock; PROVIDED,
HOWEVER, that the Company may incur Indebtedness (including Acquired Debt) or
issue Disqualified Stock, and the Guarantors may incur Indebtedness (including
Acquired Debt) or issue preferred stock, if in each case the Fixed Charge
Coverage Ratio for the Company's most recently ended four full fiscal quarters
for which internal financial statements are available immediately preceding the
date on which such additional Indebtedness is incurred or such Disqualified
Stock or preferred stock is issued would have been at least 2.0 to 1.0,
determined on a pro forma basis (including a pro forma application of the net
proceeds therefrom), as if the additional Indebtedness had been incurred, or the
preferred stock or Disqualified Stock had been issued, as the case may be, at
the beginning of such four-quarter period.
The first paragraph of this Section 4.09 shall not prohibit the
incurrence of any of the following items of Indebtedness (collectively,
"Permitted Debt"):
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(i) the incurrence by the Company and any Restricted
Subsidiary of Indebtedness and letters of credit under Credit Facilities
in an aggregate principal amount at any one time outstanding under this
clause (i) (with letters of credit being deemed to have a principal
amount equal to the maximum potential liability of the Company and its
Restricted Subsidiaries thereunder) not to exceed $950.0 million less any
mandatory prepayments actually made thereunder (to the extent, in the
case of payments of revolving credit Indebtedness, that the corresponding
commitments have been permanently reduced) or scheduled payments actually
made thereunder (other than the repayment of the Interim Term Loan using
the net proceeds from the sale of the Initial Notes);
(ii) the incurrence by the Company and its Restricted
Subsidiaries of the Existing Indebtedness;
(iii) the incurrence by the Company and the Guarantors of
Indebtedness represented by the Notes and the related Guaranties to be
issued on the date of this Indenture and the Exchange Notes and the
related Guaranties to be issued pursuant to the Registration Rights
Agreement;
(iv) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case, incurred
for the purpose of financing all or any part of the purchase price or
cost of construction or improvement of property, plant or equipment used
in the business of the Company or such Restricted Subsidiary, in an
aggregate principal amount, including all Permitted Refinancing
Indebtedness incurred to refund, refinance or replace any Indebtedness
incurred pursuant to this clause (iv), not to exceed 5% of Total Assets
at any time outstanding;
(v) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or
the net proceeds of which are used to refund, refinance or replace,
Indebtedness (other than intercompany Indebtedness) that was permitted by
this Indenture to be incurred under the first paragraph of this Section
4.09 or clauses (ii), (iii), (iv), (v) or (x) of this paragraph;
(vi) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company
and any of its Restricted Subsidiaries; PROVIDED, HOWEVER, that:
(A) if the Company or any Guarantor is the obligor on
such Indebtedness, such Indebtedness must be expressly
subordinated to the prior payment in full in cash of all
Obligations with respect to the Notes, in the case of the
Company, or the Guaranty of such Guarantor, in the case of a
Guarantor; and
(B) (1) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness being held by a
Person other than the Company or a Restricted Subsidiary thereof
and (2) any sale or other transfer of any such Indebtedness to a
Person that is not either the Company or a Restricted Subsidiary
thereof shall be deemed, in each case, to constitute an
incurrence of such Indebtedness by the Company or such Restricted
Subsidiary, as the case may be, that was not permitted by this
clause (vi);
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(vii) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred for the purpose of
fixing or hedging interest rate risk with respect to any floating rate
Indebtedness that is permitted by the terms of this Indenture to be
outstanding or to hedge exposure to foreign currency fluctuations or
commodity price risk with respect to any commodity purchases;
(viii) (A) the guarantee by the Company or any of the Guarantors
of Indebtedness of the Company or a Guarantor that was permitted to be
incurred by another provision of this Section 4.09; and
(B) the guarantee by any Restricted Subsidiary of
the Company that is not a Guarantor of Indebtedness of
another Restricted Subsidiary of the Company that is not
a Guarantor that was permitted to be incurred by another
provision of this Section 4.09;
(ix) the accrual of interest, accretion or amortization of
original issue discount, the payment of interest on any Indebtedness in
the form of additional Indebtedness with the same terms, and the payment
of dividends on Disqualified Stock in the form of additional shares of
the same class of Disqualified Stock; PROVIDED, in each such case, that
the amount thereof is included in Fixed Charges of the Company as
accrued;
(x) the incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness or Disqualified Stock in an
aggregate principal amount (or accreted value, as applicable) at any time
outstanding, including all Permitted Refinancing Indebtedness incurred to
refund, refinance or replace any Indebtedness incurred pursuant to this
clause (x), not to exceed $50.0 million;
(xi) the incurrence by the Company's Unrestricted Subsidiaries
of Non-Recourse Debt, provided, however, that if any such Indebtedness
ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event
shall be deemed to constitute an incurrence of Indebtedness by a
Restricted Subsidiary of the Company that was not permitted by this
clause (xi);
(xii) the incurrence of Indebtedness (including letters of
credit) in respect of workers' compensation claims, self-insurance
obligations, performance, surety, bid or similar bonds and completion
guaranties provided by the Company or one of its Restricted Subsidiaries
in the ordinary course of business and consistent with past practices;
(xiii) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary providing for indemnification, adjustment of
purchase price, earn out or other similar obligations, in each case,
incurred or assumed in connection with the disposition of any business,
assets or a Restricted Subsidiary, other than guarantees of Indebtedness
incurred by any Person acquiring all or any portion of such business,
assets or Restricted Subsidiary for the purpose of financing such
acquisition; PROVIDED that the maximum assumable liability in respect of
all such Indebtedness shall at no time exceed the gross proceeds actually
received by the Company and its Restricted Subsidiaries in connection
with such disposition;
(xiv) the incurrence by a Securitization Entity of Indebtedness
in a Qualified Securitization Transaction that is Non-Recourse Debt
(except for Standard Securitization Undertakings) with
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respect to the Company and its other Restricted Subsidiaries;
(xv) Indebtedness of the Company evidenced by promissory notes
subordinated to the Notes and the Exchange Notes issued to employees of
the Company and its Subsidiaries in lieu of cash payment at any time for
Equity Interest of DASI being repurchased from such employees; provided;
that the aggregate amount of such Indebtedness does not exceed $5.0
million at any one time outstanding;
(xvi) guaranties of Indebtedness of any other person incurred
by the Company or a Restricted Subsidiary in the ordinary course of
business in an aggregate principal amount not to exceed $5.0 million at
any one time outstanding;
(xvii) Indebtedness consisting of take-or-pay obligations
contained in supply agreements entered into by the Company or its
Subsidiaries in the ordinary course; and
(xviii) Indebtedness of Restricted Subsidiaries that are not
Guarantors permitted by Section 4.13 hereof.
For purposes of determining compliance with this Section 4.09, in
the event that an item of Indebtedness meets the criteria of more than one of
the categories of Permitted Debt described in clauses (i) through (xvii) above,
or is entitled to be incurred pursuant to the first paragraph of this Section
4.09, the Company shall, in its sole discretion, classify such item of
Indebtedness in any manner that complies with this Section 4.09. All borrowings
outstanding on the date of this Indenture under the Credit Facilities will be
deemed to have been borrowed pursuant to clause (i) of the definition of
Permitted Debt.
Section 4.10. Asset Sales.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:
(i) the Company (or the Restricted Subsidiary, as the case
may be) receives consideration at the time of such Asset Sale at least
equal to the fair market value of the assets or Equity Interests issued
or sold or otherwise disposed of (as determined in good faith by the
Company);
(ii) such fair market value is determined by the Company's
Board of Directors and evidenced by a resolution of the Board of
Directors set forth in an Officers' Certificate delivered to the Trustee;
and
(iii) 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 purposes of this provision, each of the following shall
be deemed to be cash:
(A) any liabilities (as shown on the Company's or such
Restricted Subsidiary's most recent balance sheet) of the Company
or any Restricted Subsidiary (other than contingent liabilities
and liabilities that are by their terms subordinated to the Notes
or any Guaranty) that are assumed by the transferee of any such
assets pursuant to a customary novation agreement that releases
the Company or such Restricted Subsidiary from further liability;
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(B) any securities, notes or other obligations received
by the Company or any such Restricted Subsidiary from such
transferee that are converted by the Company or such Restricted
Subsidiary into cash within 180 days after the consummation of
such Asset Sale (to the extent of the cash received in that
conversion); and
(C) any Designated Noncash Consideration received by the
Company or any of its Restricted Subsidiaries in such Asset Sale;
PROVIDED that the aggregate fair market value (as determined
above) of such Designated Noncash Consideration, taken together
with the fair market value at the time of receipt of all other
Designated Noncash Consideration received pursuant to this clause
(c) less the amount of Net Proceeds previously realized in cash
from prior Designated Noncash Consideration, is less than 5.0% of
Total Assets at the time of the receipt of such Designated
Noncash Consideration (with the fair market value of each item of
Designated Noncash Consideration being measured at the time
received and without giving effect to subsequent changes in
value).
Within 365 days after the receipt of any Net Proceeds from an
Asset Sale, the Company may apply such Net Proceeds at its option:
(i) to repay Senior Debt, and if such Senior Debt repaid is
revolving credit Indebtedness, to correspondingly reduce commitments with
respect thereto;
(ii) to acquire all or substantially all of the assets of, or
a majority of the Voting Stock of, another Permitted Business;
(iii) to make a capital expenditure; and/or
(iv) to acquire other long-term assets that are used or useful
in a Permitted Business.
Pending the final application of any such Net Proceeds, the
Company may temporarily reduce revolving credit borrowings or otherwise invest
such Net Proceeds in any manner that is not prohibited by this Indenture.
Any Net Proceeds from Asset Sales that are not applied or
invested as provided in the preceding paragraph will constitute "Excess
Proceeds." When the aggregate amount of Excess Proceeds exceeds $20.0 million,
the Company will make an Asset Sale Offer to all Holders of Notes and all
holders of other Indebtedness that is PARI PASSU with the Notes containing
provisions similar to those set forth in this Indenture with respect to offers
to purchase or redeem with the proceeds of sales of assets to purchase the
maximum principal amount of Notes and such other PARI PASSU Indebtedness that
may be purchased out of the Excess Proceeds. The offer price in any Asset Sale
Offer will be equal to 100% of the principal amount plus accrued and unpaid
interest and Liquidated Damages, if any, to the date of purchase, and will be
payable in cash. If any Excess Proceeds remain after consummation of an Asset
Sale Offer, the Company may use such Excess Proceeds for any purpose not
otherwise prohibited by this Indenture. If the aggregate principal amount of
Notes and such other PARI PASSU Indebtedness tendered into such Asset Sale Offer
exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and
such other PARI PASSU Indebtedness to be purchased on a pro rata basis based on
the principal amount of
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Notes and such other PARI PASSU Indebtedness tendered. Upon completion of each
Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
The Company will comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the Asset Sales
provisions of this Indenture, the Company will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under the Asset Sale provisions of this Indenture by virtue of such
conflict.
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each, an "Affiliate Transaction"), unless:
(i) such Affiliate Transaction is on terms that are no less
favorable to the Company or the relevant Restricted Subsidiary than those
that would have been obtained in a comparable transaction by the Company
or such Restricted Subsidiary with an unrelated Person; and
(ii) the Company delivers to the Trustee:
(A) with respect to any Affiliate Transaction or series
of related Affiliate Transactions involving aggregate
consideration in excess of $5.0 million, a resolution of the
Board of Directors set forth in an Officers' Certificate
certifying that such Affiliate Transaction complies with this
covenant and that such Affiliate Transaction has been approved by
a majority of the disinterested members of the Board of
Directors; and
(B) with respect to any Affiliate Transaction or series
of related Affiliate Transactions involving aggregate
consideration in excess of $15.0 million, an opinion as to the
fairness to the Company or the relevant Restricted Subsidiary of
such Affiliate Transaction from a financial point of view issued
by an accounting, appraisal or investment banking firm of
national standing.
The following items shall not be deemed to be Affiliate
Transactions and, therefore, will not be subject to the provisions of the prior
paragraph:
(i) any employment agreement entered into by the Company or
any of its Restricted Subsidiaries in the ordinary course of business and
consistent with the past practice of the Company or such Restricted Subsidiary;
(ii) transactions between or among the Company and/or its
Restricted Subsidiaries;
(iii) payment of reasonable directors fees to Persons who are
not otherwise Affiliates
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of the Company;
(iv) sales of Equity Interests (other than Disqualified Stock)
to Affiliates of the Company;
(v) Restricted Payments that are permitted by the provisions
of this Indenture described in Section 4.07 hereof;
(vi) providing indemnity to officers, directors, or employees
of the Company or any of its Subsidiaries as determined in good faith by the
Board of Directors of the Company;
(vii) the payment of customary management, consulting and
advisory fees and related expenses to Hidden Creek or its affiliates consistent
with past practices, including, without limitation, in connection with
acquisitions, divestitures or financings by DASI, the Company or any of the
Company's Restricted Subsidiaries;
(viii) the existence of, or the performance by the Company or
any of its Restricted Subsidiaries of its obligations under the terms of, any
agreement to which it is a party as of the date of this Indenture, and any
similar agreements which it may enter into thereafter; provided, however, that
the existence of, or the performance by the Company or any of its Restricted
Subsidiaries of obligations under, any future amendment to any such existing
agreement or under any similar agreement entered into after the date of this
Indenture shall only be permitted by this clause to the extent that the terms of
any such amendment or similar agreement are not disadvantageous to the Holders
in any material respect;
(ix) transactions effected as part of a Qualified
Securitization Transaction;
(x) transactions with customers, joint venture partners,
clients and suppliers, in each case in the ordinary course of business and
otherwise in compliance with the terms of this Indenture which are fair to the
Company or its Restricted Subsidiaries, in the reasonable determination of the
Board of Directors of the Company;
(xi) the grant of stock options, restricted stock or similar
rights to the Company's employees, directors and consultants pursuant to plans
approved by the Board of Directors of the Company; and
(xii) loans or advances to employees or consultants in the
ordinary course of business and consistent with past practices, which are
approved by a majority of the Board of Directors of the Company in good faith.
SECTION 4.12. LIENS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien of any kind on any asset now owned or hereafter acquired, except
Permitted Liens.
SECTION 4.13. LIMITATION ON FOREIGN INDEBTEDNESS.
The Company shall not permit any Restricted Subsidiary of the
Company that is not a
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Guarantor to, directly or indirectly, incur any Indebtedness (including Acquired
Indebtedness) unless:
(i) after giving effect to the incurrence of such
Indebtedness and the receipt of the application of the proceeds thereof;
(A) if, as a result of the incurrence of such
Indebtedness such Restricted Subsidiary will become subject to
any restriction or limitation on the payment of dividends or the
making of other distributions,
(1) the Fixed Charge Coverage Ratio of Restricted
Subsidiaries that are not Guarantors (determined on a pro forma
basis for the last four fiscal quarters for which financial
statements are available at the date of determination) is greater
than 2.5 to 1; and
(2) the Company's Fixed Charge Coverage Ratio
(determined on a pro forma basis for the last four fiscal
quarters of the Company for which financial statements are
available at the date of determination) is greater than 2.0 to 1;
and
(B) in any other case, the Company's Fixed Charge
Coverage Ratio (determined on a pro forma basis for the last four
fiscal quarters of the Company for which financial statements are
available at the date of determination) is greater than 2.0 to 1;
and
(ii) no Default or Event of Default shall have occurred and be
continuing at the time or as a consequence of the incurrence of such
Indebtedness.
In the event that any Indebtedness incurred pursuant to clause
(1)(b) of the foregoing paragraph is proposed to be amended, modified or
otherwise supplemented such that the payment of dividends or the making of other
distributions becomes subject in any manner to any restriction or limitation,
the Company will not permit the Restricted Subsidiary to so amend, modify or
supplement such Indebtedness unless such Indebtedness could be incurred pursuant
to the terms of clause (1)(a) of the foregoing paragraph.
All calculations required under the prior two paragraphs hereof
shall be made in a manner consistent with the calculations required under
Section 4.09.
SECTION 4.14. CORPORATE EXISTENCE.
Subject to Article 5 hereof, the Company shall do or cause to be
done all things necessary to preserve and keep in full force and effect (i) its
corporate existence, and the corporate, partnership or other existence of each
of its Subsidiaries, in accordance with the respective organizational documents
(as the same may be amended from time to time) of the Company or any such
Subsidiary and (ii) the rights (charter and statutory), licenses and franchises
of the Company and its Subsidiaries; PROVIDED, HOWEVER, that the Company shall
not be required to preserve any such right, license or franchise, or the
corporate, partnership or other existence of any of its Subsidiaries, if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Subsidiaries,
taken as a whole, and that the loss thereof is not adverse in any material
respect to the Holders of the Notes.
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SECTION 4.15. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
If a Change of Control occurs, each Holder of Notes will have the
right to require the Company to repurchase all or any part (equal to $1,000 or
an integral multiple thereof) of that Holder's Notes pursuant to the offer
described below (the "Change of Control Offer"). In the Change of Control
Offer, the Company shall offer a Change of Control Payment in cash equal to 101%
of the aggregate principal amount of Notes repurchased plus accrued and unpaid
interest and Liquidated Damages thereon, if any, to the date of purchase (the
"Change of Control Payment"). Within 30 days following any Change of Control,
unless the Company has exercised its right to redeem the Notes pursuant to
Section 3.07, the Company shall mail a notice to the Trustee and each Holder
describing the transaction or transactions that constitute the Change of Control
and offering to repurchase Notes on the purchase date specified in such notice
(which must be no earlier than 30 days nor later than 60 days from the date such
notice is mailed, other than as required by law (the "Change of Control Payment
Date")), pursuant to the procedures required by this Indenture and described in
such notice. The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change of Control. To the extent that
the provisions of any securities laws or regulations conflict with the Change of
Control provisions of this Indenture, the Company will comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under the Change of Control provisions of this
Indenture by virtue of such conflict.
On the Change of Control Payment Date, the Company shall, to the
extent lawful:
(i) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer;
(ii) deposit with the Paying Agent an amount equal to the
Change of Control Payment in respect of all Notes or portions thereof so
tendered; and
(iii) deliver or cause to be delivered to the Trustee the Notes
so accepted together with an Officers' Certificate stating the aggregate
principal amount of Notes or portions thereof being purchased by the
Company.
The Paying Agent shall promptly mail to each Holder of Notes so
tendered the Change of Control Payment for such Notes, and the Trustee shall
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; PROVIDED that each such new Note shall be in a
principal amount of $1,000 or an integral multiple thereof.
Prior to complying with any of the provisions of this Section
4.15, but in any event within 90 days following a Change of Control, the Company
will either repay all outstanding Senior Debt or obtain the requisite consents,
if any, under all agreements governing outstanding Senior Debt to permit the
repurchase of Notes required by this covenant. If the Company does not obtain
such consents or repay such borrowings, the Company will be prohibited from
purchasing the Notes. The Company will publicly announce the results of the
Change of Control Offer on or as soon as practicable after the Change of Control
Payment Date.
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The Company shall not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Section 4.15 and Section 3.09 hereof and
purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.
SECTION 4.16. NO SENIOR SUBORDINATED DEBT.
The Company shall not incur, create, issue, assume, guarantee or
otherwise become liable for any Indebtedness that is subordinate or junior in
right of payment to any Indebtedness of the Company and senior in any respect in
right of payment to the Notes. No Guarantor shall incur, create, issue, assume,
guarantee or otherwise become liable for any Indebtedness that is subordinate or
junior in right of payment to any Indebtedness of such Guarantor and senior in
any respect in right of payment to such Guarantor's Guaranty.
SECTION 4.17. ADDITIONAL SUBSIDIARY GUARANTIES.
If the Company or any of its Restricted Subsidiaries acquires or
creates another material Domestic Restricted Subsidiary after the date of this
Indenture and the newly acquired or created material Domestic Restricted
Subsidiary guarantees any obligations under any Credit Facility, then that newly
acquired or created Domestic Restricted Subsidiary must become a Guarantor and
execute a supplemental indenture and deliver an Opinion of Counsel to the
Trustee within 10 Business Days of the date on which it guaranteed any
obligation under any of the Credit Facilities. If any Subsidiary that is not a
Guarantor at any time guaranties Indebtedness of the Company or a Guarantor, the
Company will cause such Subsidiary to simultaneously execute and deliver
supplemental indentures providing for the Guaranty of the payment of the Notes
by such Subsidiary.
SECTION 4.18. DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES.
The Board of Directors may designate any Restricted Subsidiary to
be an Unrestricted Subsidiary if that designation would not cause a Default. If
a Restricted Subsidiary is designated as an Unrestricted Subsidiary, the
aggregate fair market value of all outstanding Investments owned by the Company
and its Restricted Subsidiaries in the Subsidiary so designated shall be deemed
to be an Investment made as of the time of such designation and shall either
reduce the amount available for Restricted Payments under clause (iii)(B) of the
first paragraph of Section 4.07 hereof or reduce the amount available for future
Investments, as the Company shall determine. That designation shall only be
permitted if such Investment would be permitted at the time and if such
Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary. The Board of Directors may redesignate any Unrestricted Subsidiary
to be a Restricted Subsidiary if the redesignation would not cause a Default.
SECTION 4.19. PAYMENTS FOR CONSENT.
The Company and DASI will not, and will not permit any of their
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration to or for the benefit of any Holder of Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Notes issued thereunder unless such consideration is
offered to be paid and is paid to all Holders of such Notes that consent, waive
or agree to amend in the time frame set forth in the solicitation documents
relating to such consent, waiver or agreement.
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ARTICLE 5.
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Company shall not, directly or indirectly: (1) consolidate or
merge with or into another Person (whether or not the Company is the surviving
corporation); or (2) sell, assign, transfer, convey or otherwise dispose of all
or substantially all of the properties or assets of the Company and its
Restricted Subsidiaries taken as a whole, in one or more related transactions,
to another Person; unless:
(i) either: (a) the Company is the surviving corporation; or
(b) the Person formed by or surviving any such consolidation or merger
(if other than the Company) or to which such sale, assignment, transfer,
conveyance or other disposition shall have been made is a corporation,
partnership, limited liability company or trust organized or existing
under the laws of the United States, any state thereof or the District of
Columbia;
(ii) the Person formed by or surviving any such consolidation
or merger (if other than the Company) or the Person to which such sale,
assignment, transfer, conveyance or other disposition shall have been
made assumes all the obligations of the Company under the Notes, this
Indenture and the Registration Rights Agreement pursuant to agreements
reasonably satisfactory to the Trustee;
(iii) immediately after such transaction no Default or Event of
Default exists; and
(iv) the Company or the Person formed by or surviving any such
consolidation or merger (if other than the Company) or to which such
sale, assignment, transfer, conveyance or other disposition shall have
been made shall, on the date of such transaction after giving pro forma
effect thereto and any related financing transactions as if the same had
occurred at the beginning of the applicable four-quarter period, be
permitted to incur at least $1.00 of additional Indebtedness pursuant to
the Fixed Charge Coverage Ratio test set forth in the first paragraph of
Section 4.09 hereof.
In addition, the Company shall not, directly or indirectly, lease
all or substantially all of its properties or assets, in one or more related
transactions, to any other Person. The provisions of this Section 5.01 shall not
apply to a sale, assignment, transfer, conveyance or other disposition of assets
between or among the Company and any of its Restricted Subsidiaries.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment,
transfer, conveyance or other disposition of all or substantially all of the
assets of the Company in accordance with Section 5.01 hereof, the successor
corporation formed by such consolidation or into or with which the Company is
merged or to which such sale, assignment, transfer, conveyance or other
disposition is made shall succeed to, and be substituted for (so that from and
after the date of such consolidation, merger, sale, conveyance or other
disposition, the provisions of this Indenture referring to the "Company" shall
refer instead to the successor corporation and not to the Company), and may
exercise every right and power of the Company under this Indenture with the same
effect as if such successor Person had been named as the Company herein;
PROVIDED, HOWEVER, that the predecessor Company shall not be relieved from the
obligation to pay the principal of and interest on the Notes except in the case
of a sale of all of the Company's assets that meets the requirements of Section
5.01 hereof.
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ARTICLE 6.
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
Each of the following is an Event of Default:
(i) default for 30 days in the payment when due of interest
on, or Liquidated Damages with respect to, any Notes, whether or not
prohibited by Article 10 hereof;
(ii) default in payment when due of the principal of or
premium, if any, on the Notes, whether or not prohibited by Article 10
hereof;
(iii) failure by the Company or any of its Restricted
Subsidiaries to comply with any of the provisions of Section 5.01 hereof;
(iv) failure by the Company or any of its Restricted
Subsidiaries for 60 days after specified notice to comply with any of the
other agreements in this Indenture or the Notes;
(v) default under any mortgage, indenture or instrument under
which there is issued and outstanding any Indebtedness for money borrowed
by the Company or any of its Restricted Subsidiaries (or the payment of
which is guaranteed by the Company or any of its Restricted Subsidiaries)
whether such Indebtedness or guarantee now exists, or is created after
the date hereof, if that default:
(A) is caused by a failure to pay principal of, or
interest or premium, if any, on such Indebtedness prior to the
expiration of the grace period provided in such Indebtedness on
the date of such default (a "Payment Default"); or
(B) results in the acceleration of such Indebtedness
prior to its express maturity,
and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under
which there has been a Payment Default or the maturity of which has been
so accelerated, aggregates $20.0 million or more;
(vi) failure by the Company or any of its Restricted
Subsidiaries to pay final judgments aggregating in excess of $20.0
million, which judgments are not paid, vacated, discharged or stayed or
non-appealable for a period of 60 days and in the event such judgment is
covered by insurance, an enforcement proceeding has been commenced by any
creditor upon such judgment or decree which is not properly stayed;
(vii) the Company or any of its Significant Subsidiaries or any
group of Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary pursuant to or within the meaning of Bankruptcy
Law:
(A) commences a voluntary case;
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(B) consents to the entry of an order for relief against
it in an involuntary case;
(C) consents to the appointment of a custodian of it or
for all or substantially all of its property
(D) makes a general assignment for the benefit of its
creditors; or
(E) generally is not paying its debts as they become
due; or
(viii) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken
as a whole, would constitute a Significant Subsidiary in an
involuntary case;
(B) appoints a custodian of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken
as a whole, would constitute a Significant Subsidiary or for all
or substantially all of the property of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken
as a whole, would constitute a Significant Subsidiary; or
(C) orders the liquidation of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken
as a whole, would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect
for 60 consecutive days; or
(ix) except as permitted by this Indenture, any Guaranty is
held in any judicial proceeding to be unenforceable or invalid or shall
cease for any reason to be in full force and effect or any Guarantor, or
any Person acting on behalf of any Guarantor, shall deny or disaffirm its
obligations under such Guarantor's Guaranty.
SECTION 6.02. ACCELERATION.
If any Event of Default (other than an Event of Default specified
in clause (vii) or (viii) of Section 6.01 hereof with respect to the Company,
any Significant Subsidiary or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary) occurs and is continuing, the Trustee
or the Holders of at least 25% in principal amount of the then outstanding Notes
may declare the principal of and accrued interest on all the Notes to be due and
payable by notice in writing to the Company and the Trustee specifying the
respective Event of Default and that such notice is a "notice of acceleration"
(the "Acceleration Notice"), and the same (1) shall become immediately due and
payable or (2) if there are any amounts outstanding under the Credit Agreement,
shall become immediately due and payable upon the first to occur of an
acceleration under the Credit Agreement or five Business Days after receipt by
the Company and the Representative under the Credit Agreement of such
Acceleration Notice but only if such Event of Default is then continuing. Upon
any such declaration, but subject to the immediately preceding sentence, the
Notes shall become due and payable immediately. Notwithstanding
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the foregoing, if an Event of Default specified in clause (vii) or (viii) of
Section 6.01 hereof occurs with respect to the Company, all outstanding Notes
shall be due and payable immediately without further action or notice. The
Holders of a majority in aggregate principal amount of the then outstanding
Notes by written notice to the Trustee may on behalf of all of the Holders
rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default
(except nonpayment of principal, interest or premium that has become due solely
because of the acceleration) have been cured or waived.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal, premium, if
any, and interest and Liquidated Damages, if any, on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal amount
of the then outstanding Notes by notice to the Trustee may on behalf of the
Holders of all of the Notes waive an existing Default or Event of Default and
its consequences hereunder, except a continuing Default or Event of Default in
the payment of the principal of, premium and Liquidated Damages, if any, or
interest on, the Notes (including in connection with an offer to purchase)
(PROVIDED, HOWEVER, that the Holders of a majority in aggregate principal amount
of the then outstanding Notes may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration).
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding
Notes may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may involve the
Trustee in personal liability.
SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this
Indenture or the Notes only if:
(a) the Holder of a Note gives to the Trustee written
notice of a continuing Event of Default;
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(b) the Holders of at least 25% in principal amount of
the then outstanding Notes make a written request to the Trustee to
pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and,
if requested, provide to the Trustee indemnity satisfactory to the
Trustee against any loss, liability or expense;
(d) the Trustee does not comply with the request within
60 days after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(e) during such 60-day period the Holders of a majority
in principal amount of the then outstanding Notes do not give the Trustee
a direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the
rights of another Holder of a Note or to obtain a preference or priority over
another Holder of a Note.
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right
of any Holder of a Note to receive payment of principal, premium and Liquidated
Damages, if any, and interest on the Note, on or after the respective due dates
expressed in the Note (including in connection with an offer to purchase), or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(i) or (ii)
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Company for the whole
amount of principal of, premium and Liquidated Damages, if any, and interest
remaining unpaid on the Notes and interest on overdue principal and, to the
extent lawful, interest and such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
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dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall
be deemed to authorize the Trustee to authorize or consent to or accept or adopt
on behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article, it
shall pay out the money in the following order:
FIRST: to the Trustee, its agents and attorneys for amounts due
under Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
SECOND: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium and Liquidated Damages, if any, and interest,
ratably, without preference or priority of any kind, according to the amounts
due and payable on the Notes for principal, premium and Liquidated Damages, if
any and interest, respectively; and
THIRD: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any
payment to Holders of Notes pursuant to this Section 6.10.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder of a
Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
ARTICLE 7.
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(b) Except during the continuance of an Event of Default:
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(i) the duties of the Trustee shall be determined solely by
the express provisions of this Indenture and the Trustee need perform
only those duties that are specifically set forth in this Indenture and
no others, and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements of
this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document believed by
it to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall
not be liable for any action it takes or omits to take in good faith in reliance
on such Officers' Certificate or Opinion of Counsel. The Trustee may consult
with counsel and the written advice of such counsel or any Opinion of Counsel
shall be full and complete authorization and protection from liability in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon.
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(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
(g) Except with respect to Section 4.01, the Trustee shall have no
duty to inquire as to the performance of the Company with respect to the
covenants contained in Article 4. In addition, the Trustee shall not be deemed
to have knowledge of an Event of Default except (i) any Default or Event of
Default occurring pursuant to Sections 4.01, 6.01(i) or 6.01(ii) or (ii) any
Default or Event of Default of which the Trustee shall have received written
notification or obtained actual knowledge.
(h) Delivery of reports, information and documents to the Trustee
under Section 4.03 is for informational purposes only and the Trustee's receipt
of the foregoing shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Company's compliance with any of their covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the SEC for
permission to continue as trustee or resign. Any Agent may do the same with
like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11
hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the Notes, it
shall not be accountable for the Company's use of the proceeds from the Notes or
any money paid to the Company or upon the Company's direction under any
provision of this Indenture, it shall not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee,
and it shall not be responsible for any statement or recital herein or any
statement in the Notes or any other document in connection with the sale of the
Notes or pursuant to this Indenture other than its certificate of
authentication.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if
it is known to the Trustee,
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the Trustee shall mail to Holders of Notes a notice of the Default or Event of
Default within 90 days after it occurs. Except in the case of a Default or
Event of Default in payment of principal of, premium, if any, or interest on any
Note, the Trustee may withhold the notice if and so long as a committee of its
Responsible Officers in good faith determines that withholding the notice is in
the interests of the Holders of the Notes.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each November 1 beginning with the
November 1 following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee shall mail to the Holders of the Notes a brief report
dated as of such reporting date that complies with TIA Section 313(a) (but if
no event described in TIA Section 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA Section 313(b)(2). The Trustee shall also transmit by
mail all reports as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders
of Notes shall be mailed to the Company and filed with the SEC and each stock
exchange on which the Notes are listed in accordance with TIA Section 313(d).
The Company shall promptly notify the Trustee when the Notes are listed on any
stock exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company and the Guarantors shall pay to the Trustee from time
to time reasonable compensation for its acceptance of this Indenture and
services hereunder. The Trustee's compensation shall not be limited by any law
on compensation of a trustee of an express trust. The Company and the
Guarantors shall reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.
The Company and the Guarantors shall, jointly and severally,
indemnify the Trustee against any and all losses, liabilities or expenses
incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, including the costs and
expenses of enforcing this Indenture against the Company and the Guarantors
(including this Section 7.07) and defending itself against any claim (whether
asserted by the Company or any Holder or any other person) or liability in
connection with the exercise or performance of any of its powers or duties
hereunder, except to the extent any such loss, liability or expense may be
attributable to its negligence or bad faith. The Trustee shall notify the
Company and the Guarantors promptly of any claim for which it may seek
indemnity. Failure by the Trustee to so notify the Company shall not relieve
the Company of its obligations hereunder. The Company shall defend the claim
and the Trustee shall cooperate in the defense. The Trustee may have separate
counsel and the Company shall pay the reasonable fees and expenses of such
counsel. The Company and the Guarantors need not pay for any settlement made
without its consent, which consent shall not be unreasonably withheld.
The obligations of the Company and the Guarantors under this Section 7.07 shall
survive the satisfaction and discharge of this Indenture.
To secure the Company's and the Guarantors' payment obligations
in this Section, the
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Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(vii) or (viii) hereof occurs, the
expenses and the compensation for the services (including the fees and expenses
of its agents and counsel) are intended to constitute expenses of administration
under any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA Section
313(b)(2) to the extent applicable.
The Company's and the Guarantors' obligations under this Section
7.07 and any claim arising hereunder shall survive the resignation or removal of
any Trustee, the discharge of the Company's obligations pursuant to Article 8
hereof and any rejection or termination under any Bankruptcy Law.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged
from the trust hereby created by so notifying the Company. The Holders of Notes
of a majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company,
or the Holders of Notes of at least 10% in principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note who
has been a Holder of a Note for at least six months, fails to comply with
Section 7.10, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
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A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee, PROVIDED
all sums owing to the Trustee hereunder have been paid and subject to the Lien
provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee
pursuant to this Section 7.08, the Company's obligations under Section 7.07
hereof shall continue for the benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate trustee power, that is subject to supervision or examination by
federal or state authorities and that has a combined capital and surplus of at
least $100.0 million or be part of a bank holding company with a combined
capital and surplus of at least $100 million, as set forth in its most recent
published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors
evidenced by a resolution set forth in an Officers' Certificate, at any time,
elect to have either Section 8.02 or 8.03 hereof be applied to all outstanding
Notes upon compliance with the conditions set forth below in this Article Eight.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.02, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to
have been discharged from its obligations with respect to all outstanding Notes
and all obligations of the Guarantors shall be deemed to have been discharged
with respect to their obligations
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under the Guaranties on the date the conditions set forth below are satisfied
(hereinafter, "LEGAL DEFEASANCE"). For this purpose, Legal Defeasance means
that the Company shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Notes and Guaranties, respectively,
and all obligations of the Guarantors shall be deemed to have been discharged
with respect to their obligations under the Guaranties, which shall thereafter
be deemed to be "outstanding" only for the purposes of Section 8.05 hereof and
the other Sections of this Indenture referred to in (a) and (b) below, and to
have satisfied all its other obligations under such Notes and this Indenture
(and the Trustee, on demand of and at the expense of the Company, shall execute
proper instruments acknowledging the same), except for the following provisions
which shall survive until otherwise terminated or discharged hereunder: (a) the
rights of Holders of outstanding Notes to receive solely from the trust fund
described in Section 8.04 hereof, and as more fully set forth in such Section,
payments in respect of the principal of, premium, if any, and interest and
Liquidated Damages, if any, on such Notes when such payments are due, (b) the
Company's obligations with respect to such Notes under Article 2 and Section
4.02 hereof, (c) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and the Company's and the Guarantors' obligations in
connection therewith and (d) this Article Eight. Subject to compliance with
this Article Eight, the Company may exercise its option under this Section 8.02
notwithstanding the prior exercise of its option under Section 8.03 hereof.
SECTION 8.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.03, the Company and each of the Guarantors
shall, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, be released from their respective obligations under the covenants
contained in Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17
and 4.18 hereof and clauses (iii) and (iv) of Section 5.01 hereof with respect
to the outstanding Notes on and after the date the conditions set forth in
Section 8.04 are satisfied (hereinafter, "COVENANT DEFEASANCE"), and the Notes
shall thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Notes shall not be deemed outstanding for accounting purposes). For this
purpose, Covenant Defeasance means that, with respect to the outstanding Notes,
the Company may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to comply shall not
constitute a Default or an Event of Default under Section 6.01 hereof, but,
except as specified above, the remainder of this Indenture and such Notes shall
be unaffected thereby. In addition, upon the Company's exercise under Section
8.01 hereof of the option applicable to this Section 8.03 hereof, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, Sections
5.01(iii) and 5.01(iv) and Sections 6.01(iv) through 6.01(vi) hereof shall not
constitute Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of
either Section 8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
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(a) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, cash in United States dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of, premium, if any, and interest and
Liquidated Damages, if any on the outstanding Notes on the stated maturity or on
the applicable redemption date, as the case may be and the Company must specify
whether the Notes are being defeased to maturity or to a particular redemption
date;
(b) in the case of an election under Section 8.02 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that (A) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the date of this Indenture, there has been a change in the
applicable federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Covenant Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the incurrence of Indebtedness all or a portion of the proceeds
of which will be used to defease the Notes pursuant to this Article Eight
concurrently with such incurrence) or insofar as Sections 6.01(vii) or
6.01(viii) hereof is concerned, at any time in the period ending on the 91st day
after the date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under the Senior Credit
Facilities or any other material agreement or instrument (other than this
Indenture) to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Opinion of
Counsel (which may be subject to customary exceptions) to the effect that ,
assuming no intervening bankruptcy of the Company or any Guarantor between the
date of deposit and the 91st day following the deposit and assuming that no
Holder is an "insider" of the Company under applicable bankruptcy law, after the
91st day following the deposit, the trust funds will not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders over any other creditors of the Company or with the
intent of defeating, hindering, delaying or defrauding any other creditors of
the Company; and
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(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this
Section 8.05, the "Trustee") pursuant to Section 8.04 hereof in respect of the
outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as
Paying Agent) as the Trustee may determine, to the Holders of such Notes of all
sums due and to become due thereon in respect of principal, premium, if any, and
interest, but such money need not be segregated from other funds except to the
extent required by law.
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.04 hereof or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article Eight to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon the
request of the Company any money or non-callable Government Securities held by
it as provided in Section 8.04 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.04(a) hereof), are in excess of the amount thereof
that would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
SECTION 8.06. REPAYMENT TO COMPANY.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of, premium, if
any, or interest on any Note and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable shall be
paid to the Company on its request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Note shall thereafter, as a
secured creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Company as trustee thereof, shall thereupon cease;
PROVIDED, HOWEVER, that the Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of the Company cause to be
published once, in the New York Times and The Wall Street Journal (national
edition), notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
notification or publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
SECTION 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United
States dollars or non-
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callable Government Securities in accordance with Section 8.02 or 8.03 hereof,
as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 8.02 or 8.03
hereof, as the case may be; PROVIDED, HOWEVER, that, if the Company makes any
payment of principal of, premium, if any, or interest on any Note following the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money held by the
Trustee or Paying Agent.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.02 of this Indenture, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture or the Notes
without the consent of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(c) to provide for the assumption of the Company's obligations to the
Holders of the Notes by a successor to the Company or a Guarantor pursuant to
Article 5 hereof;
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the legal
rights hereunder of any Holder of the Note;
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(f) to provide for the issuance of Additional Notes in accordance
with the limitations set forth in this Indenture as of the date hereof; or
(g) to allow any Guarantor to execute a supplemental indenture and/or
a Guaranty with respect to the Notes.
Upon the request of the Company accompanied by a resolution of
its Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon receipt by the Trustee of the documents
described in Section 7.02 hereof, the Trustee shall join with the Company and
the Guarantors in the execution of any amended or supplemental Indenture
authorized or permitted by the terms of this Indenture and to make any further
appropriate agreements and stipulations that may be therein contained, but the
Trustee shall not be obligated to enter into such amended or supplemental
Indenture that affects its own rights, duties or immunities under this Indenture
or otherwise.
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SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.02, the Company and
the Trustee may amend or supplement this Indenture (including Section 3.09, 4.10
and 4.15 hereof), the Guaranties and the Notes with the consent of the Holders
of at least a majority in principal amount of the Notes (including Additional
Notes, if any) then outstanding voting as a single class (including consents
obtained in connection with a tender offer or exchange offer for, or purchase
of, the Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing
Default or Event of Default (other than a Default or Event of Default in the
payment of the principal of, premium, if any, or interest on the Notes, except a
payment default resulting from an acceleration that has been rescinded) or
compliance with any provision of this Indenture, the Guaranties or the Notes may
be waived with the consent of the Holders of a majority in principal amount of
the then outstanding Notes (including Additional Notes, if any) voting as a
single class (including consents obtained in connection with a tender offer or
exchange offer for, or purchase of, the Notes). Without the consent of at least
75% in principal amount of the Notes then outstanding (including consents
obtained in connection with a tender offer or exchange offer for, or purchase
of, such Notes), no waiver or amendment to this Indenture may make any change in
the provisions of Article 10 hereof that adversely affects the rights of any
Holder of Notes. Section 2.08 hereof shall determine which Notes are considered
to be "outstanding" for purposes of this Section 9.02.
Upon the request of the Company accompanied by a resolution of
its Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid,
and upon receipt by the Trustee of the documents described in Section 7.02
hereof, the Trustee shall join with the Company in the execution of such amended
or supplemental Indenture unless such amended or supplemental Indenture directly
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes
under this Section 9.02 to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section
becomes effective, the Company shall mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount of the Notes (including
Additional Notes, if any) then outstanding voting as a single class may waive
compliance in a particular instance by the Company with any provision of this
Indenture or the Notes. However, without the consent of each Holder affected,
an amendment or waiver under this Section 9.02 may not (with respect to any
Notes held by a non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must consent
to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Note
or alter the provisions with respect to the redemption of the Notes (other than
provisions relating to Sections 3.09 or 4.15
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hereof);
(c) reduce the rate of or change the time for payment of interest on
any Note;
(d) waive a Default or Event of Default in the payment of principal,
or interest or premium, or Liquidated Damages, if any, on the Notes (except a
rescission of acceleration of the Notes by the Holders of at least a majority in
aggregate principal amount of the Notes (including Additional Notes, if any) and
a waiver of the payment default that resulted from such acceleration);
(e) make any Note payable in money other than that stated in the
Notes;
(f) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive payments
of principal of, or interest or premium or Liquidated Damages, if any, on the
Notes;
(g) waive a redemption payment with respect to any Note (other than a
payment required by Sections 3.09 or 4.15 hereof); or
(h) release any Guarantor from any of its obligations under its
Guaranty or this Indenture, except in accordance with the terms of this
Indenture; or
(i) make any change in Section 6.04 or 6.07 hereof or in the
preceding amendment and waiver provisions.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes
shall be set forth in an amended or supplemental Indenture that complies with
the TIA as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the Holder of a
Note and every subsequent Holder of a Note or portion of a Note that evidences
the same debt as the consenting Holder's Note, even if notation of the consent
is not made on any Note. However, any such Holder of a Note or subsequent
Holder of a Note may revoke the consent as to its Note if the Trustee receives
written notice of revocation before the date the waiver, supplement or amendment
becomes effective. An amendment, supplement or waiver becomes effective in
accordance with its terms and thereafter binds every Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note
shall not affect the validity and effect of such amendment, supplement or
waiver.
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SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article 9 if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Company may not sign an amendment or supplemental Indenture until the Board
of Directors approves it. In executing any amended or supplemental indenture,
the Trustee shall be entitled to receive and (subject to Section 7.01 hereof)
shall be fully protected in relying upon, in addition to the documents required
by Section 11.04 hereof, an Officer's Certificate and an Opinion of Counsel
stating that the execution of such amended or supplemental indenture is
authorized or permitted by this Indenture.
ARTICLE 10.
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE.
The Company agrees, and each Holder by accepting a Note agrees,
that the Indebtedness evidenced by the Notes is subordinated in right of
payment, to the extent and in the manner provided in this Article 10, to the
prior payment in full of all Senior Debt of the Company, including Senior Debt
incurred after the date of this Indenture, and that the subordination is for the
benefit of the holders of Senior Debt.
SECTION 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company, in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, in
an assignment for the benefit of creditors or in any marshalling of the
Company's assets and liabilities:
(i) holders of Senior Debt shall be entitled to receive
payment in full of all Obligations due in respect of such Senior Debt
(including interest after the commencement of any such proceeding at the
rate specified in the applicable Senior Debt) before Holders of the Notes
shall be entitled to receive any payment with respect to the Notes
(except that Holders may receive (i) Permitted Junior Securities and (ii)
payments and other distributions made from any defeasance trust created
pursuant to Section 8.01 hereof); and
(ii) until all Obligations with respect to Senior Debt (as
provided in subsection (i) above) are paid in full, any distribution to
which Holders would be entitled but for this Article 10 shall be made to
the holders of Senior Debt (except that Holders of Notes may receive (i)
Permitted Junior Securities and (ii) payments and other distributions
made from any defeasance trust created pursuant to Section 8.01 hereof),
as their interests may appear.
SECTION 10.03. DEFAULT ON DESIGNATED SENIOR DEBT.
(a) The Company may not make any payment or distribution to the
Trustee or any Holder in respect of Obligations with respect to the Notes and
may not acquire from the Trustee or any Holder any Notes for cash or property
(other than (i) Permitted Junior Securities and (ii) payments and other
distributions made from any defeasance trust created pursuant to Section 8.01
hereof) until all principal
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and other Obligations with respect to the Senior Debt have been paid in full if:
(i) a default in the payment of any principal or other
Obligations with respect to Designated Senior Debt occurs and is
continuing beyond any applicable grace period in the agreement, indenture
or other document governing such Designated Senior Debt; or
(ii) a default, other than a payment default, on Designated
Senior Debt occurs and is continuing on any series of Designated Senior
Debt that permits holders of that series to accelerate its maturity and
the Trustee receives a notice of the default (a "PAYMENT BLOCKAGE
NOTICE") from the Company or the holders (or a Representative of the
holders) of the Designated Senior Debt. If the Trustee receives any such
Payment Blockage Notice, no subsequent Payment Blockage Notice shall be
effective for purposes of this Section unless and until (i) at least 360
days shall have elapsed since the delivery of the immediately prior
Payment Blockage Notice and (ii) all scheduled payments of principal,
interest and premium and Liquidated Damages, if any, on the Notes that
have come due have been paid in full in cash. No nonpayment default that
existed or was continuing on the date of delivery of any Payment Blockage
Notice to the Trustee shall be, or be made, the basis for a subsequent
Payment Blockage Notice unless such default shall have been cured or
waived for a period of 90 days.
(b) The Company may and shall resume payments on and distributions in
respect of the Notes and may acquire them upon the earlier of:
(i) in the case of a payment default, upon the date on which
such default is cured or waived, or
(ii) in the case of a nonpayment default, the earlier of the
date on which such nonpayment default is cured or waived or 179 days
after the date on which the applicable Payment Blockage Notice is
received, unless the maturity of any Designated Senior Debt has been
accelerated.
SECTION 10.04. ACCELERATION OF NOTES.
If payment of the Notes is accelerated because of an Event of
Default, the Company shall promptly notify holders of Senior Debt of the Company
of the acceleration.
SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder receives any payment
of any Obligations with respect to the Notes (except in Permitted Junior
Securities or payments and other distributions made from any defeasance trust
created pursuant to Section 8.01 hereof) at a time when the payment is
prohibited by this Article 10 and the Trustee or such Holder, as applicable, has
actual knowledge (provided by formal notice in accordance with Section 10.06
hereof in the case of the Trustee) that such payment is prohibited by Section
10.03 hereof, such payment shall be held by the Trustee or such Holder, in trust
for the benefit of, and shall be paid forthwith over and delivered, upon written
request, to, the holders of Senior Debt as their interests may appear or their
Representative under the indenture or other agreement (if any) pursuant to which
Senior Debt may have been issued, as their respective interests may appear, for
application to the payment of all Obligations with respect to Senior Debt
remaining unpaid to the extent necessary to pay such Obligations in full in
accordance with their terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Debt.
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With respect to the holders of Senior Debt, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article 10, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt, and shall not be liable to any
such holders if the Trustee shall pay over or distribute to or on behalf of
Holders or the Company or any other Person money or assets to which any holders
of Senior Debt shall be entitled by virtue of this Article 10, except if such
payment is made as a result of the willful misconduct or gross negligence of the
Trustee.
SECTION 10.06. NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying
Agent of any facts known to the Company that would cause a payment of any
Obligations with respect to the Notes to violate this Article 10, but failure to
give such notice shall not affect the subordination of the Notes to the Senior
Debt as provided in this Article 10.
SECTION 10.07. SUBROGATION.
After all Senior Debt is paid in full and until the Notes are
paid in full, Holders of Notes shall be subrogated (equally and ratably with all
other Indebtedness PARI PASSU with the Notes) to the rights of holders of Senior
Debt to receive distributions applicable to Senior Debt to the extent that
distributions otherwise payable to the Holders of Notes have been applied to the
payment of Senior Debt. A distribution made under this Article 10 to holders
of Senior Debt that otherwise would have been made to Holders of Notes is not,
as between the Company and Holders, a payment by the Company on the Notes.
SECTION 10.08. RELATIVE RIGHTS.
This Article 10 defines the relative rights of Holders of Notes
and holders of Senior Debt. Nothing in this Indenture shall:
(1) impair, as between the Company and Holders of Notes, the
obligation of the Company, which is absolute and unconditional, to pay principal
of and interest on the Notes in accordance with their terms;
(2) affect the relative rights of Holders of Notes and
creditors of the Company other than their rights in relation to holders of
Senior Debt; or
(3) prevent the Trustee or any Holder of Notes from
exercising its available remedies upon a Default or Event of Default, subject to
the rights of holders and owners of Senior Debt to receive distributions and
payments otherwise payable to Holders of Notes.
If the Company fails because of this Article 10 to pay principal
of or interest on a Note on the due date, the failure is still a Default or
Event of Default.
SECTION 10.09. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Debt to enforce the
subordination of the Indebtedness
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evidenced by the Notes shall be impaired by any act or failure to act by the
Company or any Holder or by the failure of the Company or any Holder to comply
with this Indenture.
SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to
holders of Senior Debt, the distribution may be made and the notice given to
their Representative.
Upon any payment or distribution of assets of the Company
referred to in this Article 10, the Trustee and the Holders of Notes shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Holders of Notes for the purpose of ascertaining the Persons
entitled to participate in such distribution, the holders of the Senior Debt and
other Indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 10.
SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee shall have received at its
Corporate Trust Office at least five Business Days prior to the date of such
payment written notice of facts that would cause the payment of any Obligations
with respect to the Notes to violate this Article 10. Only the Company or a
Representative may give the notice. Nothing in this Article 10 shall impair the
claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold
Senior Debt of the Company with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights.
SECTION 10.12. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of Notes, by the Holder's acceptance thereof,
authorizes and directs the Trustee on such Holder's behalf to take such action
as may be necessary or appropriate to effectuate the subordination as provided
in this Article 10, and appoints the Trustee to act as such Holder's
attorney-in-fact for any and all such purposes. If the Trustee does not file a
proper proof of claim or proof of debt in the form required in any proceeding
referred to in Section 6.09 hereof at least 30 days before the expiration of the
time to file such claim the holders of the Senior Debt of the Company or their
Representatives are hereby authorized to file an appropriate claim for and on
behalf of the Holders of the Notes.
SECTION 10.13. AMENDMENTS.
The provisions of this Article 10 shall not be amended or
modified without the written consent of the holders of all Senior Debt.
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ARTICLE 11.
GUARANTIES
SECTION 11.01. GUARANTY.
Subject to this Article 11, each of the Guarantors hereby,
jointly and severally, unconditionally guarantees to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee and its successors
and assigns, irrespective of the validity and enforceability of this Indenture,
the Notes or the obligations of the Company hereunder or thereunder, that:
(a) the principal of and interest on the Notes will be promptly paid in full
when due, whether at maturity, by acceleration, redemption or otherwise, and
interest on the overdue principal of and interest on the Notes, if any, if
lawful, and all other obligations of the Company to the Holders or the Trustee
hereunder or thereunder will be promptly paid in full or performed, all in
accordance with the terms hereof and thereof; and (b) in case of any extension
of time of payment or renewal of any Notes or any of such other obligations,
that same will be promptly paid in full when due or performed in accordance with
the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise. Failing payment when due of any amount so guaranteed
or any performance so guaranteed for whatever reason, the Guarantors shall be
jointly and severally obligated to pay the same immediately. Each Guarantor
agrees that this is a guarantee of payment and not a guarantee of collection.
The Guarantors hereby agree that their obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Notes with respect
to any provisions hereof or thereof, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of a guarantor.
Each Guarantor hereby waives diligence, presentment, demand of payment, filing
of claims with a court in the event of insolvency or bankruptcy of the Company,
any right to require a proceeding first against the Company, protest, notice and
all demands whatsoever and covenants that this Guaranty shall not be discharged
except by complete performance of the obligations contained in the Notes and
this Indenture.
If any Holder or the Trustee is required by any court or
otherwise to return to the Company, the Guarantors or any custodian, trustee,
liquidator or other similar official acting in relation to either the Company or
the Guarantors, any amount paid by either to the Trustee or such Holder, this
Guaranty, to the extent theretofore discharged, shall be reinstated in full
force and effect.
Each Guarantor agrees that it shall not be entitled to any right
of subrogation in relation to the Holders in respect of any obligations
guaranteed hereby until payment in full of all obligations guaranteed hereby.
Each Guarantor further agrees that, as between the Guarantors, on the one hand,
and the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 hereof
for the purposes of this Guaranty, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such obligations as provided in Article 6 hereof, such obligations (whether or
not due and payable) shall forthwith become due and payable by the Guarantors
for the purpose of this Guaranty. The Guarantors shall have the right to seek
contribution from any non-paying Guarantor so long as the exercise of such right
does not impair the rights of the Holders under the Guaranty.
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SECTION 11.02. SUBORDINATION OF GUARANTY.
The Obligations of each Guarantor under its Guaranty pursuant to
this Article 11 shall be junior and subordinated to the Senior Debt of such
Guarantor on the same basis as the Notes are junior and subordinated to Senior
Debt of the Company. For the purposes of the foregoing sentence, the Trustee
and the Holders shall have the right to receive and/or retain payments by any of
the Guarantors only at such times as they may receive and/or retain payments in
respect of the Notes pursuant to this Indenture, including Article 10 hereof.
SECTION 11.03. LIMITATION ON GUARANTOR LIABILITY.
Each Guarantor other than DASI, and by its acceptance of Notes,
each Holder, hereby confirms that it is the intention of all such parties that
the Guaranty of such Guarantor other than DASI not constitute a fraudulent
transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or
state law to the extent applicable to any Guaranty. To effectuate the foregoing
intention, the Trustee, the Holders and the Guarantors other than DASI hereby
irrevocably agree that the obligations of such Guarantor under its Guaranty and
this Article 11 shall be limited to the maximum amount as will, after giving
effect to such maximum amount and all other contingent and fixed liabilities of
such Guarantor that are relevant under such laws, and after giving effect to any
collections from, rights to receive contribution from or payments made by or on
behalf of any other Guarantor in respect of the obligations of such other
Guarantor under this Article 11, result in the obligations of such Guarantor
under its Guaranty not constituting a fraudulent transfer or conveyance.
SECTION 11.04. EXECUTION AND DELIVERY OF GUARANTY.
To evidence its Guaranty set forth in Section 11.01, each
Guarantor hereby agrees that a notation of such Guaranty substantially in the
form included in Exhibit E shall be endorsed by an Officer of such Guarantor on
each Note authenticated and delivered by the Trustee and that this Indenture
shall be executed on behalf of such Guarantor by its President or one of its
Vice Presidents.
Each Guarantor hereby agrees that its Guaranty set forth in
Section 11.01 shall remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Guaranty.
If an Officer whose signature is on this Indenture or on the
Guaranty no longer holds that office at the time the Trustee authenticates the
Note on which a Guaranty is endorsed, the Guaranty shall be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Guaranty set forth in
this Indenture on behalf of the Guarantors.
In the event that the Company creates or acquires any new
Subsidiaries subsequent to the date of this Indenture, if required by Section
4.17 hereof, the Company shall cause such Subsidiaries to execute supplemental
indentures to this Indenture in the form of Exhibit F hereto and Guaranties in
accordance with Section 4.17 hereof and this Article 11, to the extent
applicable.
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SECTION 11.05. GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
Except as otherwise provided in Section 11.06, a Guarantor may
not sell or otherwise dispose of all or substantially all of its assets to, or
consolidate with or merge with or into (whether or not such Guarantor is the
surviving Person) another Person, other than the Company or another Guarantor
unless:
(a) immediately after giving effect to that transaction, no Default
or Event of Default exists; and
(b) either:
(i) the Person acquiring the property in any such sale or
disposition or the Person formed by or surviving any such consolidation
or merger assumes all the obligations of that Guarantor under this
Indenture, its Guaranty and the Registration Rights Agreement, pursuant
to a supplemental indenture and appropriate collateral documents in form
and substance reasonably satisfactory to the Trustee; or
(ii) the Net Proceeds of such sale or other disposition are
applied in accordance with the applicable provisions of this Indenture.
In case of any such consolidation, merger, sale or conveyance and
upon the assumption by the successor Person, by supplemental indenture, executed
and delivered to the Trustee and satisfactory in form to the Trustee, of the
Guaranty endorsed upon the Notes and the due and punctual performance of all of
the covenants and conditions of this Indenture to be performed by the Guarantor,
such successor Person shall succeed to and be substituted for the Guarantor with
the same effect as if it had been named herein as a Guarantor. Such successor
Person thereupon may cause to be signed any or all of the Guaranties to be
endorsed upon all of the Notes issuable hereunder which theretofore shall not
have been signed by the Company and delivered to the Trustee. All the
Guaranties so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Guaranties theretofore and thereafter issued in
accordance with the terms of this Indenture as though all of such Guaranties had
been issued at the date of the execution hereof.
Except as set forth in Articles 4 and 5 hereof, and
notwithstanding clauses (a) and (b) above, nothing contained in this Indenture
or in any of the Notes shall prevent any consolidation or merger of a Guarantor
with or into the Company or another Guarantor, or shall prevent any sale or
conveyance of the property of a Guarantor as an entirety or substantially as an
entirety to the Company or another Guarantor.
SECTION 11.06. RELEASES FOLLOWING SALE OF ASSETS.
The Guaranty of a Guarantor will be released:
(a) in connection with any sale or other disposition of all or
substantially all of the assets of that Guarantor (including by way of merger or
consolidation) to a Person that is not (either before or after giving effect to
such transaction) a Restricted Subsidiary of the Company, if the Guarantor
applies the Net Proceeds of that sale or other disposition in accordance with
the applicable provisions of this Indenture, including without limitation
Section 4.10 hereof; or
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(b) in connection with any sale of all of the capital stock of a
Guarantor to a Person that is not (either before or after giving effect to such
transaction) a Restricted Subsidiary of the Company, if the Company applies the
Net Proceeds of that sale in accordance with the applicable provisions of this
Indenture, including without limitation Section 4.10 hereof; or
(c) if the Company properly designates any Restricted Subsidiary that
is a Guarantor as an Unrestricted Subsidiary.
Upon delivery by the Company to the Trustee of an Officers'
Certificate and an Opinion of Counsel to the effect that such sale or other
disposition was made by the Company in accordance with the applicable provisions
of this Indenture, including without limitation Section 4.10 hereof, the Trustee
shall execute any documents reasonably required in order to evidence the release
of any Guarantor from its obligations under its Guaranty.
Any Guarantor not released from its obligations under its
Guaranty shall remain liable for the full amount of principal of and interest on
the Notes and for the other obligations of any Guarantor under this Indenture as
provided in this Article 11.
ARTICLE 12.
MISCELLANEOUS
SECTION 12.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by TIA Section 318(c), the imposed duties shall control.
SECTION 12.02. NOTICES.
Any notice or communication by the Company, any Guarantor or the
Trustee to the others is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return receipt requested),
telex, telecopier or overnight air courier guaranteeing next day delivery, to
the others' address
If to the Company and/or any Guarantor:
Dura Operating Corp.
4508 IDS Center
Minneapolis, MN 55402
Telecopier No.: (612) 332-2012
Attention: Chief Financial Officer
With a copy to:
Kirkland & Ellis
200 East Randolph Drive
Chicago, IL 60601
Telecopier No.: (312) 861-2200
Attention: Dennis M. Myers
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If to the Trustee:
U.S. Bank Trust National Association
180 E. 5th Street
St. Paul, MN 55101
Telecopier No.: (651) 244-0711
Attention: Corporate Trust Administration
The Company, any Guarantor or the Trustee, by notice to the
others may designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first
class mail, certified or registered, return receipt requested, or by overnight
air courier guaranteeing next day delivery to its address shown on the register
kept by the Registrar. Any notice or communication shall also be so mailed to
any Person described in TIA Section 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.
SECTION 12.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders may communicate pursuant to TIA Section 312(b) with
other Holders with respect to their rights under this Indenture or the Notes.
The Company, the Trustee, the Registrar and anyone else shall have the
protection of TIA Section 312(c).
SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 12.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 12.05 hereof) stating that, in the opinion
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of such counsel, all such conditions precedent and covenants have been
satisfied.
SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of
TIA Section 314(e) and shall include:
(a) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or
she has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition has
been satisfied; and
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.
SECTION 12.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
SECTION 12.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No past, present or future director, officer, employee,
incorporator or stockholder of the Company or any Guarantor, as such, shall have
any liability for any obligations of the Company or such Guarantor under the
Notes, the Guaranties, this Indenture or for any claim based on, in respect of,
or by reason of, such obligations or their creation. Each Holder by accepting a
Note waives and releases all such liability. The waiver and release are part of
the consideration for issuance of the Notes.
SECTION 12.08. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE
USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE GUARANTIES WITHOUT GIVING
EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 12.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture,
loan or debt agreement of the Company or its Subsidiaries or of any other
Person. Any such indenture, loan or debt agreement may not be used to interpret
this Indenture.
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SECTION 12.10. SUCCESSORS.
All agreements of the Company in this Indenture and the Notes
shall bind its successors. All agreements of the Trustee in this Indenture
shall bind its successors. All agreements of each Guarantor in this Indenture
shall bind its successors, except as otherwise provided in Section 11.
SECTION 12.11. SEVERABILITY.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 12.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement.
SECTION 12.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
[INDENTURE SIGNATURE PAGES FOLLOW]
88
<PAGE>
[INDENTURE SIGNATURE PAGES]
Dated as of April 22, 1999
DURA OPERATING CORP.
By: /s/ David Bovee
--------------------------
Name:
Title:
DURA AUTOMOTIVE SYSTEMS, INC.
By: /s/ David Bovee
--------------------------
Name:
Title:
DURA AUTOMOTIVE SYSTEMS, INC.
COLUMN SHIFTER OPERATIONS
UNIVERSAL TOOL & STAMPING
COMPANY INC.
DURA AUTOMOTIVE SYSTEMS CABLE
OPERATIONS, INC.
ADWEST ELECTRONICS, INC.
ADWEST WESTERN AUTOMOTIVE, INC.
X.E. CO.
EXCEL OF TENNESSEE, L.P.
EXCEL CORPORATION
EXCEL INDUSTRIES OF MICHIGAN, INC.
ANDERSON INDUSTRIES, INC.
ATWOOD INDUSTRIES, INC.
HYDRO FLAME CORPORATION
ATWOOD AUTOMOTIVE INC.
MARK I MOLDED PLASTICS, INC.
MARK I MOLDED PLASTICS OF
TENNESSEE, INC.
By: /s/ David Bovee
--------------------------
Name:
Title:
U.S. BANK TRUST NATIONAL
ASSOCIATION
By: /s/ R. Prokosch
--------------------------
Name:
Title:
89
<PAGE>
EXHIBIT A
(FACE OF NOTE)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CUSIP
-------------
ISIN
-------------
9% Senior Subordinated Notes due 2009
No. $
--- -------------
DURA OPERATING CORP.
promises to pay to CEDE & CO., or registered assigns, the principal sum of
______________ MILLION Dollars ($__________) on May 1, 2009.
Interest Payment Dates: May 1 and November 1, commencing November 1, 1999.
Record Dates: April 15 and October 15.
Dated: April 22, 1999
DURA OPERATING CORP.
By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title:
This is one of the Notes referred to in the within-mentioned Indenture:
U.S. BANK TRUST NATIONAL ASSOCIATION
By:
--------------------------------
Authorized Signatory
Dated: April 22, 1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
A-1
<PAGE>
(BACK OF NOTE)
9% Senior Subordinated Notes due 2009
THE NOTE (OR ITS PREDECESSORS) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED, AND THE NOTE EVIDENCED HEREBY MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE NOTE EVIDENCED HEREBY
IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER
OR ANOTHER EXEMPTION UNDER THE SECURITIES ACT. THE HOLDER OF THE NOTE EVIDENCED
HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH NOTE MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (I) (A) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT), PURCHASING FOR ITS OWN ACCOUNT IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (B) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 OF THE SECURITIES ACT, (C)
OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 OF REGULATION S UNDER THE SECURITIES ACT OR (D) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT PROVIDED THAT IN THE CASE OF A TRANSFER PURSUANT TO CLAUSE (D)
SUCH TRANSFER IS EFFECTED BY THE DELIVERY TO THE TRANSFEREE OF DEFINITIVE
SECURITIES REGISTERED IN ITS NAME (OR ITS NOMINEES NAME) IN THE BOOKS MAINTAINED
BY THE REGISTRAR, AND IS SUBJECT TO THE RECEIPT BY THE REGISTRAR (AND THE
COMPANY, IF THEY SO REQUEST) OF A CERTIFICATION OF THE TRANSFEROR AND AN OPINION
OF COUNSEL TO THE EFFECT THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES
ACT, (II) TO THE COMPANY OR (III) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, ANDEACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE NOTE EVIDENCED HEREBY OF THE
RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY
BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY
BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(A) OF THE
INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE, AND (IV) THIS GLOBAL
NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT
OF THE COMPANY.
A-2
<PAGE>
Capitalized terms used herein shall have the meanings assigned to
them in the Indenture referred to below unless otherwise indicated.
1. INTEREST. Dura Operating Corp., a Delaware corporation (the
"COMPANY"), promises to pay interest on the principal amount of this Note at 9%
per annum from April 22, 1999 until maturity and shall pay the Liquidated
Damages payable pursuant to Section 5 of the Registration Rights Agreement
referred to below. The Company shall pay interest and Liquidated Damages
semi-annually on May 1 and November 1 of each year, or if any such day is not a
Business Day, on the next succeeding Business Day (each an "INTEREST PAYMENT
DATE"). Interest on the Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the date of
issuance; PROVIDED that if there is no existing Default in the payment of
interest, and if this Note is authenticated between a record date referred to on
the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; PROVIDED, FURTHER, that
the first Interest Payment Date shall be November 1, 1999. The Company shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand at a rate that is 1% per annum in excess of the rate then in effect; it
shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated Damages
(without regard to any applicable grace periods) from time to time on demand at
the same rate to the extent lawful. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the
Notes (except defaulted interest) and Liquidated Damages to the Persons who are
registered Holders of Notes at the close of business on the April 15 or October
15 next preceding the Interest Payment Date, even if such Notes are canceled
after such record date and on or before such Interest Payment Date, except as
provided in Section 2.12 of the Indenture with respect to defaulted interest.
The Notes will be payable as to principal, premium and Liquidated Damages, if
any, and interest at the office or agency of the Company maintained for such
purpose within or without the City and State of New York or, subject to any
applicable laws and regulations, at the office of the paying agent in
Luxembourg, or, at the option of the Company, payment of interest and Liquidated
Damages may be made by check mailed to the Holders at their addresses set forth
in the register of Holders, and provided that payment by wire transfer of
immediately available funds will be required with respect to principal of and
interest, premium and Liquidated Damages on, all Global Notes and all other
Notes the Holders of which shall have provided wire transfer instructions to the
Company or the Paying Agent. Such payment shall be in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, U.S. Bank Trust
National Association, the Trustee under the Indenture, will act as principal
Paying Agent and Registrar. The Industrial Bank of Japan (Luxembourg) S.A. will
initially act as co-registrar and co-paying agent in Luxembourg. If and as long
as the Notes are listed on the Luxembourg Stock Exchange, the Company will
maintain a paying agent in Luxembourg. The Company may change any Paying Agent
or Registrar without notice to any Holder. The Company or any of its
Subsidiaries may act in any such capacity.
4. INDENTURE. The Company issued the Notes under an Indenture,
dated as of April 22, 1999 (the "INDENTURE"), among the Company, the Guarantors
and the Trustee. The terms of the Notes include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (15 U.S. Code Sections 77aaa-77bbbb). The Notes are subject to
all such
A-3
<PAGE>
terms, and Holders are referred to the Indenture and such Act for a statement of
such terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall govern and be
controlling. The Notes are obligations of the Company initially limited to
$300.0 million in aggregate principal amount. The Indenture pursuant to which
this Note is issued provides that up to $50.0 million Additional Notes may be
issued thereunder.
5. OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this Paragraph
5, the Notes will not be redeemable at the Company's option prior to May 1,
2004. Thereafter, the Notes will be subject to redemption at any time at the
option of the Company, in whole or in part, upon not less than 30 nor more than
60 days' notice, at the redemption prices (expressed as percentages of principal
amount) set forth below plus accrued and unpaid interest and Liquidated Damages,
if any, thereon to the applicable redemption date, if redeemed during the
twelve-month period beginning on May 1 of the years indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2004 ......................... 104.50%
2005 ......................... 103.00%
2006 ......................... 101.50%
2007 and thereafter .......... 100.00%
</TABLE>
(b) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, before May 1, 2002, the Company may on any one or more occasions
redeem up to 35% of the aggregate principal amount of Notes issued under the
Indenture (calculated after giving effect to any issuance of Additional Notes)
at a redemption price of 101% of the principal amount thereof, PLUS accrued and
unpaid interest and Liquidated Damages thereon, if any, to the redemption date,
with the net cash proceeds of any Equity Offerings; PROVIDED that at least 65%
of the aggregate principal amount of Notes issued under the Indenture remains
outstanding immediately after the occurrence of such redemption (excluding Notes
held by Dura Automotive Systems, Inc., the Company and their respective
Subsidiaries); and PROVIDED FURTHER that such redemption shall occur within 90
days of the date of the closing of any such Equity Offering.
6. MANDATORY REDEMPTION. Except as set forth in paragraph 7
below, the Company shall not be required to make mandatory redemption or sinking
fund payments with respect to the Notes.
A-4
<PAGE>
7. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company shall be
required to make an offer (a "CHANGE OF CONTROL OFFER") to repurchase all or any
part (equal to $1,000 or an integral multiple thereof) of each Holder's Notes at
a purchase price equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Liquidated Damages thereon, if any, to the date
of purchase (the "CHANGE OF CONTROL PAYMENT"). Within 30 days following any
Change of Control, the Company shall mail a notice to each Holder setting forth
the procedures governing the Change of Control Offer as required by the
Indenture.
(b) When the aggregate amount of Excess Proceeds exceeds $20.0
million, the Company will make an Asset Sale Offer to all Holders of Notes and
all holders of other Indebtedness that is PARI PASSU with the Notes containing
provisions similar to those set forth in the Indenture with respect to offers to
purchase or redeem with the proceeds of sales of assets to purchase the maximum
principal amount of Notes and such other PARI PASSU Indebtedness that may be
purchased out of the Excess Proceeds. The offer price in any Asset Sale Offer
will be equal to 100% of the principal amount plus accrued and unpaid interest
and Liquidated Damages, if any, to the date of purchase, and will be payable in
cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer,
the Company may use such Excess Proceeds for any purpose not otherwise
prohibited by the Indenture. If the aggregate principal amount of Notes and such
other PARI PASSU Indebtedness tendered into such Asset Sale Offer exceeds the
amount of Excess Proceeds, the Trustee shall select the Notes and such other
PARI PASSU Indebtedness to be purchased on a pro rata basis based on the
principal amount of the Notes and such other PARI PASSU Indebtedness tendered.
Holders of Notes that are the subject of an offer to purchase will receive an
Asset Sale Offer from the Company prior to any related purchase date and may
elect to have such Notes purchased by completing the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Notes.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed
at least 30 days but not more than 60 days before the redemption date to each
Holder whose Notes are to be redeemed at its registered address. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on Notes or
portions thereof called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Notes may be registered and Notes may be
exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Company need not
exchange or register the transfer of any Note or portion of a Note selected for
redemption, except for the unredeemed portion of any Note being redeemed in
part. Also, the Company need not exchange or register the transfer of any Notes
for a period of 15 days before a selection of Notes to be redeemed or during the
period between a record date and the corresponding Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note will
be treated as its owner for all purposes.
A-5
<PAGE>
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture, the Guaranties or the Notes may be amended or
supplemented with the consent of the Holders of at least a majority in principal
amount of the then outstanding Notes and Additional Notes, if any, voting as a
single class, and any existing default or compliance with any provision of the
Indenture, the Guaranties or the Notes may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Notes and
Additional Notes, if any, voting as a single class. Without the consent of any
Holder of a Note, the Indenture, the Guaranties or the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's or Guarantor's obligations to
Holders of the Notes in case of a merger or consolidation or sale of all or
substantially all of the Company's assets, to make any change that would provide
any additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder, to
comply with the requirements of the Commission in order to effect or maintain
the qualification of the Indenture under the Trust Indenture Act, to provide for
the issuance of Additional Notes in accordance with the limitations set forth in
the Indenture, or to allow any Guarantor to execute a supplemental indenture to
the Indenture and/or Guaranties with respect to the Notes.
12. DEFAULTS AND REMEDIES. Events of Default include: (i)
default for 30 days in the payment when due of interest, on, or Liquidated
Damages with respect to, the Notes whether or not prohibited by Article 10 of
the Indenture; (ii) the default in payment when due of the principal of or
premium, if any, on the Notes, whether or not prohibited by Article 10 of the
Indenture; (iii) failure by the Company or any of its Restricted Subsidiaries to
comply with the provisions of Section 5.01 of the Indenture; (iv) failure by the
Company or any of its Restricted Subsidiaries for 60 days after specified notice
from the Trustee or the Holders of at least 25% of the outstanding principal
amount of the Notes to comply with any of the other agreements in the Indenture
or the Notes; (v) default under any mortgage, indenture or instrument under
which there is issued and outstanding any Indebtedness for money borrowed by the
Company or any of its Restricted Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries) whether such
Indebtedness or guarantee now exists, or is created after the date of the
Indenture, if that default: (A) is caused by a failure to pay principal of, or
interest or premium, if any, on such Indebtedness prior to the expiration of the
grace period provided in such Indebtedness on the date of such default (a
"PAYMENT DEFAULT"); or (B) results in the acceleration of such Indebtedness
prior to its express maturity, and, in each case, the principal amount of any
such Indebtedness, together with the principal amount of any other such
Indebtedness the maturity of which has been so accelerated, aggregates $20.0
million or more; (vi) failure by the Company or any of its Restricted
Subsidiaries to pay final judgments aggregating in excess of $20.0 million,
which judgments are not paid, vacated, discharged or stayed or non-appealable
for a period of 60 days, and in the event such judgment is covered by insurance,
an enforcement proceeding has been commenced by any creditor upon such judgment
or decree which is not promptly stayed; (vii) except as permitted by the
Indenture, any Guaranty shall be held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full force and
effect or any Guarantor, or any Person acting on behalf of any Guarantor, shall
deny or disaffirm its obligations under its Subsidiary Guaranty or DASI, or any
Person acting on behalf of DASI, shall deny or disaffirm its obligations under
the Parent Guaranty; and (viii) certain events of bankruptcy or insolvency with
respect to DASI, the Company or any of its Significant Subsidiaries. If any
Event of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the then outstanding Notes may declare all the
Notes to be due and payable. Notwithstanding the foregoing, in the case of an
Event of Default arising from certain events of bankruptcy or insolvency, all
outstanding Notes will become due and payable without further action or notice.
Holders may not enforce the Indenture or the Notes except as provided in the
Indenture. Subject to certain limitations,
A-6
<PAGE>
Holders of a majority in principal amount of the then outstanding Notes may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of the Notes notice of any continuing Default or Event of
Default (except a Default or Event of Default relating to the payment of
principal or interest or Liquidated Damages) if it determines that withholding
notice is in their interest. The Holders of a majority in aggregate principal
amount of the Notes then outstanding by notice to the Trustee may on behalf of
the Holders of all of the Notes waive any existing Default or Event of Default
and its consequences under the Indenture except a continuing Default or Event of
Default in the payment of interest or Liquidated Damages on, or the principal
of, the Notes. The Company is required to deliver to the Trustee annually a
statement regarding compliance with the Indenture, and the Company is required
upon becoming aware of an Default or Event of Default, to deliver to the Trustee
a statement specifying such Default or Event of Default.
13. SUBORDINATION. Each Holder by accepting a Note agrees that
the Indebtedness evidenced by the Note is subordinated in right of payment, to
the extent and in the manner provided in Article 10 of the Indenture, to the
prior payment in full of all Senior Debt of the Company, including Senior Debt
incurred after the date of the Indenture, and that the subordination is for the
benefit of the holders of Senior Debt.
14. GUARANTIES. The payment of principal of, premium, and
interest and Liquidated Damages, if any, on the Notes are unconditionally
guaranteed, jointly and severally, on a senior subordinated basis by the
Guarantors.
15. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise deal with
the Company or its Affiliates, as if it were not the Trustee.
16. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, of the Company or any Guarantor, as such, shall not
have any liability for any obligations of the Company or the Guarantors under
the Notes, the Indenture, the Subsidiary Guaranties, the Parent Guaranty or for
any claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes.
17. AUTHENTICATION. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
18. ABBREVIATIONS. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
19. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders of
Notes under the Indenture, Holders of Restricted Global Notes and Restricted
Definitive Notes shall have all the rights set forth in the Registration Rights
Agreement, dated as of April 22, 1999, between the Company and the parties named
on the signature pages thereof or, in the case of Additional Notes, Holders of
Restricted Global Notes and Restricted Definitive Notes shall have the rights
set forth in one or more registration rights agreements, if any, between the
Company and the other parties thereto, relating to rights given by
A-7
<PAGE>
the Company to the purchasers of any Additional Notes (collectively, the
"REGISTRATION RIGHTS AGREEMENT").
20. CUSIP AND ISIN NUMBERS. The Company has caused CUSIP and
ISIN, as applicable, numbers to be printed on the Notes and the Trustee may use
CUSIP and ISIN, as applicable, numbers in notices of redemption as a convenience
to Holders. No representation is made as to the accuracy of such numbers either
as printed on the Notes or as contained in any notice of redemption and reliance
may be placed only on the other identification numbers placed thereon.
A-8
<PAGE>
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Dura Operating Corp.
4508 IDS Center
Minneapolis, MN 55402
Telecopier No.: (612) 332-2012
Attention: Scott D. Rued
A-9
<PAGE>
Assignment Form
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to:
- -------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
- -------------------------------------------------------------------------------
Date:
--------------
Your Signature:
------------------------------
(Sign exactly as your name appears on the
face of this Note)
Tax Identification No:
-----------------------
SIGNATURE GUARANTEE:
---------------------------------
Signatures must be guaranteed by an "eligible
guarantor institution" meeting the
requirements of the Registrar, which
requirements include membership or
participation in the Security Transfer Agent
Medallion Program ("STAMP") or such other
"signature guarantee program" as may be
determined by the Registrar in addition to,
or in substitution for, STAMP, all in
accordance with the Securities Exchange Act
of 1934, as amended.
A-10
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the box below:
/ / Section 4.10 / / Section 4.15
If you want to elect to have only part of the Note purchased by
the Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased: $________
Date:
--------------
Your Signature:
-----------------------------
(Sign exactly as your name appears on
the face of this Note)
Tax Identification No:
----------------------
SIGNATURE GUARANTEE:
---------------------------------
Signatures must be guaranteed by an "eligible
guarantor institution" meeting the
requirements of the Registrar, which
requirements include membership or
participation in the Security Transfer Agent
Medallion Program ("STAMP") or such other
"signature guarantee program" as may be
determined by the Registrar in addition to,
or in substitution for, STAMP, all in
accordance with the Securities Exchange Act
of 1934, as amended.
A-11
<PAGE>
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following exchanges of a part of this Global Note for an
interest in another Global Note or for a Definitive Note, or exchanges of a part
of another Global Note or Definitive Note for an interest in this Global Note,
have been made:
<TABLE>
<CAPTION>
Principal Amount
Amount of Amount of increase of this Global Note Signature of
decrease in in Principal following such authorized officer
Principal Amount Amount of this decrease (or of Trustee or Note
Date of Exchange of this Global Note Global Note increase) Custodian
---------------- ------------------- ------------------ ------------------- ------------------
<S> <C> <C> <C> <C>
</TABLE>
A-12
<PAGE>
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Dura Operating Corp.
4508 IDS Center
Minneapolis, MN 55402
Telecopier No.: (612) 332-2012
Attention: Scott D. Rued
U.S. Bank Trust National Association
180 E. 5th Street
St. Paul, Minnesota 55101
Attention: Corporate Trust Administration
Re: 9% SENIOR SUBORDINATED NOTES DUE 2009
Reference is hereby made to the Indenture, dated as of April 22,
1999 (the "INDENTURE"), among Dura Operating Corp., as issuer (the "COMPANY"),
the guarantors party thereto and U.S. Bank Trust National Association, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
______________, (the "TRANSFEROR") owns and proposes to transfer
the Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "TRANSFER"),
to __________ (the "TRANSFEREE"), as further specified in Annex A hereto. In
connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE
144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer is
being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "SECURITIES ACT"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.
2. / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE
REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO REGULATION S. The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and, accordingly, the Transferor hereby
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further certifies that (i) the Transfer is not being made to a person in the
United States and (x) at the time the buy order was originated, the Transferee
was outside the United States or such Transferor and any Person acting on its
behalf reasonably believed and believes that the Transferee was outside the
United States or (y) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S under the Securities Act, (iii) the transaction is not
part of a plan or scheme to evade the registration requirements of the
Securities Act and (iv) if the proposed transfer is being made prior to the
expiration of the Restricted Period, the transfer is not being made to a U.S.
Person or for the account or benefit of a U.S. Person (other than an Initial
Purchaser). Upon consummation of the proposed transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on Transfer enumerated in the Private
Placement Legend printed on the Regulation S Global Note and/or the Definitive
Note and in the Indenture and the Securities Act.
3. / / CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE IAI GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO ANY PROVISION
OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The Transfer is
being effected in compliance with the transfer restrictions applicable to
beneficial interests in Restricted Global Notes and Restricted Definitive Notes
and pursuant to and in accordance with the Securities Act and any applicable
blue sky securities laws of any state of the United States, and accordingly the
Transferor hereby further certifies that (check one):
(a) / / such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act;
or
(b) / / such Transfer is being effected to the Company or a
subsidiary thereof;
or
(c) / / such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act;
or
(d) / / such Transfer is being effected to an Institutional
Accredited Investor and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A, Rule 144 or Rule 904,
and the Transferor hereby further certifies that it has not engaged in any
general solicitation within the meaning of Regulation D under the Securities Act
and the Transfer complies with the transfer restrictions applicable to
beneficial interests in a Restricted Global Note or Restricted Definitive Notes
and the requirements of the exemption claimed, which certification is supported
by (1) a certificate executed by the Transferee in the form of Exhibit D to the
Indenture and (2) if such Transfer is in respect of a principal amount of Notes
at the time of transfer of less than $250,000, an Opinion of Counsel provided by
the Transferor or the Transferee (a copy of which the Transferor has attached to
this certification), to the effect that such Transfer is in compliance with the
Securities Act. Upon
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consummation of the proposed transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the IAI Global Note and/or the Definitive Notes and in the
Indenture and the Securities Act.
4. / / Check if Transferee will take delivery of a beneficial interest in an
Unrestricted Global Note or of an Unrestricted Definitive Note.
(a) / / CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The
Transfer is being effected pursuant to and in accordance with Rule 144 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.
(b) / / CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of any
state of the United States and (ii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Notes, on Restricted Definitive Notes and in the
Indenture.
(c) / / CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i)
The Transfer is being effected pursuant to and in compliance with an exemption
from the registration requirements of the Securities Act other than Rule 144,
Rule 903 or Rule 904 and in compliance with the transfer restrictions contained
in the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company.
---------------------------------
[Insert Name of Transferor]
By:
------------------------------
Name:
Title:
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Dated:___________,______
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<PAGE>
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) / / a beneficial interest in the:
(i) / / 144A Global Note (CUSIP_______), or
(ii) / / Regulation S Global Note (CUSIP_______), or
(b) / / a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) / / a beneficial interest in the:
(i) / / 144A Global Note (CUSIP_______), or
(ii) / / Regulation S Global Note (CUSIP_______), or
(iii) / / Unrestricted Global Note (CUSIP_______); or
(b) / / a Restricted Definitive Note; or
(c) / / an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
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<PAGE>
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Dura Operating Corp.
4508 IDS Center
Minneapolis, Minnesota 55402
Telecopier No.: (612) 332-2012
Attention: Scott D. Rued
U.S. Bank Trust National Association
180 E. 5th Street
St. Paul, Minnesota 55101
Attention: Corporate Trust Department
Re: 9% SENIOR SUBORDINATED NOTES DUE 2009
(CUSIP ______________)
Reference is hereby made to the Indenture, dated as of April 22,
1999 (the "INDENTURE"), among Dura Operating Corp., as issuer (the "COMPANY"),
the guarantors party thereto and U.S. Bank Trust National Association, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
____________, (the "OWNER") owns and proposes to exchange the
Note[s] or interest in such Note[s] specified herein, in the principal amount of
$____________ in such Note[s] or interests (the "EXCHANGE"). In connection with
the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN AN UNRESTRICTED GLOBAL NOTE
(a) / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In
connection with the Exchange of the Owner's beneficial interest in a Restricted
Global Note for a beneficial interest in an Unrestricted Global Note in an equal
principal amount, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner's own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to the
Global Notes and pursuant to and in accordance with the United States Securities
Act of 1933, as amended (the "SECURITIES ACT"), (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
beneficial interest in an Unrestricted Global Note is being acquired in
compliance with any applicable blue sky securities laws of any state of the
United States.
(b) / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for an
Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and
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pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Definitive Note is being acquired in compliance with any applicable blue sky
securities laws of any state of the United States.
(c) / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE
NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with
the Owner's Exchange of a Restricted Definitive Note for a beneficial interest
in an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer, (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(d) / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE
TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN RESTRICTED GLOBAL NOTES
(a) / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for a
Restricted Definitive Note with an equal principal amount, the Owner hereby
certifies that the Restricted Definitive Note is being acquired for the Owner's
own account without transfer. Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the Restricted Definitive Note
issued will continue to be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the Restricted Definitive Note and in
the Indenture and the Securities Act.
(b) / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE
TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the
Exchange of the Owner's Restricted Definitive Note for a beneficial interest in
the [CHECK ONE] / / 144A Global Note, / / Regulation S Global Note, / / IAI
Global Note with an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer and (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Notes and pursuant to
and in accordance with the Securities Act, and in compliance with any applicable
blue sky securities laws of any state of the United States. Upon consummation of
the proposed Exchange in accordance with the terms of the Indenture, the
beneficial interest issued will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the relevant Restricted
Global Note
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<PAGE>
and in the Indenture and the Securities Act.
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<PAGE>
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company.
-----------------------------------
[Insert Name of Owner]
By:
-------------------------------
Name:
Title:
Dated: __________, ____
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<PAGE>
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Dura Operating Corp.
4508 IDS Center
Minneapolis, Minnesota 55402
Telecopier No.: (612) 332-2012
Attention: Scott D. Rued
U.S. Bank Trust National Association
180 E. 5th Street
St. Paul, Minnesota 55101
Attention: Corporate Trust Administration
Re: 9% SENIOR SUBORDINATED NOTES DUE 2009
Reference is hereby made to the Indenture, dated as of April 22,
1999 (the "INDENTURE"), among Dura Operating Corp., as issuer (the "COMPANY"),
the guarantors party thereto and U.S. Bank Trust National Association, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
In connection with our proposed purchase of $____________
aggregate principal amount of:
(a) / / a beneficial interest in a Global Note, or
(b) / / a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or
any interest therein is subject to certain restrictions and conditions set forth
in the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "SECURITIES ACT").
2. We understand that the offer and sale of the Notes have not
been registered under the Securities Act, and that the Notes and any interest
therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we should sell the Notes or any
interest therein, we will do so only (A) to the Company or any subsidiary
thereof, (B) in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (C) to an institutional
"accredited investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to you and to the
Company a signed letter substantially in the form of this letter and, if
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<PAGE>
such transfer is in respect of a principal amount of Notes, at the time of
transfer of less than $250,000, an Opinion of Counsel in form reasonably
acceptable to the Company to the effect that such transfer is in compliance with
the Securities Act, (D) outside the United States in accordance with Rule 904 of
Regulation S under the Securities Act, (E) pursuant to the provisions of Rule
144(k) under the Securities Act or (F) pursuant to an effective registration
statement under the Securities Act, and we further agree to provide to any
person purchasing the Definitive Note or beneficial interest in a Global Note
from us in a transaction meeting the requirements of clauses (A) through (E) of
this paragraph a notice advising such purchaser that resales thereof are
restricted as stated herein.
3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Notes, and
we and any accounts for which we are acting are each able to bear the economic
risk of our or its investment.
5. We are acquiring the Notes or beneficial interest therein
purchased by us for our own account or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
------------------------------------------
[Insert Name of Accredited Investor]
By:
----------------------------------
Name:
Title:
Dated: ___________________,_____
D-2
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EXHIBIT E
FORM OF NOTATION OF GUARANTEE
For value received, each Guarantor (which term includes any
successor Person under the Indenture) has, jointly and severally,
unconditionally guarantied, to the extent set forth in the Indenture and subject
to the provisions in the Indenture, dated as of April 22, 1999 (the
"INDENTURE"), among Dura Operating Corp., the Guarantors party thereto and U.S.
Bank Trust National Association, as trustee (the "TRUSTEE"), (a) the due and
punctual payment of the principal of, premium and Liquidated Damages, if any,
and interest on the Notes (as defined in the Indenture), whether at maturity, by
acceleration, redemption or otherwise, the due and punctual payment of interest
on overdue principal and premium and, to the extent permitted by law, interest,
and the due and punctual performance of all other obligations of the Company to
the Holders or the Trustee all in accordance with the terms of the Indenture and
(b) in case of any extension of time of payment or renewal of any Notes or any
of such other obligations, that the same will be promptly paid in full when due
or performed in accordance with the terms of the extension or renewal, whether
at stated maturity, by acceleration or otherwise. The obligations of the
Guarantors to the Holders of Notes and to the Trustee pursuant to the Guaranty
and the Indenture are expressly set forth in Article 11 of the Indenture and
reference is hereby made to the Indenture for the precise terms of the Guaranty.
The obligations of the Guarantors will be released only in accordance with the
provisions of Article 11 of the Indenture. Each Holder of a Note, by accepting
the same, (a) agrees to and shall be bound by such provisions, (b) authorizes
and directs the Trustee, on behalf of such Holder, to take such action as may be
necessary or appropriate to effectuate the subordination as provided in the
Indenture and (c) appoints the Trustee attorney-in-fact of such Holder for such
purpose; PROVIDED, HOWEVER, that the Indebtedness evidenced by this Guaranty
shall cease to be so subordinated and subject in right of payment upon any
defeasance of this Note in accordance with the provisions of the Indenture.
[Name of Guarantors]
-----------------------------------------
By:
Name:
Title:
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<PAGE>
EXHIBIT F
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS
SUPPLEMENTAL INDENTURE (this "SUPPLEMENTAL INDENTURE"), dated as
of ________________, among __________________ (the "GUARANTEEING SUBSIDIARY"), a
subsidiary of Dura Operating Corp. (or its permitted successor), a Delaware
corporation (the "COMPANY"), the Company, the other Guarantors (as defined in
the Indenture referred to herein) and U.S. Bank National Association, as trustee
under the indenture referred to below (the "TRUSTEE").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "INDENTURE"), dated as of April 22, 1999, providing
for the issuance of an aggregate principal amount of up to $350 million of 9%
Senior Subordinated Notes due 2009 (the "NOTES");
WHEREAS, the Indenture provides that under certain circumstances
the Guaranteeing Subsidiary shall execute and deliver to the Trustee a
supplemental indenture pursuant to which the Guaranteeing Subsidiary shall
unconditionally guarantee all of the Company's Obligations under the Notes and
the Indenture on the terms and conditions set forth herein (the "SUBSIDIARY
GUARANTEE"); and
WHEREAS, pursuant to Section 9.06 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby
agrees as follows:
(a) Along with all Guarantors named in the Indenture, to
jointly and severally Guarantee to each Holder of a Note
authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, the Notes or the
obligations of the Company hereunder or thereunder, that:
(i) the principal of and interest on the Notes will be
promptly paid in full when due, whether at maturity,
by acceleration, redemption or otherwise, and
interest on the overdue principal of and interest on
the Notes, if any, if lawful, and all other
obligations of the Company to the Holders or the
Trustee hereunder or thereunder will be promptly
paid in full or performed, all in accordance with
the terms hereof and thereof; and
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(ii) in case of any extension of time of payment or
renewal of any Notes or any of such other
obligations, that same will be promptly paid in full
when due or performed in accordance with the terms
of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. Failing
payment when due of any amount so guaranteed or any
performance so guaranteed for whatever reason, the
Guarantors shall be jointly and severally obligated
to pay the same immediately.
(b) The obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability
of the Notes or the Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of
the Notes with respect to any provisions hereof or thereof,
the recovery of any judgment against the Company, any
action to enforce the same or any other circumstance which
might otherwise constitute a legal or equitable discharge
or defense of a guarantor.
(c) The following is hereby waived: diligence presentment,
demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right
to require a proceeding first against the Company, protest,
notice and all demands whatsoever.
(d) This Subsidiary Guarantee shall not be discharged except by
complete performance of the obligations contained in the
Notes and the Indenture.
(e) If any Holder or the Trustee is required by any court or
otherwise to return to the Company, the Guarantors, or any
Custodian, trustee, liquidator or other similar official
acting in relation to either the Company or the Guarantors,
any amount paid by either to the Trustee or such Holder,
this Subsidiary Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect.
(f) The Guaranteeing Subsidiary shall not be entitled to any
right of subrogation in relation to the Holders in respect
of any obligations guaranteed hereby until payment in full
of all obligations guaranteed hereby.
(g) As between the Guarantors, on the one hand, and the Holders
and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as
provided in Article 6 of the Indenture for the purposes of
this Subsidiary Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed
hereby, and (y) in the event of any declaration of
acceleration of such obligations as provided in Article 6
of the Indenture, such obligations (whether or not due and
payable) shall forthwith become due and payable by the
Guarantors for the purpose of this Subsidiary Guarantee.
(h) The Guarantors shall have the right to seek contribution
from any non-paying Guarantor so long as the exercise of
such right does not impair the rights of the Holders under
the Guarantee.
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(i) Pursuant to Section 11.03 of the Indenture, after giving
effect to any maximum amount and any other contingent and
fixed liabilities that are relevant under any applicable
Bankruptcy or fraudulent conveyance laws, and after giving
effect to any collections from, rights to receive
contribution from or payments made by or on behalf of any
other Guarantor in respect of the obligations of such other
Guarantor under Article 11 of the Indenture shall result in
the obligations of such Guarantor under its Subsidiary
Guarantee not constituting a fraudulent transfer or
conveyance.
3 EXECUTION AND DELIVERY. Each Guaranteeing Subsidiary agrees
that the Subsidiary Guarantees shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such
Subsidiary Guarantee.
4. GUARANTEEING SUBSIDIARY MAY CONSOLIDATE, ETC. ON CERTAIN
TERMS.
(a) A Guaranteeing Subsidiary may not sell or otherwise dispose of all
or substantially all of its assets to, or consolidate with or
merge with or into (whether or not such Guaranteeing Subsidiary is
the surviving Person) another Person unless:
(i) immediately after giving effect to such transaction, no
Default or Event of Default exists; and
(ii) either:
(A) the Person acquiring the property in any such sale
or disposition or the Person formed by or surviving
any such consolidation or merger assumes all the
obligations of such Guaranteeing Subsidiary under
the Indenture, the Guaranty and the Registration
Rights Agreement, pursuant to a supplemental
indenture satisfactory to the Trustee and
appropriate collateral documents satisfactory to the
Trustee; or
(B) the Net Proceeds of such sale or other disposition
are applied in accordance with the applicable
provisions of the Indenture.
(b) In case of any such consolidation, merger, sale or conveyance and
upon the assumption by the successor Person, by supplemental
indenture, executed and delivered to the Trustee and satisfactory
in form to the Trustee, of the Subsidiary Guarantee endorsed upon
the Notes and the due and punctual performance of all of the
covenants and conditions of the Indenture to be performed by the
Guarantor, such successor corporation shall succeed to and be
substituted for the Guarantor with the same effect as if it had
been named herein as a Guarantor. Such successor corporation
thereupon may cause to be signed any or all of the Subsidiary
Guarantees to be endorsed upon all of the Notes issuable hereunder
which theretofore shall not have been signed by the Company and
delivered to the Trustee. All the Subsidiary Guarantees so issued
shall in all respects have the same legal rank and benefit under
the Indenture as the Subsidiary Guarantees theretofore and
thereafter issued in accordance with the terms of the Indenture as
though all of such Subsidiary Guarantees had been issued at the
date of the execution hereof.
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(c) Except as set forth in Articles 4 and 5 of the Indenture, and
notwithstanding clauses (a) and (b) above, nothing contained in
the Indenture or in any of the Notes shall prevent any
consolidation or merger of a Guarantor with or into the Company or
another Guarantor, or shall prevent any sale or conveyance of the
property of a Guarantor as an entirety or substantially as an
entirety to the Company or another Guarantor.
5. RELEASES.
(a) The Subsidiary Guarantee of a Guarantor will be released (i) in
connection with any sale or other disposition of all or
substantially all of the assets of that Guarantor (including by
way of merger or consolidation), to a Person that is not (either
before or after giving effect to such transaction) a Restricted
Subsidiary of the Company, if the Guarantor applies the Net
Proceeds of that sale or other disposition in accordance with
Section 4.10 of the Indenture; (ii) in connection with any sale of
all of the capital stock of a Guarantor to a person that is not
(either before or after giving effect to such transaction) a
Restricted Subsidiary of the Company, if the Company applies the
Net Proceeds of that sale in accordance with Section 4.10 of the
Indenture; or (iii) if the Company properly designates any
Restricted Subsidiary that is a Guarantor as an Unrestricted
Subsidiary. Upon delivery by the Company to the Trustee of an
Officers' Certificate and an Opinion of Counsel to the effect that
such sale or other disposition was made by the Company in
accordance with the provisions of the Indenture, including without
limitation Section 4.10 of the Indenture, the Trustee shall
execute any documents reasonably required in order to evidence the
release of any Guarantor from its obligations under its Subsidiary
Guarantee.
(b) Any Guarantor not released from its obligations under its
Subsidiary Guarantee shall remain liable for the full amount of
principal of and interest on the Notes and for the other
obligations of any Guarantor under the Indenture as provided in
Article 11 of the Indenture.
6. NO RECOURSE AGAINST OTHERS. No past, present or future
director, officer, employee, incorporator, stockholder or agent of the
Guaranteeing Subsidiary, as such, shall have any liability for any obligations
of the Company or any Guaranteeing Subsidiary under the Notes, any Subsidiary
Guarantees, the Indenture or this Supplemental Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each
Holder of the Notes by accepting a Note waives and releases all such liability.
The waiver and release are part of the consideration for issuance of the Notes.
Such waiver may not be effective to waive liabilities under the federal
securities laws and it is the view of the Commission that such a waiver is
against public policy.
7. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF
NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT
WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT
THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.
8. COUNTERPARTS. The parties may sign any number of copies of
this Supplemental Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
F-4
<PAGE>
9. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.
10 THE TRUSTEE. The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Guaranteeing Subsidiary and the
Company.
F-5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed and attested, all as of the date
first above written.
Dated:_______________,______
[GUARANTEEING SUBSIDIARY]
By:
---------------------
Name:
Title:
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee
By:
---------------------
Name:
Title:
F-6
<PAGE>
EXECUTION COPY
--------------
- --------------------------------------------------------------------------------
------------------------------
DURA OPERATING CORP.
SERIES A AND SERIES B
9% SENIOR SUBORDINATED NOTES DUE 2009
--------------------------
INDENTURE
Dated as of April 22, 1999
--------------------------
- --------------------------------------------------------------------------------
U.S. BANK TRUST NATIONAL ASSOCIATION,
Trustee
----------------
<PAGE>
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
ACT SECTION INDENTURE SECTION
<S> <C>
310 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(i)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(ii)(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(iii(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.05
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.03
(iv)(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.03
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.07
(v)(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06;
11.02
(vi)(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.03;
11.02
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.04
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.04
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(vii)(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.05
(f). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NA
315 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.05,
11.02
(A)(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01
(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01
(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
316 (a)(last sentence) . . . . . . . . . . . . . . . . . . . . . . . . . 2.09
(a)(1)(A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.05
(a)(1)(B). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.04
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.07
(B)(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.12
317 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.08
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.09
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
318 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
</TABLE>
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE. . . . . . . . . . . 1
Section 1.01. Definitions.. . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02. Other Definitions.. . . . . . . . . . . . . . . . . . . . .21
Section 1.03. Trust Indenture Act Definitions.. . . . . . . . . . . . . .22
Section 1.04. Rules of Construction.. . . . . . . . . . . . . . . . . . .22
ARTICLE 2. THE NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . .23
Section 2.01. Form and Dating.. . . . . . . . . . . . . . . . . . . . . .23
Section 2.02. Execution and Authentication. . . . . . . . . . . . . . . .23
Section 2.03. Registrar and Paying Agent. . . . . . . . . . . . . . . . .24
Section 2.04. Paying Agent to Hold Money in Trust.. . . . . . . . . . . .24
Section 2.05. Holder Lists. . . . . . . . . . . . . . . . . . . . . . . .25
Section 2.06. Transfer and Exchange.. . . . . . . . . . . . . . . . . . .25
Section 2.07. Replacement Notes.. . . . . . . . . . . . . . . . . . . . .36
Section 2.08. Outstanding Notes.. . . . . . . . . . . . . . . . . . . . .36
Section 2.09. Treasury Notes. . . . . . . . . . . . . . . . . . . . . . .37
Section 2.10. Temporary Notes.. . . . . . . . . . . . . . . . . . . . . .37
Section 2.11. Cancellation. . . . . . . . . . . . . . . . . . . . . . . .37
Section 2.12. Defaulted Interest. . . . . . . . . . . . . . . . . . . . .37
Section 2.13. CUSIP and ISIN Numbers. . . . . . . . . . . . . . . . . . .37
ARTICLE 3. REDEMPTION AND PREPAYMENT . . . . . . . . . . . . . . . . . . .38
Section 3.01. Notices to Trustee. . . . . . . . . . . . . . . . . . . . .38
Section 3.02. Selection of Notes to Be Redeemed.. . . . . . . . . . . . .38
Section 3.03. Notice of Redemption. . . . . . . . . . . . . . . . . . . .38
Section 3.04. Effect of Notice of Redemption. . . . . . . . . . . . . . .39
Section 3.05. Deposit of Redemption Price.. . . . . . . . . . . . . . . .39
Section 3.06. Notes Redeemed in Part. . . . . . . . . . . . . . . . . . .40
Section 3.07. Optional Redemption.. . . . . . . . . . . . . . . . . . . .40
Section 3.08. Mandatory Redemption. . . . . . . . . . . . . . . . . . . .40
Section 3.09. Offer to Purchase by Application of Excess Proceeds.. . . .41
ARTICLE 4. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . .42
Section 4.01. Payment of Notes. . . . . . . . . . . . . . . . . . . . . .42
Section 4.02. Maintenance of Office or Agency.. . . . . . . . . . . . . .43
Section 4.03. Reports.. . . . . . . . . . . . . . . . . . . . . . . . . .43
Section 4.04. Compliance Certificate. . . . . . . . . . . . . . . . . . .44
Section 4.05. Taxes.. . . . . . . . . . . . . . . . . . . . . . . . . . .45
Section 4.06. Stay, Extension and Usury Laws. . . . . . . . . . . . . . .45
Section 4.07. Restricted Payments.. . . . . . . . . . . . . . . . . . . .45
Section 4.08. Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries.. . . . . . . . . . . . . . . . . .48
Section 4.09. Incurrence of Indebtedness and Issuance of
Preferred Stock.. . . . . . . . . . . . . . . . . . . . . .49
Section 4.10. Asset Sales.. . . . . . . . . . . . . . . . . . . . . . . .52
Section 4.11. Transactions with Affiliates. . . . . . . . . . . . . . . .54
Section 4.12. Liens.. . . . . . . . . . . . . . . . . . . . . . . . . . .55
Section 4.13. Limitation on Foreign Indebtedness. . . . . . . . . . . . .56
i
<PAGE>
Section 4.14. Corporate Existence.. . . . . . . . . . . . . . . . . . . .56
Section 4.15. Offer to Repurchase Upon Change of Control. . . . . . . . .57
Section 4.16. No Senior Subordinated Debt.. . . . . . . . . . . . . . . .58
Section 4.17. Additional Subsidiary Guaranties. . . . . . . . . . . . . .58
Section 4.18. Designation of Restricted and Unrestricted Subsidiaries.. .58
Section 4.19. Payments for Consent. . . . . . . . . . . . . . . . . . . .58
ARTICLE 5. SUCCESSORS. . . . . . . . . . . . . . . . . . . . . . . . . . .59
Section 5.01. Merger, Consolidation, or Sale of Assets. . . . . . . . . .59
Section 5.02. Successor Corporation Substituted.. . . . . . . . . . . . .59
ARTICLE 6. DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . .60
Section 6.01. Events of Default.. . . . . . . . . . . . . . . . . . . . .60
Section 6.02. Acceleration. . . . . . . . . . . . . . . . . . . . . . . .61
Section 6.03. Other Remedies. . . . . . . . . . . . . . . . . . . . . . .62
Section 6.04. Waiver of Past Defaults.. . . . . . . . . . . . . . . . . .62
Section 6.05. Control by Majority.. . . . . . . . . . . . . . . . . . . .62
Section 6.06. Limitation on Suits.. . . . . . . . . . . . . . . . . . . .62
Section 6.07. Rights of Holders of Notes to Receive Payment.. . . . . . .63
Section 6.08. Collection Suit by Trustee. . . . . . . . . . . . . . . . .63
Section 6.09. Trustee May File Proofs of Claim. . . . . . . . . . . . . .63
Section 6.10. Priorities. . . . . . . . . . . . . . . . . . . . . . . . .64
Section 6.11. Undertaking for Costs.. . . . . . . . . . . . . . . . . . .64
ARTICLE 7. TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . .64
Section 7.01. Duties of Trustee.. . . . . . . . . . . . . . . . . . . . .64
Section 7.02. Rights of Trustee.. . . . . . . . . . . . . . . . . . . . .65
Section 7.03. Individual Rights of Trustee. . . . . . . . . . . . . . . .66
Section 7.04. Trustee's Disclaimer. . . . . . . . . . . . . . . . . . . .66
Section 7.05. Notice of Defaults. . . . . . . . . . . . . . . . . . . . .66
Section 7.06. Reports by Trustee to Holders of the Notes. . . . . . . . .66
Section 7.07. Compensation and Indemnity. . . . . . . . . . . . . . . . .67
Section 7.08. Replacement of Trustee. . . . . . . . . . . . . . . . . . .68
Section 7.09. Successor Trustee by Merger, etc. . . . . . . . . . . . . .68
Section 7.10. Eligibility; Disqualification.. . . . . . . . . . . . . . .69
Section 7.11. Preferential Collection of Claims Against Company.. . . . .69
ARTICLE 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE. . . . . . . . . . . .69
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance. .69
Section 8.02. Legal Defeasance and Discharge. . . . . . . . . . . . . . .69
Section 8.03. Covenant Defeasance.. . . . . . . . . . . . . . . . . . . .70
Section 8.04. Conditions to Legal or Covenant Defeasance. . . . . . . . .70
Section 8.05. Deposited Money and Government Securities to be Held in
Trust; Other Miscellaneous Provisions.. . . . . . . . . . .71
Section 8.06. Repayment to Company. . . . . . . . . . . . . . . . . . . .72
Section 8.07. Reinstatement.. . . . . . . . . . . . . . . . . . . . . . .72
ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER. . . . . . . . . . . . . . . .72
Section 9.01. Without Consent of Holders of Notes.. . . . . . . . . . . .72
Section 9.02. With Consent of Holders of Notes. . . . . . . . . . . . . .73
Section 9.03. Compliance with Trust Indenture Act.. . . . . . . . . . . .74
ii
<PAGE>
Section 9.04. Revocation and Effect of Consents.. . . . . . . . . . . . .75
Section 9.05. Notation on or Exchange of Notes. . . . . . . . . . . . . .75
Section 9.06. Trustee to Sign Amendments, etc.. . . . . . . . . . . . . .75
ARTICLE 10. SUBORDINATION. . . . . . . . . . . . . . . . . . . . . . . . .75
Section 10.01. Agreement to Subordinate. . . . . . . . . . . . . . . . . .75
Section 10.02. Liquidation; Dissolution; Bankruptcy. . . . . . . . . . . .75
Section 10.03. Default on Designated Senior Debt.. . . . . . . . . . . . .76
Section 10.04. Acceleration of Notes.. . . . . . . . . . . . . . . . . . .76
Section 10.05. When Distribution Must Be Paid Over.. . . . . . . . . . . .77
Section 10.06. Notice by Company.. . . . . . . . . . . . . . . . . . . . .77
Section 10.07. Subrogation.. . . . . . . . . . . . . . . . . . . . . . . .77
Section 10.08. Relative Rights.. . . . . . . . . . . . . . . . . . . . . .77
Section 10.09. Subordination May Not Be Impaired by Company. . . . . . . .78
Section 10.10. Distribution or Notice to Representative. . . . . . . . . .78
Section 10.11. Rights of Trustee and Paying Agent. . . . . . . . . . . . .78
Section 10.12. Authorization to Effect Subordination.. . . . . . . . . . .78
Section 10.13. Amendments. . . . . . . . . . . . . . . . . . . . . . . . .79
ARTICLE 11. GUARANTIES . . . . . . . . . . . . . . . . . . . . . . . . . .79
Section 11.01. Guaranty. . . . . . . . . . . . . . . . . . . . . . . . . .79
Section 11.02. Subordination of Guaranty.. . . . . . . . . . . . . . . . .80
Section 11.03. Limitation on Guarantor Liability.. . . . . . . . . . . . .80
Section 11.04. Execution and Delivery of Guaranty. . . . . . . . . . . . .80
Section 11.05. Guarantors May Consolidate, etc., on Certain Terms. . . . .81
Section 11.06. Releases Following Sale of Assets.. . . . . . . . . . . . .81
ARTICLE 12. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . .82
Section 12.01. Trust Indenture Act Controls. . . . . . . . . . . . . . . .82
Section 12.02. Notices.. . . . . . . . . . . . . . . . . . . . . . . . . .82
Section 12.03. Communication by Holders of Notes with Other Holders of
Notes.. . . . . . . . . . . . . . . . . . . . . . . . . . .83
Section 12.04. Certificate and Opinion as to Conditions Precedent. . . . .83
Section 12.05. Statements Required in Certificate or Opinion.. . . . . . .84
Section 12.06. Rules by Trustee and Agents.. . . . . . . . . . . . . . . .84
Section 12.07. No Personal Liability of Directors, Officers, Employees and
Stockholders. . . . . . . . . . . . . . . . . . . . . . . .84
Section 12.08. Governing Law.. . . . . . . . . . . . . . . . . . . . . . .84
Section 12.09. No Adverse Interpretation of Other Agreements.. . . . . . .85
Section 12.10. Successors. . . . . . . . . . . . . . . . . . . . . . . . .85
Section 12.11. Severability. . . . . . . . . . . . . . . . . . . . . . . .85
Section 12.12. Counterpart Originals.. . . . . . . . . . . . . . . . . . .85
Section 12.13. Table of Contents, Headings, etc. . . . . . . . . . . . . .85
</TABLE>
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED
INVESTOR
Exhibit E FORM OF NOTATION OF GUARANTEE
Exhibit F FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY SUBSEQUENT
GUARANTORS
iii
<PAGE>
INDENTURE dated as of April 22, 1999 between Dura Operating
Corp., a Delaware corporation (the "Company"), the Guarantors signatories hereto
and U.S. Bank Trust National Association, as trustee (the "Trustee").
The Company, the Guarantors and the Trustee agree as follows for
the benefit of each other and for the equal and ratable benefit of the Holders
of the 9% Series A Senior Subordinated Notes due 2009 (the "Series A Notes") and
the 9% Series B Senior Subordinated Notes due 2009 (the "Series B Notes" and,
together with the Series A Notes, the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"144A GLOBAL NOTE" means a global note substantially in the form
of Exhibit A hereto bearing the Global Note Legend and the Private Placement
Legend and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount of the Notes sold in reliance on Rule 144A.
"ACQUIRED DEBT" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such
other Person is merged with or into or became a Subsidiary of such specified
Person, whether or not such Indebtedness is incurred in connection with, or in
contemplation of, such other Person merging with or into, or becoming a
Subsidiary of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset
acquired by such specified Person.
"ADDITIONAL NOTES" means up to E50 million in aggregate
principal amount of Notes (other than the Initial Notes) issued under this
Indenture in accordance with Sections 2.02 and 4.09 hereof.
"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 purposes of this definition,
"control," as used with respect to any Person, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the ownership of voting
securities, by agreement or otherwise; PROVIDED, that beneficial ownership of
10% or more of the Voting Stock of a Person shall be deemed to be control. For
purposes of this definition, the terms "controlling," "controlled by" and "under
common control with" shall have correlative meanings.
"AGENT" means any Registrar, Paying Agent or co-registrar.
"APPLICABLE PROCEDURES" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depositary, Euroclear and Cedelbank that apply to such
transfer or exchange.
"ASSET SALE" means:
1
<PAGE>
(1) the sale, lease, conveyance or other disposition of any
assets or rights, other than sales or leases in the ordinary course of business
consistent with past practices; PROVIDED that the sale, conveyance or other
disposition of all or substantially all of the assets of the Company and its
Subsidiaries taken as a whole will be governed by the provisions of this
Indenture described in Section 4.15 hereof and/or the provisions described in
Section 5.01 hereof and not by the provisions of Section 4.10 hereof; and
(2) the issuance of Equity Interests by any of the Company's
Restricted Subsidiaries or the sale of Equity Interests in any of its
Subsidiaries.
Notwithstanding the preceding, the following items shall not be
deemed to be Asset Sales:
(1) any single transaction or series of related transactions
that involves assets having a fair market value of less than $5.0 million;
(2) a transfer of assets between or among the Company and its
Restricted Subsidiaries;
(3) an issuance of Equity Interests by a Restricted Subsidiary
to the Company or to another Restricted Subsidiary;
(4) the sale, lease or license of property, plant, equipment,
inventory, accounts receivable or other assets in the ordinary course of
business;
(5) the sale or other disposition of cash or Cash Equivalents;
(6) a Restricted Payment or Permitted Investment that is
permitted by Section 4.07 hereof;
(7) the licensing of intellectual property; and
(8) sales of receivables and related assets (including contract
rights) of the type specified in the definition of "Qualified Securitization
Transaction" to a Securitization Entity for the fair market value thereof,
including consideration in the amount specified in the proviso to the definition
of Qualified Securitization Transaction.
"BANKRUPTCY LAW" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors.
"BENEFICIAL OWNER" has the meaning assigned to such term in Rule
13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the
beneficial ownership of any particular "person" (as that term is used in Section
13(d)(3) of the Exchange Act), such "person" shall be deemed to have beneficial
ownership of all securities that such "person" has the right to acquire by
conversion or exercise of other securities, whether such right is currently
exercisable or is exercisable only upon the occurrence of a subsequent
condition. The terms "Beneficially Owns" and "Beneficially Owned" shall have a
corresponding meaning.
"BOARD OF DIRECTORS" means:
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(1) with respect to a corporation, the board of directors of
the corporation;
(2) with respect to a partnership, the Board of Directors of
the general partner of the partnership; and
(3) with respect to any other Person, the board or committee of
such Person serving a similar function.
"BROKER-DEALER" has the meaning set forth in the Registration
Rights Agreement.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CAPITAL LEASE OBLIGATION" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital lease
that would at that time be required to be capitalized on a balance sheet in
accordance with GAAP.
"CAPITAL STOCK" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents (however
designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and
(4) any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"CASH EQUIVALENTS" means:
(1) United States dollars;
(2) securities issued or directly and fully guaranteed or
insured by the United States government or any agency or instrumentality thereof
(PROVIDED that the full faith and credit of the United States is pledged in
support thereof) having maturities of not more than twelve months from the date
of acquisition;
(3) certificates of deposit and eurodollar time deposits with
maturities of twelve months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding six months and overnight bank
deposits, in each case, with any lender party to the Credit Agreement or, with
any domestic commercial bank having capital and surplus in excess of $500.0
million and a Thompson Bank Watch Rating of "B" or better;
(4) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clauses (2) and (3)
above entered into with any financial institution meeting the qualifications
specified in clause (3) above;
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(5) commercial paper having the highest rating obtainable from
Moody's Investors Service, Inc. or Standard & Poor's Rating Service and in each
case maturing within twelve months after the date of acquisition;
(6) money market funds at least 95% of the assets of which
constitute Cash Equivalents of the kinds described in clauses (1) through (5) of
this definition; and
(7) Indebtedness with a rating of "A" or higher from Standard &
Poor's Rating Service or "A-2" or higher from Moody's Investors Service, Inc.
"CEDELBANK" means Cedelbank.
"CHANGE OF CONTROL" means the occurrence of any of the
following:
(1) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a series
of related transactions, of all or substantially all of the properties or assets
of the Company and its Restricted Subsidiaries taken as a whole to any "person"
(as that term is used in Section 13(d)(3) of the Exchange Act) other than a
Principal or a Related Party of a Principal;
(2) the adoption of a plan relating to the liquidation or
dissolution of the Company;
(3) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" (as defined above), other than the Principals and their Related
Parties, becomes the Beneficial Owner, directly or indirectly, of more than 50%
of the Voting Stock of the Company, measured by voting power rather than number
of shares;
(4) the first day on which a majority of the members of the
Board of Directors of the Company are not Continuing Directors;
(5) the first day on which DASI ceases to own 100% of the
outstanding Equity Interests of the Company; or
(6) the Company consolidates with, or merges with or into, any
Person, or any Person consolidates with, or merges with or into, the Company, in
any such event pursuant to a transaction in which any of the outstanding Voting
Stock of the Company or such other Person is converted into or exchanged for
cash, securities or other property, other than any such transaction where the
Voting Stock of the Company outstanding immediately prior to such transaction is
converted into or exchanged for Voting Stock (other than Disqualified Stock) of
the surviving or transferee Person constituting a majority of the outstanding
shares of such Voting Stock of such surviving or transferee Person (immediately
after giving effect to such issuance).
"COMPANY" means Dura Operating Corp., and any and all successors
thereto.
"CONSOLIDATED CASH FLOW" means, with respect to any specified
Person for any period, the Consolidated Net Income of such Person for such
period PLUS:
(1) an amount equal to any extraordinary loss plus any net loss
realized by such Person
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or any of its Subsidiaries in connection with an Asset Sale, to the extent such
losses were deducted in computing such Consolidated Net Income; PLUS
(2) provision for taxes based on income or profits of such
Person and its Subsidiaries for such period, to the extent that such provision
for taxes was deducted in computing such Consolidated Net Income; PLUS
(3) consolidated interest expense of such Person and its
Subsidiaries for such period, whether paid or accrued and whether or not
capitalized (including, without limitation, amortization of debt issuance costs
and original issue discount, non-cash interest payments, the interest component
of any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, commissions, discounts and other fees
and charges incurred in respect of letter of credit or bankers' acceptance
financings, and net of the effect of all payments made or received pursuant to
Hedging Obligations), to the extent that any such expense was deducted in
computing such Consolidated Net Income; PLUS
(4) depreciation, amortization (including amortization of
goodwill and other intangibles but excluding amortization of prepaid cash
expenses that were paid in a prior period) and other non-cash expenses
(excluding any such non-cash expense to the extent that it represents an accrual
of or reserve for cash expenses in any future period or amortization of a
prepaid cash expense that was paid in a prior period) of such Person and its
Subsidiaries for such period to the extent that such depreciation, amortization
and other non-cash expenses were deducted in computing such Consolidated Net
Income; MINUS
(5) non-cash items increasing such Consolidated Net Income for
such period, other than the accrual of revenue in the ordinary course of
business, in each case, on a consolidated basis and determined in accordance
with GAAP.
Notwithstanding the preceding, the provision for taxes based on
the income or profits of, and the depreciation and amortization and other
non-cash expenses of, a Subsidiary of the Company shall be added to Consolidated
Net Income to compute Consolidated Cash Flow of the Company only to the extent
that a corresponding amount would be permitted at the date of determination to
be dividended to the Company by such Subsidiary without prior governmental
approval (that has not been obtained), and without direct or indirect
restriction pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to that Subsidiary or its stockholders.
"CONSOLIDATED NET INCOME" means, with respect to any specified
Person for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; PROVIDED that:
(1) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the specified Person or a Wholly Owned Restricted
Subsidiary thereof;
(2) the Net Income of any Restricted Subsidiary shall be
excluded to the extent that
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the declaration or payment of dividends or similar distributions by that
Restricted Subsidiary of that Net Income is not at the date of determination
permitted without any prior governmental approval (that has not been obtained)
or, directly or indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Restricted Subsidiary or its stockholders;
(3) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition shall
be excluded;
(4) the cumulative effect of a change in accounting principles
shall be excluded; and
(5) the Net Income (but not loss) of any Unrestricted
Subsidiary shall be excluded, whether or not distributed to the specified Person
or one of its Subsidiaries.
"CONTINUING DIRECTORS" means, as of any date of determination,
any member of the Board of Directors of the Company who:
(1) was a member of such Board of Directors on the date of this
Indenture; or
(2) was nominated for election or elected to such Board of
Directors with the approval of a majority of the Continuing Directors who were
members of such Board at the time of such nomination or election.
"CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the address
of the Trustee specified in Section 12.02 hereof or such other address as to
which the Trustee may give notice to the Company.
"CREDIT AGREEMENT" means that certain Amended and Restated
Credit Agreement, dated as of March 19, 1999, by and among the Company, DASI and
various direct and indirect wholly owned Subsidiaries of DASI and Bank of
America National Trust and Savings Association as a lender and as agent, and
certain other lenders, providing for up to $1,150 million of aggregate
borrowings, including any related notes, guarantees, collateral documents,
instruments and agreements executed in connection therewith, and in each case as
amended, modified, renewed, refunded, replaced or refinanced from time to time.
"CREDIT FACILITIES" means, one or more debt facilities
(including, without limitation, the Credit Agreement) or commercial paper
facilities, in each case with banks or other institutional lenders providing for
revolving credit loans, term loans, receivables financing (including through the
sale of receivables to such lenders or to special purpose entities formed to
borrow from such lenders against such receivables) or letters of credit, in each
case, as amended, restated, modified, renewed, refunded, replaced or refinanced
in whole or in part from time to time.
"CUSTODIAN" means the Trustee, as custodian with respect to the
Notes in global form, or any successor entity thereto.
"DASI" means Dura Automotive Systems, Inc., a Delaware
corporation, and any and all successors thereto.
"DEFAULT" means any event that is, or with the passage of time
or the giving of notice or
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both would be, an Event of Default.
"DEFINITIVE NOTE" means a certificated Note registered in the
name of the Holder thereof and issued in accordance with Section 2.06 hereof, in
the form of Exhibit A hereto except that such Note shall not bear the Global
Note Legend and shall not have the "Schedule of Exchanges of Interests in the
Global Note" attached thereto.
"DEPOSITARY" means, with respect to the Notes issuable or issued
in whole or in part in global form, the Person or Persons specified in Section
2.03 hereof as the Depositary with respect to the Notes, and any and all
successors thereto appointed as depositary hereunder and having become such
pursuant to the applicable provision of this Indenture.
"DESIGNATED NONCASH CONSIDERATION" means any non-cash
consideration (other than non-cash consideration that would constitute a
Restricted Investment) received by the Company or one of its Restricted
Subsidiaries in connection with an Asset Disposition that is so designated as
Designated Noncash Consideration pursuant to an Officers' Certificate executed
by the principal executive officer and the principal financial officer of the
Company or such Restricted Subsidiary. Such Officers' Certificate shall state
the basis of such valuation, which shall be a report of a nationally recognized
investment banking firm with respect to the receipt in one or a series of
related transactions of Designated Noncash Consideration with a fair market
value in excess of $5.0 million.
"DESIGNATED PREFERRED STOCK" means preferred stock that is so
designated as Designated Preferred Stock, pursuant to an Officers' Certificate
executed by the principal executive officer and the principal financial officer
of the Company, on the issuance date thereof, the cash proceeds of which are
excluded from the calculation set forth in clause (iii)(B) of the first
paragraph of Section 4.07 hereof.
"DESIGNATED SENIOR DEBT" means:
(1) any Indebtedness outstanding under the Credit Agreement;
and
(2) after payment in full of all Obligations under the Credit
Agreement, any other Senior Debt of the Company permitted under this Indenture
the principal amount of which is $20.0 million or more and that has been
designated by the Company as "Designated Senior Debt."
"DISQUALIFIED STOCK" means 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, in each case at the option of the holder thereof), 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, on or prior to the date that is 91 days after the
date on which the Notes mature. Notwithstanding the preceding sentence, any
Capital Stock that would constitute Disqualified Stock solely because the
holders thereof have the right to require the Company to repurchase such Capital
Stock upon the occurrence of a change of control or an asset sale shall not
constitute Disqualified Stock if the terms of such Capital Stock provide that
the Company may not repurchase or redeem any such Capital Stock pursuant to such
provisions unless such repurchase or redemption complies with Section 4.07
hereof.
"DOMESTIC RESTRICTED SUBSIDIARY" means any Restricted Subsidiary
that was formed under the laws of the United States or any state thereof or the
District of Columbia.
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"EQUITY INTERESTS" means Capital Stock and all warrants, options
or other rights to acquire Capital Stock (but excluding any debt security that
is convertible into, or exchangeable for, Capital Stock).
"EQUITY OFFERING" means an offering by the Company or DASI of
shares of its Common Stock (however designated and whether voting or non-voting)
and any and all rights, warrants or options to acquire such Common Stock;
provided that, in the event of any Equity Offering by DASI, DASI contributes to
the common equity capital of the Company (other than as Disqualified Stock) the
net cash proceeds of such Equity Offering.
"EUROCLEAR" means Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear system.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXCHANGE NOTES" means the Notes issued in the Exchange Offer
pursuant to Section 2.06(f) hereof.
"EXCHANGE OFFER" has the meaning set forth in the Registration
Rights Agreement.
"EXCHANGE OFFER REGISTRATION STATEMENT" has the meaning set
forth in the Registration Rights Agreement.
"EXISTING INDEBTEDNESS" means the aggregate principal amount of
Indebtedness of the Company and its Subsidiaries (other than Indebtedness under
the Credit Agreement) in existence on the date of this Indenture, until such
amounts are repaid.
"FIXED CHARGES" means, with respect to any specified Person for
any period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued, including,
without limitation, original issue discount, non-cash interest payments, the
interest component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, commissions,
discounts and other fees and charges incurred in respect of letter of credit or
bankers' acceptance financings, and net of the effect of all payments made or
received pursuant to Hedging Obligations; PLUS
(2) the consolidated interest of such Person and its Restricted
Subsidiaries that was capitalized during such period; PLUS
(3) any interest expense on Indebtedness of another Person that
is guaranteed by such Person or any one of its Restricted Subsidiaries or
secured by a Lien on assets of such Person or any one of its Restricted
Subsidiaries, whether or not such guaranty or Lien is called upon; PLUS
(4) the product of (a) all dividends, whether paid or accrued
and whether or not in cash, on any series of preferred stock of such Person or
any of its Restricted Subsidiaries, other than dividends on Equity Interests
payable solely in Equity Interests of the Company (other than Disqualified
Stock) or to the Company or a Restricted Subsidiary of the Company, times (b) a
fraction, the numerator of which
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is one and the denominator of which is one minus the then current combined
federal, state and local statutory tax rate of such Person, expressed as a
decimal, in each case, on a consolidated basis and in accordance with GAAP.
"FIXED CHARGE COVERAGE RATIO" means, with respect to any
specified Person and its Restricted Subsidiaries for any period, the ratio of
the Consolidated Cash Flow of such Person for such period to the Fixed Charges
of such Person for such period. In the event that the specified Person or any
of its Restricted Subsidiaries incurs, assumes, guarantees, repays, repurchases
or redeems any Indebtedness (other than ordinary working capital borrowings) or
issues, repurchases or redeems preferred stock subsequent to the commencement of
the period for which the Fixed Charge Coverage Ratio is being calculated and on
or prior to the date on which the event for which the calculation of the Fixed
Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge
Coverage Ratio shall be calculated giving pro forma effect to such incurrence,
assumption, guaranty, repayment, repurchase or redemption of Indebtedness, or
such issuance, repurchase or redemption of preferred stock, and the use of the
proceeds therefrom as if the same had occurred at the beginning of the
applicable four-quarter reference period.
In addition, for purposes of calculating the Fixed Charge
Coverage Ratio:
(1) acquisitions that have been made by the specified Person or
any of its Restricted Subsidiaries, including through mergers or consolidations
and including any related financing transactions, during the four-quarter
reference period or subsequent to such reference period and on or prior to the
Calculation Date shall be given pro forma effect as if they had occurred on the
first day of the four-quarter reference period and Consolidated Cash Flow for
such reference period shall be calculated on a pro forma basis in accordance
with Regulation S-X under the Securities Act (giving effect to any Pro Forma
Cost Savings), but without giving effect to clause (3) of the proviso set forth
in the definition of Consolidated Net Income;
(2) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, shall be excluded; and
(3) the Fixed Charges attributable to discontinued operations,
as determined in accordance with GAAP, and operations or businesses disposed of
prior to the Calculation Date, shall be excluded, but only to the extent that
the obligations giving rise to such Fixed Charges will not be obligations of the
specified Person or any of its Restricted Subsidiaries following the Calculation
Date.
"GAAP" means generally accepted accounting principles set forth
in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect as of the date hereof.
"GLOBAL NOTES" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, substantially in the
form of Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(iv),
2.06(d)(ii) or 2.06(f) hereof.
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"GLOBAL NOTE LEGEND" means the legend set forth in Section
2.06(g)(ii), which is required to be placed on all Global Notes issued under
this Indenture.
"GOVERNMENT SECURITIES" means direct obligations of, or
obligations guaranteed by, the United States of America, and the payment for
which the United States pledges its full faith and credit.
"guaranty" means a guarantee other than by endorsement of
negotiable instruments for collection in the ordinary course of business, direct
or indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"GUARANTY" means (i) the guarantee of the Notes by DASI and
certain of the Domestic Restricted Subsidiaries of the Company; and (ii) the
guarantee of the Notes by any Restricted Subsidiary required under the terms of
Section 4.17 hereof.
"GUARANTORS" means each of:
(1) DASI; Dura Automotive Systems, Inc. Column Shifter
Operations; Universal Tool & Stamping Company, Inc.; Dura. Automotive Systems
Cable Operations, Inc.; Adwest Electronics, Inc.; Adwest Western Automotive,
Inc.; X.E. Co.; Excel of Tennessee, L.P.; Excel Corporation; Excel Industries of
Michigan, Inc.; Anderson Industries, Inc.; Hydro Flame Corporation; Atwood
Industries, Inc.; Atwood Automotive Inc.; Mark I Molded Plastics, Inc.; and Mark
I Molded Plastics of Tennessee, Inc.; and
(2) any other subsidiary that executes a Guaranty in accordance
with the provisions of this Indenture;
and their respective successors and assigns.
"HEDGING OBLIGATIONS" means, with respect to any specified
Person, the obligations of such Person under:
(1) interest rate swap agreements, interest rate cap agreements
and interest rate collar agreements; and
(2) other agreements or arrangements designed to protect such
Person against fluctuations in interest rates and currency values.
"HOLDER" means a Person in whose name a Note is registered.
"IAI GLOBAL NOTE" means the Global Note substantially in the
form of Exhibit A hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of and registered in the name
of the Depositary or its nominee that will be issued in a denomination equal to
the outstanding principal amount of the Notes held by Institutional Accredited
Investors.
"INDEBTEDNESS" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent, in respect of:
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(1) borrowed money;
(2) evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in respect
thereof);
(3) banker's acceptances;
(4) representing Capital Lease Obligations;
(5) the balance deferred and unpaid of the purchase price of
any property, except any such balance that constitutes an accrued expense or
trade payable; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than
letters of credit and Hedging Obligations) would appear as a liability upon a
balance sheet of the specified Person prepared in accordance with GAAP. In
addition, the term "Indebtedness" includes all Indebtedness of others secured by
a Lien on any asset of the specified Person (whether or not such Indebtedness is
assumed by the specified Person) and, to the extent not otherwise included, the
guaranty by the specified Person of any Indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date shall
be:
(1) the accreted value thereof, in the case of any Indebtedness
issued with original issue discount; and
(2) the principal amount thereof, together with any interest
thereon that is more than 30 days past due, in the case of any other
Indebtedness.
"INDENTURE" means this Indenture, as amended or supplemented
from time to time.
"INDIRECT PARTICIPANT" means a Person who holds a beneficial
interest in a Global Note through a Participant.
"INITIAL NOTES" means E100 million in aggregate principal amount
of Notes originally issued under this Indenture on the date hereof.
"INSTITUTIONAL ACCREDITED INVESTOR" means an institution that is
an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.
"INVESTMENTS" means, with respect to any Person, all direct or
indirect investments by such Person in other Persons (including Affiliates) in
the forms of loans (including guaranties or other obligations), advances or
capital contributions (excluding commissions, travel and similar advances to
officers and employees made in the ordinary course of business), purchases or
other acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the Company
or any Restricted Subsidiary of the Company sells or otherwise disposes of any
Equity Interests of any direct or indirect Restricted Subsidiary of the Company
such that, after giving effect to any such
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sale or disposition, such Person is no longer a Restricted Subsidiary of the
Company, the Company shall be deemed to have made an Investment on the date of
any such sale or disposition equal to the fair market value of the Equity
Interests of such Restricted Subsidiary not sold or disposed of in an amount
determined as provided in the final paragraph of Section 4.07 hereof. The
acquisition by the Company or any Restricted Subsidiary of the Company of a
Person that holds an Investment in a third Person shall be deemed to be an
Investment by the Company or such Restricted Subsidiary in such third Person in
an amount equal to the fair market value of the Investment held by the acquired
Person in such third Person in an amount determined as provided in the final
paragraph Section 4.07 hereof.
"LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which
banking institutions in the City of New York or Luxembourg or at a place of
payment, are authorized by law, regulation or executive order to remain closed.
If a payment date is a Legal Holiday at a place of payment, payment may be made
at that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue on such payment for the intervening period.
"LETTER OF TRANSMITTAL" means the letter of transmittal to be
prepared by the Company and sent to all Holders of the Notes for use by such
Holders in connection with the Exchange Offer.
"LIEN" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law, including any conditional sale or other title retention agreement, any
lease in the nature thereof, any option or other agreement to sell or give a
security interest in and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction.
"LIQUIDATED DAMAGES" means all liquidated damages then owing
pursuant to Section 5 of the Registration Rights Agreement.
"NET INCOME" means, with respect to any specified Person, the
net income (loss) of such Person, determined in accordance with GAAP and before
any reduction in respect of preferred stock dividends, excluding, however:
(1) any gain or loss, together with any related provision for
taxes on such gain or loss, realized in connection with: (a) any Asset Sale; or
(b) the disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries; and
(2) any extraordinary gain or loss, together with any related
provision for taxes on such extraordinary gain or loss.
"NET PROCEEDS" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale, including, without limitation,
legal, accounting and investment banking fees, and sales commissions, and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof, in each case after taking into account any available tax credits
or deductions and any tax sharing arrangements and amounts required to be
applied to the repayment of
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Indebtedness, other than Senior Debt of the Company or a Guarantor, secured by a
Lien on the asset or assets that were the subject of such Asset Sale and any
reserve for adjustment in respect of the sale price of such asset or assets
established in accordance with GAAP.
"NON-RECOURSE DEBT" means Indebtedness:
(1) as to which neither the Company nor any of its Restricted
Subsidiaries (a) provides credit support of any kind (including any undertaking,
agreement or instrument that would constitute Indebtedness), (b) is directly or
indirectly liable as a guarantor or otherwise, or (c) constitutes the lender;
(2) no default with respect to which (including any rights that
the holders thereof may have to take enforcement action against an Unrestricted
Subsidiary) would permit upon notice, lapse of time or both any holder of any
other Indebtedness of the Company or any of its Restricted Subsidiaries to
declare a default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity; and
(3) as to which the lenders have been notified in writing that
they will not have any recourse to the stock or assets of the Company or any of
its Restricted Subsidiaries.
"NON-U.S. PERSON" means a Person who is not a U.S. Person.
"NOTES" has the meaning assigned to it in the preamble to this
Indenture. The Initial Notes and the Additional Notes shall be treated as a
single class for all purposes under this Indenture.
"OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"OFFICER" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary or any Vice-President of such Person.
"OFFICERS' CERTIFICATE" means a certificate signed on behalf of
the Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 12.05 hereof.
"OPINION OF COUNSEL" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
12.05 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"PARTICIPANT" means, with respect to the Depositary, Euroclear
or Cedelbank, a Person who has an account with the Depositary, Euroclear or
Cedelbank, respectively (and, with respect to The Depository Trust Company,
shall include Euroclear and Cedelbank).
"PERMITTED BUSINESS" means the business conducted by the Company
and its Restricted Subsidiaries on the date hereof and businesses reasonably
related thereto.
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"PERMITTED INVESTMENTS" means:
(1) any Investment in the Company or in a Restricted
Subsidiary;
(2) any Investment in Cash Equivalents;
(3) any Investment by the Company or any Restricted Subsidiary
of the Company in a Person, if as a result of such Investment:
(a) such Person becomes a Restricted Subsidiary
of the Company; or
(b) such Person is merged, consolidated or
amalgamated with or into, or transfers or conveys substantially
all of its assets to, or is liquidated into, the Company or a
Restricted Subsidiary of the Company;
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in compliance
with Section 4.10 hereof;
(5) any acquisition of assets solely in exchange for the
issuance of Equity Interests (other than Disqualified Stock) of the Company or
DASI;
(6) Hedging Obligations;
(7) other Investments in any Person having an aggregate fair
market value (measured on the date each such Investment was made and without
giving effect to subsequent changes in value), when taken together with all
other Investments made pursuant to this clause (7) that are at the time
outstanding, not to exceed the greater of (x) $50.0 million and (y) 5.0% of
Total Assets;
(8) Investments existing on the date of this Indenture and any
amendment, modification, restatement, supplement, extension, renewal, refunding,
replacement, refinancing, in whole or in part, thereof;
(9) any Investment by the Company or a Subsidiary of the
Company in a Securitization Entity or any Investment by a Securitization Entity
in any other Person in connection with a Qualified Securitization Transaction;
PROVIDED that any Investment in a Securitization Entity is in the form of a
Purchase Money Note or any equity interest;
(10) Investments in Permitted Joint Ventures of up to $25.0
million outstanding at any one time;
(11) Investments in Unrestricted Subsidiaries in an amount at
any one time outstanding not to exceed $10.0 million; and
(12) Investments in securities of trade creditors or customers
received pursuant to a plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of such trade creditors or customers.
"PERMITTED JOINT VENTURE" means an entity characterized as a
joint venture (however
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structured) engaged in a Permitted Business and in which the Company or a
Restricted Subsidiary (a) owns at least 20% of the ownership interest or (b) has
the right to receive at least 20% of the profits or distributions; provided that
such joint venture is not a Subsidiary.
"PERMITTED JUNIOR SECURITIES" means:
(1) Equity Interests in the Company, DASI or any Guarantor; or
(2) debt securities that are subordinated to all Senior Debt
and any debt securities issued in exchange for Senior Debt to substantially the
same extent as, or to a greater extent than, the Notes and the Guaranties are
subordinated to Senior Debt under this Indenture.
"PERMITTED LIENS" means:
(1) Liens of the Company and any Guarantor securing
Indebtedness and other Obligations under the Credit Facilities that were
securing Senior Debt that was permitted by the terms of this Indenture to be
incurred;
(2) Liens in favor of the Company or the Guarantors;
(3) Liens on property of a Person existing at the time such
Person is merged with or into or consolidated with the Company or any Subsidiary
of the Company; PROVIDED that such Liens were in existence prior to the
contemplation of such merger or consolidation and do not extend to any assets
other than those of the Person merged into or consolidated with the Company or
the Subsidiary;
(4) Liens on property existing at the time of acquisition
thereof by the Company or any Subsidiary of the Company, PROVIDED that such
Liens were in existence prior to the contemplation of such acquisition;
(5) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business;
(6) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by clause (iv) of the second paragraph of the Section
4.09 hereof covering only the assets acquired with such Indebtedness;
(7) Liens existing on the date of this Indenture;
(8) Liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently concluded, PROVIDED
that any reserve or other appropriate provision as shall be required in
conformity with GAAP shall have been made therefor;
(9) Liens incurred in the ordinary course of business of the
Company or any Subsidiary of the Company with respect to obligations that do not
exceed $5.0 million at any one time outstanding;
(10) Liens on assets of Unrestricted Subsidiaries that secure
Non-Recourse Debt of
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Unrestricted Subsidiaries;
(11) Liens on assets of a Restricted Subsidiary that is not a
Guarantor that secures Indebtedness (including Acquired Indebtedness) incurred
in compliance with Section 4.13 hereof.
(12) judgment Liens not giving rise to an Event of Default;
(13) Liens encumbering deposits made to secure obligations
arising from statutory, regulatory, contractual, or warranty requirements of the
Company or any of its Restricted Subsidiaries, including rights of offset and
set-off;
(14) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customer duties in connection with the
importation of goods;
(15) Liens on assets transferred to a Securitization Entity or
on assets of a Securitization Entity, in either case incurred in connection with
a Qualified Securitization Transaction;
(16) leases or subleases granted to others that do not
materially interfere with the ordinary course of business of the Company and its
Restricted Subsidiaries;
(17) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance and
other types of social security, including any Lien securing letters of credit
issued in the ordinary course of business consistent with past practice in
connection therewith, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money);
(18) Liens imposed by law, such as carriers', warehouseman's and
mechanics' Liens in each case for sums not yet due or being contested in good
faith;
(19) Liens securing Indebtedness or other obligations of a
Restricted Subsidiary owing to the Company or any Guarantor to the extent such
Indebtedness is permitted to be incurred in accordance with Section 4.09 hereof;
(20) Liens securing Hedging Obligations as long as the related
Indebtedness is, and is permitted to be under this Indenture to be secured by a
Lien on the same property securing the Hedging Obligations;
(21) Liens on specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations with respect to
bankers' acceptances issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or other goods;
and
(22) Liens arising from Uniform Commercial Code financing
statement filings regarding operating leases entered into by the Company and its
Restricted Subsidiaries in the ordinary course of business.
"PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness of
the Company or any of its Restricted Subsidiaries issued in exchange for, or the
net proceeds of which are used to extend,
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refinance, renew, replace, defease or refund other Indebtedness of the Company
or any of its Restricted Subsidiaries (other than intercompany Indebtedness);
PROVIDED that:
(1) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the principal amount (or
accreted value, if applicable) of the Indebtedness so extended, refinanced,
renewed, replaced, defeased or refunded (plus all accrued interest thereon and
the amount of all expenses and premiums incurred in connection therewith);
(2) such Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and has a Weighted Average
Life to Maturity equal to or greater than the Weighted Average Life to Maturity
of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded;
(3) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to the Notes,
such Permitted Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and is subordinated in right of payment to, the Notes on
terms at least as favorable to the Holders of Notes as those contained in the
documentation governing the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; and
(4) such Indebtedness is incurred either by the Company or by
the Restricted Subsidiary who is the obligor on the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company or government or other entity.
"PRINCIPALS" means Onex DHC LLC, Alkin Co. and J2R Corporation.
"PRIVATE PLACEMENT LEGEND" means the legend set forth in Section
2.06(g)(i) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
"PRO FORMA COST SAVINGS" means, with respect to any period, the
reduction in costs that occurred during the four-quarter period or after the end
of the four-quarter period and on or prior to the Transaction Date that were
directly attributable to an asset acquisition and calculated on a basis that is
consistent with Article 11 of Regulation S-X under the Securities Act as in
effect on the date hereof.
"PRODUCTIVE ASSETS" means assets that are used or useful in, or
Capital Stock of any person engaged in, a Permitted Business.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"QUALIFIED SECURITIZATION TRANSACTION" means any transaction or
series of transactions pursuant to which the Company or any of its Restricted
Subsidiaries may sell, convey or otherwise transfer to (a) a Securitization
Entity (in the case of a transfer by the Company or any of its Restricted
Subsidiaries) and (b) any other Person (in case of a transfer by a
Securitization Entity), or may grant a security interest in, any accounts
receivable or equipment (whether now existing or arising or acquired in
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the future) of the Company or any of its Restricted Subsidiaries, and any assets
related thereto including, without limitation, all collateral securing such
accounts receivable and equipment and other assets (including contract rights
and all guarantees or other obligations in respect to such accounts receivable
and equipment, proceeds of such accounts receivable and equipment and other
assets (including contract rights) which are customarily transferred or in
respect of which security interests are customarily granted in connection with
asset securitization transactions involving accounts receivable and equipment,
all of the foregoing for the purpose of providing working capital financing on
terms that are more favorable to the Company and its Restricted Subsidiary than
would otherwise be available at that time.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of April 22, 1999, by and among the Company and the other
parties named on the signature pages thereof, as such agreement may be amended,
modified or supplemented from time to time and, with respect to any Additional
Notes, one or more registration rights agreements between the Company and the
other parties thereto, as such agreement(s) may be amended, modified or
supplemented from time to time, relating to rights given by the Company to the
purchasers of Additional Notes to register such Additional Notes under the
Securities Act.
"REGULATION S" means Regulation S promulgated under the
Securities Act.
"REGULATION S GLOBAL NOTE" means a Global Note bearing the
Global Note Legend and the Private Placement Legend and deposited with or on
behalf of and registered in the name of the Depositary or its nominee, issued in
a denomination equal to the outstanding principal amount of the Notes resold in
reliance on Rule 904 of Regulation S.
"RELATED PARTY" means:
(1) any controlling stockholder, 80% (or more) owned
Subsidiary, or immediate family member (in the case of an individual) of any
Principal; or
(2) any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or Persons beneficially holding an
80% or more controlling interest of which consist of any one or more Principals
and/or such other Persons referred to in the immediately preceding clause (1).
"REPRESENTATIVE" means the indenture trustee or other trustee,
agent or representative in respect of any Designated Senior Debt; PROVIDED that
if, and for so long as, any Designated Senior Debt lacks such a representative,
then the Representative for such Designated Senior Debt shall at all times
constitute the holders of a majority in outstanding principal amount of such
Designated Senior Debt in respect of any Designated Senior Debt.
"RESPONSIBLE OFFICER," when used with respect to the Trustee,
means any officer within the Corporate Trust Administration of the Trustee (or
any successor group of the Trustee) or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"RESTRICTED DEFINITIVE NOTE" means a Definitive Note bearing the
Private Placement Legend.
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<PAGE>
"RESTRICTED GLOBAL NOTE" means a Global Note bearing the Private
Placement Legend.
"RESTRICTED INVESTMENT" means an Investment other than a
Permitted Investment.
"RESTRICTED SUBSIDIARY" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"RULE 144" means Rule 144 promulgated under the Securities Act.
"RULE 144A" means Rule 144A promulgated under the Securities
Act.
"RULE 903" means Rule 903 promulgated under the Securities Act.
"RULE 904" means Rule 904 promulgated the Securities Act.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIZATION ENTITY" means a Wholly Owned Subsidiary of the
Company (or another Person in which the Company or any Subsidiary of the Company
makes an Investment and to which the Company or any Subsidiary of the Company
transfers accounts receivable or equipment and related assets) that engages in
no activities other than in connection with the financing of accounts receivable
or equipment and that is designated by the Board of Directors of the Company (as
provided below) as a Securitization Entity (a) no portion of the Indebtedness or
any other obligations (contingent or otherwise) of which (i) is guaranteed by
the Company or any other Restricted Subsidiary (excluding guarantees of
Obligations (other than the principal of, and interest on, Indebtedness))
pursuant to Standard Securitization Undertakings, (ii) is recourse to or
obligates the Company or any Restricted Subsidiary in any way other than
pursuant to Standard Securitization Undertakings, (b) with which neither the
Company nor any Restricted Subsidiary has any material contract, agreement,
arrangement or understanding other than on terms no less favorable to the
Company or such Restricted Subsidiary than those that might be obtained at the
time from Persons that are not Affiliates of the Company, other than fees
payable in the ordinary course of business in connection with servicing
receivables of such entity, and (c) to which neither the Company nor any
Restricted Subsidiary has any obligation to maintain or preserve such entity's
financial condition or cause such entity to achieve certain levels of operating
results. Any such designation by the Board of Directors shall be evidenced to
the Trustee by filing with the Trustee a certified copy of the resolution of the
Board of Directors giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
conditions.
"SENIOR DEBT" means:
(1) all Indebtedness of the Company, any Guarantor, or DASI
outstanding under Credit Facilities and all Hedging Obligations with respect
thereto;
(2) any other Indebtedness of the Company or any Guarantor
permitted to be incurred under the terms of this Indenture, unless the
instrument under which such Indebtedness is incurred expressly provides that it
is on a parity with or subordinated in right of payment to the Notes or any of
the Guaranties; and
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(3) all Obligations with respect to the items listed in the
preceding clauses (1) and (2).
Notwithstanding anything to the contrary in the preceding,
Senior Debt will not include:
(1) any liability for federal, state, local or other
taxes owed or owing by the Company;
(2) any Indebtedness of the Company or DASI to any of
its Subsidiaries or other Affiliates;
(3) any trade payables; or
(4) the portion of any Indebtedness that is incurred in
violation of this Indenture.
"SHELF REGISTRATION STATEMENT" means the Shelf Registration
Statement as defined in the Registration Rights Agreement.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date of this Indenture.
"STANDARD SECURITIZATION UNDERTAKINGS" means representations,
warranties, covenants and indemnities entered into by the Company or any
Subsidiary of the Company that are reasonably customary in an accounts
receivable or equipment transactions.
"STATED MATURITY" means, with respect to any installment of
interest or principal on any series of Indebtedness, the date on which such
payment of interest or principal was scheduled to be paid in the original
documentation governing such Indebtedness, and shall not include any contingent
obligations to repay, redeem or repurchase any such interest or principal prior
to the date originally scheduled for the payment thereof.
"SUBSIDIARY" means, with respect to any specified Person:
(1) any corporation, association or other business entity of
which more than 50% of the total voting power of shares of Capital Stock
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 such Person or one or more of the other
Subsidiaries of that Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the
managing general partner of which is such Person or a Subsidiary of such Person
or (b) the only general partners of which are such Person or one or more
Subsidiaries of such Person (or any combination thereof).
"TOTAL ASSETS" means the total assets of the Company and its
Restricted Subsidiaries on a consolidated basis determined in accordance with
GAAP, as shown on the most recently available consolidated balance sheet of the
Company and its Restricted Subsidiaries.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect
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<PAGE>
on the date on which this Indenture is qualified under the TIA.
"TRUSTEE" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"UNRESTRICTED DEFINITIVE NOTE" means one or more Definitive
Notes that do not bear and are not required to bear the Private Placement
Legend.
"UNRESTRICTED GLOBAL NOTE" means a permanent global Note in the
form of Exhibit A attached hereto that bears the Global Note Legend and that has
the "Schedule of Exchanges of Interests in the Global Note" attached thereto,
and that is deposited with or on behalf of and registered in the name of the
Depositary, representing a series of Notes that do not bear the Private
Placement Legend.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary of the Company
(other than Dura UK Limited or any successor thereto) that is designated by the
Board of Directors as an Unrestricted Subsidiary pursuant to a Board Resolution,
but only to the extent that such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of the Company
unless the terms of any such agreement, contract, arrangement or understanding
are no less favorable to the Company or such Restricted Subsidiary than those
that might be obtained at the time from Persons who are not Affiliates of the
Company;
(3) is a Person with respect to which neither the Company nor
any of its Restricted Subsidiaries has any direct or indirect obligation (a) to
subscribe for additional Equity Interests or (b) to maintain or preserve such
Person's financial condition or to cause such Person to achieve any specified
levels of operating results; and
(4) has not guaranteed or otherwise directly or indirectly
provided credit support for any Indebtedness of the Company or any of its
Restricted Subsidiaries.
Any designation of a Subsidiary of the Company as an
Unrestricted Subsidiary shall be evidenced to the Trustee by filing with the
Trustee a certified copy of the Board Resolution giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the preceding conditions and was permitted by Section 4.07 hereof.
If, at any time, any Unrestricted Subsidiary would fail to meet the preceding
requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an
Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of
such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.09 hereof, the Company shall be in
default of such covenant. The Board of Directors of the Company may at any time
designate any Unrestricted Subsidiary to be a Restricted Subsidiary; PROVIDED
that such designation shall be deemed to be an incurrence of Indebtedness by a
Restricted Subsidiary of the Company of any outstanding Indebtedness of such
Unrestricted Subsidiary and such designation shall only be permitted if (1) such
Indebtedness is permitted under Section 4.09 hereof, calculated on a pro forma
basis as if such designation had occurred at the beginning of the four-quarter
reference period; and (2) no Default or Event of Default would be in existence
following such designation.
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"U.S. PERSON" means a U.S. person as defined in Rule 902(o)
under the Securities Act.
"VOTING STOCK" of any Person as of any date means the Capital
Stock of such Person that is at the time entitled to vote in the election of the
Board of Directors of such Person.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the
amount of each then remaining installment, sinking fund, serial maturity or
other required payments of principal, including payment at final maturity, in
respect thereof, by (b) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such payment;
by
(2) the then outstanding principal amount of such Indebtedness.
"WHOLLY OWNED RESTRICTED SUBSIDIARY" of any Person means a
Restricted Subsidiary of such Person all of the outstanding Capital Stock or
other ownership interests of which (other than directors' qualifying shares)
shall at the time be owned by such Person or by one or more Wholly Owned
Restricted Subsidiaries of such Person.
SECTION 1.02. OTHER DEFINITIONS.
<TABLE>
<CAPTION>
Defined in
Term Section
<S> <C>
"ACCELERATION NOTICE" . . . . . . . . . . . . . . . . . . 6.02
"AFFILIATE TRANSACTION" . . . . . . . . . . . . . . . . . 4.11
"ASSET SALE OFFER". . . . . . . . . . . . . . . . . . . . 3.09
"AUTHENTICATION ORDER". . . . . . . . . . . . . . . . . . 2.02
"CHANGE OF CONTROL OFFER" . . . . . . . . . . . . . . . . 4.15
"CHANGE OF CONTROL PAYMENT" . . . . . . . . . . . . . . . 4.15
"CHANGE OF CONTROL PAYMENT DATE". . . . . . . . . . . . . 4.15
"COVENANT DEFEASANCE". . . . . . . . . . . . . . . . . . 8.03
"EVENT OF DEFAULT". . . . . . . . . . . . . . . . . . . . 6.01
"EXCESS PROCEEDS" . . . . . . . . . . . . . . . . . . . . 4.10
"INCUR" . . . . . . . . . . . . . . . . . . . . . . . . . 4.09
"LEGAL DEFEASANCE". . . . . . . . . . . . . . . . . . . . 8.02
"OFFER AMOUNT". . . . . . . . . . . . . . . . . . . . . . 3.09
"OFFER PERIOD". . . . . . . . . . . . . . . . . . . . . . 3.09
"PAYING AGENT". . . . . . . . . . . . . . . . . . . . . . 2.03
"PAYMENT BLOCKAGE NOTICE" . . . . . . . . . . . . . .. . 10.03
"PAYMENT DEFAULT" . . . . . . . . . . . . . . . . . . . . 6.01
"PERMITTED DEBT". . . . . . . . . . . . . . . . . . . . . 4.09
"PURCHASE DATE" . . . . . . . . . . . . . . . . . . . . . 3.09
"REGISTRAR". . .. . . . . . . . . . . . . . . . . . . . . 2.03
"RESTRICTED PAYMENTS" . . . . . . . . . . . . . . . . . . 4.07
</TABLE>
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<PAGE>
SECTION 1.03. TRUST INDENTURE ACT DEFINITIONS.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the
following meanings:
"INDENTURE SECURITIES" means the Notes;
"INDENTURE SECURITY HOLDER" means a Holder of a Note;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the
Trustee; and
"OBLIGOR" on the Notes and the Guaranties means the Company and
the Guarantors, respectively, and any successor obligor upon the Notes and the
Guaranties, respectively.
All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule under
the TIA have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in
the plural include the singular;
(5) provisions apply to successive events and
transactions; and
(6) references to sections of or rules under the
Securities Act shall be deemed to include substitute,
replacement of successor sections or rules adopted by the SEC
from time to time.
ARTICLE 2.
THE NOTES
SECTION 2.01. FORM AND DATING.
(a) GENERAL.
The Notes and the Trustee's certificate of authentication shall
be substantially in the form
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of Exhibit A hereto. The Notes may have notations, legends or endorsements
required by law, stock exchange rule or usage. Each Note shall be dated the
date of its authentication. The Notes shall be in denominations of E1,000 and
integral multiples thereof.
The terms and provisions contained in the Notes shall
constitute, and are hereby expressly made, a part of this Indenture and the
Company, the Guarantors and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.
However, to the extent any provision of any Note conflicts with the express
provisions of this Indenture, the provisions of this Indenture shall govern and
be controlling.
(b) GLOBAL NOTES.
Notes issued in global form shall be substantially in the form
of Exhibit A attached hereto (including the Global Note Legend thereon and the
"Schedule of Exchanges of Interests in the Global Note" attached thereto).
Notes issued in definitive form shall be substantially in the form of Exhibit A
attached hereto (but without the Global Note Legend thereon and without the
"Schedule of Exchanges of Interests in the Global Note" attached thereto). Each
Global Note shall represent such of the outstanding Notes as shall be specified
therein and each shall provide that it shall represent the aggregate principal
amount of outstanding Notes from time to time endorsed thereon and that the
aggregate principal amount of outstanding Notes represented thereby may from
time to time be reduced or increased, as appropriate, to reflect exchanges and
redemptions. Any endorsement of a Global Note to reflect the amount of any
increase or decrease in the aggregate principal amount of outstanding Notes
represented thereby shall be made by the Trustee or the Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.06 hereof.
(c) EUROCLEAR AND CEDELBANK PROCEDURES APPLICABLE. The provisions
of the "Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Cedelbank"
and "Customer Handbook" of Cedelbank shall be applicable to transfers of
beneficial interests in the Regulation S Global Notes that are held by
Participants through Euroclear or Cedelbank.
SECTION 2.02. EXECUTION AND AUTHENTICATION. Two Officers shall sign the Notes
for the Company by manual or facsimile signature. The Company's seal may be
reproduced on the Notes and may be in facsimile form.
If an Officer whose signature is on a Note no longer holds that
office at the time a Note is authenticated, the Note shall nevertheless be
valid.
A Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Note has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by
two Officers (an "AUTHENTICATION ORDER"), authenticate Notes for original issue
up to the aggregate principal amount of E150.0 million, of which E100.0 million
will be issued as Initial Notes on the date hereof. The aggregate principal
amount of Notes outstanding at any time may not exceed such amount except as
provided in Section 2.07 hereof.
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The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Notes. An authenticating agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company. The Trustee has appointed The Industrial Bank of
Japan (Luxembourg) S.A. ("IBJ") to act as authenticating agent for the
Regulation S Global Note.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Notes may
be presented for registration of transfer or for exchange ("REGISTRAR") and an
office or agency where Notes may be presented for payment ("PAYING AGENT"). If
and as long as the Notes are listed on the Luxembourg Stock Exchange, the
Company shall maintain a Registrar and Paying Agent in Luxembourg. The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company initially designates IBJ to act as principal Registrar and principal
Paying Agent in Luxembourg. The principal Registrar shall keep a register of
the Notes and of their transfer and exchange. The Company may appoint one or
more co-registrars and one or more additional paying agents. The term
"REGISTRAR" includes any co-registrar and the term "PAYING AGENT" includes any
additional paying agent. The Company may change any Paying Agent or Registrar
without notice to any Holder. The Company shall notify the Trustee in writing
of the name and address of any Agent not a party to this Indenture. If the
Company fails to appoint or maintain another entity as Registrar or Paying
Agent, the Trustee shall act as such. The Company or any of its Subsidiaries
may act as Paying Agent or Registrar.
The Company initially appoints (i) IBJ as common depositary for
Euroclear and Cedelbank, to act as Depositary with respect to the Regulation S
Global Note and (ii) The Depositary Trust Company ("DTC") to act as Depositary
with respect to the 144A Global Note (IBJ and DTC are each referred to herein as
the "DEPOSITARY," as applicable).
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the
Trustee or IBJ to agree in writing that the Paying Agent will hold in trust for
the benefit of Holders or the Trustee all money held by the Paying Agent for the
payment of principal, premium or Liquidated Damages, if any, or interest on the
Notes, and will notify the Trustee of any default by the Company in making any
such payment. While any such default continues, the Trustee may require a
Paying Agent to pay all money held by it to the Trustee. The Company at any
time may require a Paying Agent to pay all money held by it to the Trustee.
Upon payment over to the Trustee, the Paying Agent (if other than the Company or
a Subsidiary) shall have no further liability for the money. If the Company or
a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate
trust fund for the benefit of the Holders all money held by it as Paying Agent.
By 10:00 a.m. Luxembourg time on the Luxembourg Business Day two days
immediately prior to each due date for the payment of principal, interest and
Liquidated Damages, the Company shall deposit with the Paying Agent a sum
sufficient to pay such principal, interest and Liquidated Damages. Upon any
bankruptcy or reorganization proceedings relating to the Company, the Trustee
shall serve as Paying Agent for the Notes.
All amounts payable under the Notes will be payable in Euro,
except as may otherwise be agreed between any applicable securities clearing
system and any holders and except as otherwise
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provided below. Payments will be subject in all cases to any fiscal or other
laws and regulations applicable thereto. None of the Company, the Trustee or
any Paying Agent shall be liable to any holder of a Note or any other person for
any commissions, costs, losses or expenses in relation to or resulting from any
currency conversion or rounding effected in connection therewith.
Holders of the 144A Global Notes will be paid in U.S. dollars
converted from such payments in Euro by the Paying Agent unless the registered
holder, on behalf of any such owner of beneficial interests, elects to receive
payments in Euro. All costs of conversion, if any, will be borne by holders of
beneficial interests in the 144A Global Notes, by deduction from such payment.
An owner of a beneficial interest in a 144A Global Note may
receive payment in Euro by notifying the DTC participant through which its
beneficial interest in the 144A Global Note is held on or prior to the record
date of (i) such investor's election to receive payment in Euro and (ii) wire
transfer instructions to an account entitled to receive the relevant payment.
If complete instructions are received by the DTC participant and forwarded by
the DTC participant to DTC and by DTC to the Paying Agent, each in a timely
manner, such investor will receive payment in Euro outside DTC; otherwise only
U.S. dollar payments will be made by the Paying Agent with respect to the 144A
Global Note. All costs of such payment by wire transfer will be borne by
registered holders receiving such payments by deduction from such payments. Any
such conversion shall be effected in a manner mutually agreed upon by the
Company and the Paying Agent. If such conversion is not practicable for any
reason, payment will be made in Euro to the account or accounts specified by DTC
to the Depositary.
SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA Section 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF GLOBAL NOTES.
A Global Note may not be transferred as a whole except by the
Depositary to a nominee of the Depositary, by a nominee of the Depositary to the
Depositary or to another nominee of the Depositary, the Depositary or any such
nominee to a successor Depositary or a nominee of such successor Depositary.
All Global Notes will be exchanged by the Company for Definitive Notes if (i)
the Company delivers to the Trustee notice from the Depositary that it is
unwilling or unable to continue to act as Depositary or, in the case of a
Depositary that it located in the United States, that it is no longer a clearing
agency registered under the Exchange Act and, in either case, a successor
Depositary is not appointed by the Company within 90 days after the date of such
notice from the Depositary or (ii) there shall have occurred and be continuing a
Default or an Event of Default. Global Notes also may be exchanged or replaced,
in whole or in part, as provided in Sections 2.07 and 2.10 hereof. Upon the
occurrence of either of the preceding events in (i) or (ii) above, Definitive
Notes shall be issued in such names as the Depositary shall instruct the
Trustee. Every Note authenticated and delivered in exchange
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for, or in lieu of, a Global Note or any portion thereof, pursuant to this
Section 2.06 or Section 2.07 or 2.10 hereof, shall be authenticated and
delivered in the form of, and shall be, a Global Note. A Global Note may not be
exchanged for another Note other than as provided in this Section 2.06(a),
however, beneficial interests in a Global Note may be transferred and exchanged
as provided in Section 2.06(b),(c) or (f) hereof.
(b) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN THE GLOBAL
NOTES. The transfer and exchange of beneficial interests in the Global Notes
shall be effected through the Depositary, in accordance with the provisions of
this Indenture and the Applicable Procedures. Beneficial interests in the
Restricted Global Notes shall be subject to restrictions on transfer comparable
to those set forth herein to the extent required by the Securities Act.
Transfers of beneficial interests in the Global Notes also shall require
compliance with either subparagraph (i) or (ii) below, as applicable, as well as
one or more of the other following subparagraphs, as applicable:
(i) TRANSFER OF BENEFICIAL INTERESTS IN THE SAME GLOBAL
NOTE. Beneficial interests in any Restricted Global Note may be
transferred to Persons who take delivery thereof in the form of a
beneficial interest in the same Restricted Global Note in accordance
with the transfer restrictions set forth in the Private Placement
Legend. Beneficial interests in any Unrestricted Global Note may be
transferred to Persons who take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note. No written orders
or instructions shall be required to be delivered to the Registrar to
effect the transfers described in this Section 2.06(b)(i).
(ii) ALL OTHER TRANSFERS AND EXCHANGES OF BENEFICIAL
INTERESTS IN GLOBAL NOTES. In connection with all transfers and
exchanges of beneficial interests that are not subject to Section
2.06(b)(i) above, the transferor of such beneficial interest must
deliver to the Registrar either (A) (1) a written order from a
Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to
credit or cause to be credited a beneficial interest in the Global Note
in an amount equal to the beneficial interest to be transferred or
exchanged and (2) instructions given in accordance with the Applicable
Procedures containing information regarding the Participant account to
be credited with such increase or (B) (1) a written order from a
Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to
cause to be issued a Definitive Note in an amount equal to the
beneficial interest to be transferred or exchanged and (2) instructions
given by the Depositary to the Registrar containing information
regarding the Person in whose name such Definitive Note shall be
registered to effect the transfer or exchange referred to in (1) above.
Upon consummation of an Exchange Offer by the Company in accordance with
Section 2.06(f) hereof, the requirements of this Section 2.06(b)(ii)
shall be deemed to have been satisfied upon receipt by the Registrar of
the instructions contained in the Letter of Transmittal delivered by the
Holder of such beneficial interests in the Restricted Global Notes.
Upon satisfaction of all of the requirements for transfer or exchange of
beneficial interests in Global Notes contained in this Indenture and the
Notes or otherwise applicable under the Securities Act, the Trustee
shall adjust the principal amount of the relevant Global Note(s)
pursuant to Section 2.06(h) hereof.
(iii) TRANSFER OF BENEFICIAL INTERESTS TO ANOTHER RESTRICTED
GLOBAL NOTE. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(ii) above and the
Registrar receives the following:
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(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof; and
(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Global Note, then the transferor
must deliver a certificate in the form of Exhibit B hereto, including
the certifications in item (2) thereof.
(iv) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN A RESTRICTED
GLOBAL NOTE FOR BENEFICIAL INTERESTS IN THE UNRESTRICTED GLOBAL NOTE. A
beneficial interest in any Restricted Global Note may be exchanged by any holder
thereof for a beneficial interest in an Unrestricted Global Note or transferred
to a Person who takes delivery thereof in the form of a beneficial interest in
an Unrestricted Global Note if the exchange or transfer complies with the
requirements of Section 2.06(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement and
the holder of the beneficial interest to be transferred, in the case of
an exchange, or the transferee, in the case of a transfer, certifies in
the applicable Letter of Transmittal that it is not (1) a broker-dealer,
(2) a Person participating in the distribution of the Exchange Notes or
(3) a Person who is an affiliate (as defined in Rule 144) of the
Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a beneficial interest in an Unrestricted Global
Note, a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(a) thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form
of a beneficial interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph
(D), if the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable to the
Registrar to the effect that such exchange or transfer is in compliance
with the Securities Act and that the restrictions on transfer contained
herein and in the Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or
(D) above at a time when
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an Unrestricted Global Note has not yet been issued, the Company shall issue
and, upon receipt of an Authentication Order in accordance with Section 2.02
hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in
an aggregate principal amount equal to the aggregate principal amount of
beneficial interests transferred pursuant to subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the form
of, a beneficial interest in a Restricted Global Note.
(c) TRANSFER OR EXCHANGE OF BENEFICIAL INTERESTS FOR DEFINITIVE
NOTES.
(i) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES TO
RESTRICTED DEFINITIVE NOTES. If any holder of a beneficial interest in
a Restricted Global Note proposes to exchange such beneficial interest
for a Restricted Definitive Note or to transfer such beneficial interest
to a Person who takes delivery thereof in the form of a Restricted
Definitive Note, then, upon receipt by the Registrar of the following
documentation:
(A) if the holder of such beneficial
interest in a Restricted Global Note proposes to
exchange such beneficial interest for a Restricted
Definitive Note, a certificate from such holder in the
form of Exhibit C hereto, including the certifications
in item (2)(a) thereof;
(B) if such beneficial interest is being
transferred to a QIB in accordance with Rule 144A under
the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications
in item (1) thereof;
(C) if such beneficial interest is being
transferred to a Non-U.S. Person in an offshore
transaction in accordance with Rule 903 or Rule 904
under the Securities Act, a certificate to the effect
set forth in Exhibit B hereto, including the
certifications in item (2) thereof;
(D) if such beneficial interest is being
transferred pursuant to an exemption from the
registration requirements of the Securities Act in
accordance with Rule 144 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(a) thereof;
(E) if such beneficial interest is being
transferred to an Institutional Accredited Investor in
reliance on an exemption from the registration
requirements of the Securities Act other than those
listed in subparagraphs (B) through (D) above, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications, certificates and Opinion
of Counsel required by item (3) thereof, if applicable;
(F) if such beneficial interest is being
transferred to the Company or any of its Subsidiaries, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof; or
(G) if such beneficial interest is being
transferred pursuant to an effective registration
statement under the Securities Act, a certificate to the
effect set forth in
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Exhibit B hereto, including the certifications in item (3)(c)
thereof,
the Trustee shall cause the aggregate principal amount
of the applicable Global Note to be reduced accordingly pursuant to
Section 2.06(h) hereof, and the Company shall execute and the Trustee
shall authenticate and deliver to the Person designated in the
instructions a Definitive Note in the appropriate principal amount. Any
Definitive Note issued in exchange for a beneficial interest in a
Restricted Global Note pursuant to this Section 2.06(c) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct
the Registrar through instructions from the Depositary and the
Participant or Indirect Participant. The Trustee shall deliver such
Definitive Notes to the Persons in whose names such Notes are so
registered. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 2.06(c)(i)
shall bear the Private Placement Legend and shall be subject to all
restrictions on transfer contained therein.
(ii) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES TO
UNRESTRICTED DEFINITIVE NOTES. A holder of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an
Unrestricted Definitive Note or may transfer such beneficial interest to
a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note only if:
(A) such exchange or transfer is effected
pursuant to the Exchange Offer in accordance with the
Registration Rights Agreement and the holder of such
beneficial interest, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who
is an affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to
the Shelf Registration Statement in accordance with the
Registration Rights Agreement;
(C) such transfer is effected by a
Broker-Dealer pursuant to the Exchange Offer
Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Definitive Note that does not bear the Private
Placement Legend, a certificate from such holder in the form of
Exhibit C hereto, including the certifications in item (1)(b)
thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form
of a Definitive Note that does not bear the Private Placement
Legend, a certificate from such holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph
(D), if the Registrar so
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requests or if the Applicable Procedures so require, an Opinion
of Counsel in form reasonably acceptable to the Registrar to the
effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained
herein and in the Private Placement Legend are no longer
required in order to maintain compliance with the Securities
Act.
(iii) BENEFICIAL INTERESTS IN UNRESTRICTED GLOBAL NOTES TO
UNRESTRICTED DEFINITIVE NOTES. If any holder of a beneficial interest
in an Unrestricted Global Note proposes to exchange such beneficial
interest for a Definitive Note or to transfer such beneficial interest
to a Person who takes delivery thereof in the form of a Definitive Note,
then, upon satisfaction of the conditions set forth in Section
2.06(b)(ii) hereof, the Trustee shall cause the aggregate principal
amount of the applicable Global Note to be reduced accordingly pursuant
to Section 2.06(h) hereof, and the Company shall execute and the Trustee
shall authenticate and deliver to the Person designated in the
instructions a Definitive Note in the appropriate principal amount. Any
Definitive Note issued in exchange for a beneficial interest pursuant to
this Section 2.06(c)(iii) shall be registered in such name or names and
in such authorized denomination or denominations as the holder of such
beneficial interest shall instruct the Registrar through instructions
from the Depositary and the Participant or Indirect Participant. The
Trustee shall deliver such Definitive Notes to the Persons in whose
names such Notes are so registered. Any Definitive Note issued in
exchange for a beneficial interest pursuant to this Section 2.06(c)(iii)
shall not bear the Private Placement Legend.
(d) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR BENEFICIAL
INTERESTS.
(i) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES. If any Holder of a Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a Restricted
Global Note or to transfer such Restricted Definitive Notes to a Person
who takes delivery thereof in the form of a beneficial interest in a
Restricted Global Note, then, upon receipt by the Registrar of the
following documentation:
(A) if the Holder of such Restricted
Definitive Note proposes to exchange such Note for a
beneficial interest in a Restricted Global Note, a
certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (2)(b)
thereof;
(B) if such Restricted Definitive Note is
being transferred to a QIB in accordance with Rule 144A
under the Securities Act, a certificate to the effect
set forth in Exhibit B hereto, including the
certifications in item (1) thereof;
(C) if such Restricted Definitive Note is
being transferred to a Non-U.S. Person in an offshore
transaction in accordance with Rule 903 or Rule 904
under the Securities Act, a certificate to the effect
set forth in Exhibit B hereto, including the
certifications in item (2) thereof;
(D) if such Restricted Definitive Note is
being transferred pursuant to an exemption from the
registration requirements of the Securities Act in
accordance with Rule 144 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(a) thereof;
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(E) if such Restricted Definitive Note is
being transferred to an Institutional Accredited
Investor in reliance on an exemption from the
registration requirements of the Securities Act other
than those listed in subparagraphs (B) through (D)
above, a certificate to the effect set forth in Exhibit
B hereto, including the certifications, certificates and
Opinion of Counsel required by item (3) thereof, if
applicable;
(F) if such Restricted Definitive Note is
being transferred to the Company or any of its
Subsidiaries, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item
(3)(b) thereof; or
(G) if such Restricted Definitive Note is
being transferred pursuant to an effective registration
statement under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (3)(c) thereof,
the Trustee shall cancel the Restricted Definitive Note,
increase or cause to be increased the aggregate principal amount of,
in the case of clause (A) above, the appropriate Restricted Global
Note, in the case of clause (B) above, the 144A Global Note, in the
case of clause (C) above, the Regulation S Global Note, and in all
other cases, the IAI Global Note.
(ii) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN
UNRESTRICTED GLOBAL NOTES. A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global
Note or transfer such Restricted Definitive Note to a Person who takes
delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note only if:
(A) such exchange or transfer is effected
pursuant to the Exchange Offer in accordance with the
Registration Rights Agreement and the Holder, in the
case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of
Transmittal that it is not (1) a broker-dealer, (2) a
Person participating in the distribution of the Exchange
Notes or (3) a Person who is an affiliate (as defined in
Rule 144) of the Company;
(B) such transfer is effected pursuant to
the Shelf Registration Statement in accordance with the
Registration Rights Agreement;
(C) such transfer is effected by a
Broker-Dealer pursuant to the Exchange Offer
Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Notes
proposes to exchange such Notes for a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in the
form of Exhibit C hereto, including the certifications in item
(1)(c) thereof; or
(2) if the Holder of such Definitive Notes
proposes to transfer such Notes to a Person who shall take
delivery thereof in the form of a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in the
form of Exhibit B hereto, including the certifications in item
(4) thereof;
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and, in each such case set forth in this subparagraph
(D), if the Registrar so requests or if the Applicable Procedures
so require, an Opinion of Counsel in form reasonably acceptable to
the Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are
no longer required in order to maintain compliance with the
Securities Act.
Upon satisfaction of the conditions of any of the
subparagraphs in this Section 2.06(d)(ii), the Trustee shall
cancel the Definitive Notes and increase or cause to be increased
the aggregate principal amount of the Unrestricted Global Note.
(iii) UNRESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN
UNRESTRICTED GLOBAL NOTES. A Holder of an Unrestricted Definitive Note
may exchange such Note for a beneficial interest in an Unrestricted
Global Note or transfer such Definitive Notes to a Person who takes
delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note at any time. Upon receipt of a request for such an exchange
or transfer, the Trustee shall cancel the applicable Unrestricted
Definitive Note and increase or cause to be increased the aggregate
principal amount of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or
(iii) above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of Definitive Notes so transferred.
(e) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR DEFINITIVE NOTES.
Upon request by a Holder of Definitive Notes and such Holder's
compliance with the provisions of this Section 2.06(e), the Registrar shall
register the transfer or exchange of Definitive Notes. Prior to such
registration of transfer or exchange, the requesting Holder shall present or
surrender to the Registrar the Definitive Notes duly endorsed or accompanied by
a written instruction of transfer in form satisfactory to the Registrar duly
executed by such Holder or by his attorney, duly authorized in writing. In
addition, the requesting Holder shall provide any additional certifications,
documents and information, as applicable, required pursuant to the following
provisions of this Section 2.06(e).
(i) RESTRICTED DEFINITIVE NOTES TO RESTRICTED DEFINITIVE
NOTES. Any Restricted Definitive Note may be transferred to and
registered in the name of Persons who take delivery thereof in the form
of a Restricted Definitive Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to
Rule 144A under the Securities Act, then the transferor
must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (1)
thereof;
(B) if the transfer will be made pursuant to
Rule 903 or Rule 904, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including
the certifications in item (2) thereof; and
(C) if the transfer will be made pursuant to
any other exemption from the registration requirements
of the Securities Act, then the transferor must deliver
a
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certificate in the form of Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by
item (3) thereof, if applicable.
(ii) RESTRICTED DEFINITIVE NOTES TO UNRESTRICTED DEFINITIVE
NOTES. Any Restricted Definitive Note may be exchanged by the Holder
thereof for an Unrestricted Definitive Note or transferred to a Person
or Persons who take delivery thereof in the form of an Unrestricted
Definitive Note if:
(A) such exchange or transfer is effected
pursuant to the Exchange Offer in accordance with the
Registration Rights Agreement and the Holder, in the
case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of
Transmittal that it is not (1) a broker-dealer, (2) a
Person participating in the distribution of the Exchange
Notes or (3) a Person who is an affiliate (as defined in
Rule 144) of the Company;
(B) any such transfer is effected pursuant
to the Shelf Registration Statement in accordance with
the Registration Rights Agreement;
(C) any such transfer is effected by a
Broker-Dealer pursuant to the Exchange Offer
Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive
Notes proposes to exchange such Notes for an Unrestricted Definitive
Note, a certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (1)(d) thereof; or
(2) if the Holder of such Restricted
Definitive Notes proposes to transfer such Notes to a Person who
shall take delivery thereof in the form of an Unrestricted
Definitive Note, a certificate from such Holder in the form of
Exhibit B hereto, including the certifications in item (4)
thereof;
and, in each such case set forth in this
subparagraph (D), if the Registrar so requests, an Opinion of Counsel in
form reasonably acceptable to the Company to the effect that such
exchange or transfer is in compliance with the Securities Act and that
the restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain compliance
with the Securities Act.
(iii) UNRESTRICTED DEFINITIVE NOTES TO UNRESTRICTED DEFINITIVE
NOTES. A Holder of Unrestricted Definitive Notes may transfer such
Notes to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note. Upon receipt of a request to register
such a transfer, the Registrar shall register the Unrestricted
Definitive Notes pursuant to the instructions from the Holder thereof.
(f) EXCHANGE OFFER.
Upon the occurrence of the Exchange Offer in accordance with the
Registration Rights Agreement, the Company shall issue and, upon receipt of an
Authentication Order in accordance with Section 2.02, the Trustee shall
authenticate (i) one or more Unrestricted Global Notes in an aggregate
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principal amount equal to the principal amount of the beneficial interests in
the Restricted Global Notes tendered for acceptance by Persons that certify in
the applicable Letters of Transmittal that (x) they are not broker-dealers, (y)
they are not participating in a distribution of the Exchange Notes and (z) they
are not affiliates (as defined in Rule 144) of the Company, and accepted for
exchange in the Exchange Offer and (ii) Definitive Notes in an aggregate
principal amount equal to the principal amount of the Restricted Definitive
Notes accepted for exchange in the Exchange Offer. Concurrently with the
issuance of such Notes, the Trustee shall cause the aggregate principal amount
of the applicable Restricted Global Notes to be reduced accordingly, and the
Company shall execute and the Trustee shall authenticate and deliver to the
Persons designated by the Holders of Definitive Notes so accepted Definitive
Notes in the appropriate principal amount.
(g) LEGENDS. The following legends shall appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B)
below, each Global Note and each Definitive Note (and
all Notes issued in exchange therefor or substitution
thereof) shall bear the legend in substantially the
following form:
THE NOTE (OR ITS PREDECESSORS) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED, AND THE NOTE EVIDENCED HEREBY MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE NOTE EVIDENCED HEREBY
IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER
OR ANOTHER EXEMPTION UNDER THE SECURITIES ACT. THE HOLDER OF THE NOTE EVIDENCED
HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH NOTE MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (I) (A) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT), PURCHASING FOR ITS OWN ACCOUNT IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (B) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 OF THE SECURITIES ACT, (C)
OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 OF REGULATION S UNDER THE SECURITIES ACT OR (D) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT PROVIDED THAT IN THE CASE OF A TRANSFER PURSUANT TO CLAUSE (D)
SUCH TRANSFER IS EFFECTED BY THE DELIVERY TO THE TRANSFEREE OF DEFINITIVE
SECURITIES REGISTERED IN ITS NAME (OR ITS NOMINEES NAME) IN THE BOOKS MAINTAINED
BY THE REGISTRAR, AND IS SUBJECT TO THE RECEIPT BY THE REGISTRAR (AND THE
COMPANY, IF THEY SO REQUEST) OF A CERTIFICATION OF THE TRANSFEROR AND AN OPINION
OF COUNSEL TO THE EFFECT THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (II) TO THE COMPANY OR (III) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT
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UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, ANDEACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER FROM IT OF THE NOTE EVIDENCED HEREBY OF THE RESALE
RESTRICTIONS SET FORTH IN (A) ABOVE.
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(iv), (c)(ii),
(c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to this Section
2.06 (and all Notes issued in exchange therefor or substitution thereof)
shall not bear the Private Placement Legend.
(ii) Global Note Legend. Each Global Note shall bear a
legend in substantially the following form:
"This Global Note is held by the Depositary (as defined
in the Indenture governing this Note) or its nominee in custody for the
benefit of the beneficial owners hereof, and is not transferable to any
person under any circumstances except that (i) the Trustee may make such
notations hereon as may be required pursuant to section 2.07 of this
Indenture, (ii) this Global Note may be exchanged in whole but not in
part pursuant to section 2.06(a) of this Indenture, (iii) this Global
Note may be delivered to the Trustee for cancellation pursuant to
section 2.11 of this Indenture, and (iv) this Global Note may be
transferred to a successor depositary with the prior written consent of
the Company."
(h) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTES.
At such time as all beneficial interests in a particular Global
Note have been exchanged for Definitive Notes or a particular Global Note has
been redeemed, repurchased or canceled in whole and not in part, each such
Global Note shall be returned to or retained and canceled by the Trustee in
accordance with Section 2.11 hereof. At any time prior to such cancellation, if
any beneficial interest in a Global Note is exchanged for or transferred to a
Person who will take delivery thereof in the form of a beneficial interest in
another Global Note or for Definitive Notes, the principal amount of Notes
represented by such Global Note shall be reduced accordingly and an endorsement
shall be made on such Global Note by the Trustee or by the Depositary at the
direction of the Trustee to reflect such reduction; and if the beneficial
interest is being exchanged for or transferred to a Person who will take
delivery thereof in the form of a beneficial interest in another Global Note,
such other Global Note shall be increased accordingly and an endorsement shall
be made on such Global Note by the Trustee or by the Depositary at the direction
of the Trustee to reflect such increase.
(i) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Global Notes
and Definitive Notes upon the Company's order or at the Registrar's
request.
(ii) No service charge shall be made to a holder of a
beneficial interest in a Global Note or to a Holder of a Definitive Note
for any registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable
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<PAGE>
in connection therewith (other than any such transfer taxes or similar
governmental charge payable upon exchange or transfer pursuant to
Sections 2.10, 3.06, 3.09, 4.10, 4.15 and 9.05 hereof).
(iii) The Registrar shall not be required to register the
transfer of or exchange any Note selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes
shall be the valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Global
Notes or Definitive Notes surrendered upon such registration of transfer
or exchange.
(v) The Company shall not be required (A) to issue, to
register the transfer of or to exchange any Notes during a period
beginning at the opening of business 15 days before the day of any
selection of Notes for redemption under Section 3.02 hereof and ending
at the close of business on the day of selection, (B) to register the
transfer of or to exchange any Note so selected for redemption in whole
or in part, except the unredeemed portion of any Note being redeemed in
part or (c) to register the transfer of or to exchange a Note between a
record date and the next succeeding Interest Payment Date.
(vi) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the Company may deem
and treat the Person in whose name any Note is registered as the
absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Notes and for all other purposes, and
none of the Trustee, any Agent or the Company shall be affected by
notice to the contrary.
(vii) The Trustee shall authenticate Global Notes and
Definitive Notes in accordance with the provisions of Section 2.02
hereof.
(viii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06
to effect a registration of transfer or exchange may be submitted by
facsimile.
SECTION 2.07. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee or the
Company and the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Note, the Company shall issue and the Trustee,
upon receipt of an Authentication Order, shall authenticate a replacement Note
if the Trustee's requirements are met. If required by the Trustee or the
Company, an indemnity bond must be supplied by the Holder that is sufficient in
the judgment of the Trustee and the Company to protect the Company, the Trustee,
any Agent and any authenticating agent from any loss that any of them may suffer
if a Note is replaced. The Company may charge for its expenses in replacing a
Note.
Every replacement Note issued pursuant to this Section 2.07 is
an additional obligation of the Company and shall be entitled to all of the
benefits of this Indenture equally and proportionately with all other Notes duly
issued hereunder.
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SECTION 2.08. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, those reductions in the interest in a Global Note effected
by the Trustee in accordance with the provisions hereof, and those described in
this Section as not outstanding. Except as set forth in Section 2.09 hereof, a
Note does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note; however, Notes held by the Company or a Subsidiary of
the Company shall not be deemed to be outstanding for purposes of Section
3.07(b) hereof.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases
to be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under
Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to
accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Company, or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company, shall
be considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes that the Trustee knows are so owned
shall be so disregarded.
SECTION 2.10. TEMPORARY NOTES.
Until certificates representing Notes are ready for delivery,
the Company may prepare and the Trustee, upon receipt of an Authentication
Order, shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of certificated Notes but may have variations that the
Company considers appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company shall prepare
and the Trustee shall authenticate definitive Notes in exchange for temporary
Notes.
Holders of temporary Notes shall be entitled to all of the
benefits of this Indenture.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment.
The Trustee and no one else shall cancel all Notes surrendered for registration
of transfer, exchange, payment, replacement or cancellation and shall destroy
canceled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all
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canceled Notes shall be delivered to the Company. Subject to Section 2.07, the
Company may not issue new Notes to replace Notes that it has paid or that have
been delivered to the Trustee for cancellation.
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes,
it shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Notes and in Section 4.01 hereof. The Company shall notify the Trustee
in writing of the amount of defaulted interest proposed to be paid on each Note
and the date of the proposed payment. The Company shall fix or cause to be
fixed each such special record date and payment date, PROVIDED that no such
special record date shall be less than 10 days prior to the related payment date
for such defaulted interest. At least 15 days before the special record date,
the Company (or, upon the written request of the Company, the Trustee in the
name and at the expense of the Company) shall mail or cause to be mailed to
Holders a notice that states the special record date, the related payment date
and the amount of such interest to be paid.
SECTION 2.13. CUSIP AND ISIN NUMBERS.
The Company in issuing the Notes may use "CUSIP" and "ISIN", as
applicable, numbers (if then generally in use), and, if so, the Trustee shall
use CUSIP and ISIN numbers, as applicable, in notices of redemption as a
convenience to Holders; PROVIDED that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Notes or as contained in any notice of a redemption and that reliance may
be placed only on the other identification numbers printed on the Notes, and any
such redemption shall not be affected by any defect in or the omission of such
numbers. The Company will promptly notify the Trustee of any change in the
CUSIP or ISIN, as applicable, numbers.
ARTICLE 3.
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 30 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the clause of this Indenture or the
Notes pursuant to which the redemption shall occur, (ii) the redemption date,
(iii) the principal amount of Notes to be redeemed and (iv) the redemption
price.
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed at any time,
the Trustee shall select Notes for redemption as follows:
(a) if the Notes are listed, in compliance with the requirements of
the principal national securities exchange on which the Notes are listed; or
(b) if the Notes are not so listed, on a pro rata basis, by lot or
by such method as the Trustee
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<PAGE>
shall deem fair and appropriate.
In the event of partial redemption by lot, the particular Notes
to be redeemed shall be selected, unless otherwise provided herein, not less
than 30 nor more than 60 days prior to the redemption date by the Trustee from
the outstanding Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the
Notes selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of E1,000 or whole multiples of E1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
E1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
SECTION 3.03. NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.09 hereof, at least
30 days but not more than 60 days before a redemption date, the Company shall
mail or cause to be mailed, by first class mail, a notice of redemption to each
Holder whose Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed and shall
state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part only, the portion of the
principal amount of such Note to be redeemed and that, after the redemption date
upon surrender of such Note, a new Note or Notes in principal amount equal to
the unredeemed portion shall be issued upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and after
the redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy
of the CUSIP or ISIN, as applicable, number, if any, listed in such notice or
printed on the Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; PROVIDED, HOWEVER, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee
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give such notice and setting forth the information to be stated in such notice
as provided in the preceding paragraph.
For so long as the Notes are listed on the Luxembourg Stock
Exchange and the rules of such exchange so require, the Company will cause a
notice of redemption of the Notes to be published in a daily newspaper with
general circulation in Luxembourg (which is expected to be the LUXEMBOURG WORT).
Notices of redemption may not be conditional.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section
3.03 hereof, Notes called for redemption become irrevocably due and payable on
the redemption date at the redemption price. A notice of redemption may not be
conditional.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
By 10:00 a.m. Luxembourg time on the Luxembourg Business Day two
days immediately prior to the redemption date, the Company shall deposit with
the Trustee or with the Paying Agent money sufficient to pay the redemption
price of and accrued interest on all Notes to be redeemed on that date. The
Trustee or the Paying Agent shall promptly return to the Company any money
deposited with the Trustee or the Paying Agent by the Company in excess of the
amounts necessary to pay the redemption price of, and accrued interest on, all
Notes to be redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption. If a Note is redeemed
on or after an interest record date but on or prior to the related interest
payment date, then any accrued and unpaid interest shall be paid to the Person
in whose name such Note was registered at the close of business on such record
date. If any Note called for redemption shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, from the redemption
date until such principal is paid, and to the extent lawful on any interest not
paid on such unpaid principal, in each case at the rate provided in the Notes
and in Section 4.01 hereof.
SECTION 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company
shall issue and, upon the Company's written request, the Trustee shall
authenticate for the Holder at the expense of the Company a new Note equal in
principal amount to the unredeemed portion of the Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
(a) At any time prior to May 1, 2002, the Company may redeem up to
35% of the aggregate principal amount of Notes issued under this Indenture
(calculated after giving effect to any issuance of Additional Notes) at a
redemption price of 101% of the principal amount thereof, plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the redemption date,
with the net cash proceeds of one or more Equity Offerings; PROVIDED that:
(i) at least 65% of the aggregate principal amount of Notes
issued under this Indenture
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remains outstanding immediately after the occurrence of such redemption
(excluding Notes held by DASI, the Company and their respective
Subsidiaries); and
(ii) the redemptions must occur within 90 days of the date of the
closing of any such Equity Offering.
(b) Except pursuant to the preceding paragraph, the Notes will not
be redeemable at the Company's option prior to May 1, 2004.
After May 1, 2004, the Company may redeem all or a part of the Notes
upon not less than 30 nor more than 60 days' notice, at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the applicable
redemption date, if redeemed during the twelve-month period beginning on May 1
of the years indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
----- ----------
<S> <C>
2004 104.50%
2005 103.00%
2006 101.50%
2007_ and thereafter 100.00%
</TABLE>
(c) Any redemption pursuant to this Section 3.07 shall be
made pursuant to the provisions of Section 3.01 through 3.06 hereof.
SECTION 3.08. MANDATORY REDEMPTION.
The Company shall not be required to make mandatory redemption
or sinking fund payments with respect to the Notes.
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
In the event that, pursuant to Section 4.10 hereof, the Company
shall be required to commence an offer to all Holders to purchase Notes (an
"ASSET SALE OFFER"), it shall follow the procedures specified below.
The Asset Sale Offer shall remain open for a period of 20
Business Days following its commencement and no longer, except to the extent
that a longer period is required by applicable law (the "OFFER PERIOD"). No
later than five Business Days after the termination of the Offer Period (the
"PURCHASE DATE"), the Company shall purchase the principal amount of Notes
required to be purchased pursuant to Section 4.10 hereof (the "OFFER AMOUNT")
or, if less than the Offer Amount has been tendered, all Notes tendered in
response to the Asset Sale Offer. Payment for any Notes so purchased shall be
made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date and
on or before the related interest payment date, any accrued and unpaid interest
shall be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Notes pursuant to the Asset Sale Offer.
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Upon the commencement of an Asset Sale Offer, the Company shall
send, by first class mail, a notice to the Trustee and each of the Holders, with
a copy to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Asset Sale
Offer. The Asset Sale Offer shall be made to all Holders. The notice, which
shall govern the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this Section
3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer shall
remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall
continue to accrue interest;
(d) that, unless the Company defaults in making such payment, any
Note accepted for payment pursuant to the Asset Sale Offer shall cease to accrue
interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to an
Asset Sale Offer may only elect to have all of such Note purchased and may not
elect to have only a portion of such Note purchased;
(f) that Holders electing to have a Note purchased pursuant to any
Asset Sale Offer shall be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note completed, or
transfer by book-entry transfer, to the Company, a depositary, if appointed by
the Company, or a Paying Agent at the address specified in the notice at least
three days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election if the
Company, the Depositary or the Paying Agent, as the case may be, receives, not
later than the expiration of the Offer Period, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Note the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Note purchased;
(h) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Offer Amount, the Company shall select the Notes to be
purchased on a PRO RATA basis (with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of E1,000, or
integral multiples thereof, shall be purchased); and
(i) that Holders whose Notes were purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased portion of the
Notes surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Company shall, to the extent
lawful, accept for payment, on a PRO RATA basis to the extent necessary, the
Offer Amount of Notes or portions thereof tendered pursuant to the Asset Sale
Offer, or if less than the Offer Amount has been tendered, all Notes tendered,
and shall deliver to the Trustee an Officers' Certificate stating that such
Notes or portions thereof were accepted for payment by the Company in accordance
with the terms of this Section 3.09. The Company, the Depositary or the Paying
Agent, as the case may be, shall promptly (but in any case not later than five
days after the Purchase Date) mail or deliver to each tendering Holder an amount
equal to the purchase price of the Notes tendered by such Holder and accepted by
the Company for purchase,
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and the Company shall promptly issue a new Note, and the Trustee, upon written
request from the Company shall authenticate and mail or deliver such new Note to
such Holder, in a principal amount equal to any unpurchased portion of the Note
surrendered. Any Note not so accepted shall be promptly mailed or delivered by
the Company to the Holder thereof. The Company shall publicly announce the
results of the Asset Sale Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any
purchase pursuant to this Section 3.09 shall be made pursuant to the provisions
of Sections 3.01 through 3.06 hereof.
ARTICLE 4.
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
The Company or a Guarantor shall pay or cause to be paid the
principal of, premium, if any, and interest and Liquidated Damages, if any, on
the Notes on the dates and in the manner provided in the Notes. Principal,
premium, if any, and interest and Liquidated Damages, if any, shall be
considered paid on the date due if the Paying Agent, if other than the Company
or a Subsidiary thereof, holds as of 10:00 a.m. Luxembourg Time on the second
Luxembourg Business Day prior to the due date money deposited by the Company in
immediately available funds and designated for and sufficient to pay all
principal, premium, if any, and interest and Liquidated Damages, if any, then
due. The Company shall pay all Liquidated Damages, if any, in the same manner
on the dates and in the amounts set forth in the Registration Rights Agreement.
The Company or a Guarantor shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal at the rate equal to 1% per annum in excess of the then applicable
interest rate on the Notes to the extent lawful; it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest and Liquidated Damages (without regard to any
applicable grace period) at the same rate to the extent lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the City
of New York, and if and as long as the Notes are listed on the Luxembourg Stock
Exchange, in Luxembourg, an office or agency (which may be an office of the
Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes
may be surrendered for registration of transfer or for exchange and where
notices and demands to or upon the Company in respect of the Notes and this
Indenture may be served. The Company shall give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more
other offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
PROVIDED, HOWEVER, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, the City of New York, and for so long as the Notes are
listed on the Luxembourg Stock
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Exchange, in Luxembourg, for such purposes. The Company shall give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.03 and, if and as long as the Notes are listed on the Luxembourg Stock
Exchange, the Company also hereby designates The Industrial Bank of Japan
(Luxembourg) S.A. as another such office or agency in accordance with
Section 2.03 and the rules of the Luxembourg Stock Exchange.
SECTION 4.03. REPORTS.
Whether or not required by the SEC, so long as any Notes are
outstanding, the Company shall furnish to the Holders of Notes, within five days
of filing such reports with the SEC:
(i) all quarterly and annual financial information that
would be required to be contained in a filing with the SEC on Forms 10-Q
and 10-K if the Company were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and Results
of Operations" and, with respect to the annual information only, a
report on the annual financial statements by the Company's certified
independent accountants; and
(ii) all current reports that would be required to be filed
with the SEC on Form 8-K if the Company were required to file such
reports.
If the Company has designated any of its Subsidiaries as
Unrestricted Subsidiaries, then the quarterly and annual financial information
required by the preceding paragraph shall include a reasonably detailed
presentation, either on the face of the financial statements or in the footnotes
thereto, and in Management's Discussion and Analysis of Financial Condition and
Results of Operations, of the financial condition and results of operations of
the Company and its Restricted Subsidiaries separate from the financial
condition and results of operations of the Unrestricted Subsidiaries of the
Company.
In addition, following consummation of the Exchange Offer,
whether or not required by the SEC, the Company shall file a copy of all of the
information and reports referred to in clauses (i) and (ii) above with the SEC
for public availability within the time periods specified in the SEC's rules and
regulations (unless the SEC will not accept such a filing) and make such
information available to securities analysts and prospective investors upon
request. Moreover, the Company agrees, and any Guarantor shall agree, that, for
so long as any Notes remain outstanding, it shall furnish to the Holders and to
securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act. Reports and other filings made by DASI that include all of the
information referred to in clauses (i) and (ii) above with respect to DASI and
its consolidated subsidiaries shall be deemed to satisfy the obligations of the
Company and/or the Guarantors set forth above as long as such reports and
filings include the information required by the staff of the SEC under its
interpretations of SAB 53; provided that DASI does not have any business
operations other than those conducted through the Company.
SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Company and each Guarantor (to the extent that such
Guarantor is so required under
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the TIA) shall deliver to the Trustee, within 90 days after the end of each
fiscal year, an Officers' Certificate stating that a review of the activities of
the Company and its Subsidiaries during the preceding fiscal year has been made
under the supervision of the signing Officers with a view to determining whether
the Company has kept, observed, performed and fulfilled its obligations under
this Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge the Company has kept,
observed, performed and fulfilled each and every covenant contained in this
Indenture and is not in default in the performance or observance of any of the
terms, provisions and conditions of this Indenture (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of Default
of which he or she may have knowledge and what action the Company is taking or
proposes to take with respect thereto) and that to the best of his or her
knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto. For
purposes this paragraph, such compliance shall be determined without regard to
any period of grace or requirement of notice under this Indenture.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(i) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.
SECTION 4.05. TAXES.
The Company shall pay, and shall cause each of its Subsidiaries
to pay, prior to delinquency, all material taxes, assessments, and governmental
levies except such as are contested in good faith and by appropriate proceedings
or where the failure to effect such payment is not adverse in any material
respect to the Holders of the Notes.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
The Company and each of the Guarantors covenants (to the extent
that it may lawfully do so) that it shall not at any time insist upon, plead, or
in any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in force,
that may affect the covenants or the performance of this Indenture; and the
Company and each of the Guarantors (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and covenants
that it shall not, by resort to any such law, hinder, delay or impede the
execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every
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such power as though no such law has been enacted.
SECTION 4.07. RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly:
(i) declare or pay any dividend or make any other payment or
distribution on account of the Company's or any of its Restricted
Subsidiaries' Equity Interests (including, without limitation, any
payment in connection with any merger or consolidation involving the
Company or any of its Restricted Subsidiaries) or to the direct or
indirect holders of the Company's or any of its Restricted Subsidiaries'
Equity Interests in their capacity as such (other than dividends or
distributions payable in Equity Interests (other than Disqualified
Stock) of the Company or to the Company or a Restricted Subsidiary of
the Company);
(ii) purchase, redeem or otherwise acquire or retire for
value (including, without limitation, in connection with any merger or
consolidation involving the Company) any Equity Interests of the Company
or any direct or indirect parent of the Company;
(iii) make any payment on or with respect to, or purchase,
redeem, defease or otherwise acquire or retire for value any
Indebtedness that is subordinated to the Notes or the Guaranties, except
a payment of interest or principal at the Stated Maturity thereof; or
(iv) make any Restricted Investment (all such payments and
other actions set forth in clauses (i) through (iv) above being
collectively referred to as "Restricted Payments"),
unless, at the time of and after giving effect to such
Restricted Payment:
(i) no Default or Event of Default shall have occurred and
be continuing or would occur as a consequence thereof; and
(ii) the Company would, at the time of such Restricted
Payment and after giving pro forma effect thereto as if such Restricted
Payment had been made at the beginning of the applicable four-quarter
period, have been permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth
in the first paragraph of Section 4.09 hereof; and
(iii) such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by the Company and its
Restricted Subsidiaries after the date of this Indenture (excluding
Restricted Payments permitted by clauses (ii), (iii) and (iv) of the
next succeeding paragraph), is less than the sum, without duplication,
of
(A) 50% of the Consolidated Net Income of
the Company for the period (taken as one accounting
period) from March 31, 1999 to the end of the Company's
most recently ended fiscal quarter for which internal
financial statements are available at the time of such
Restricted Payment (or, if such Consolidated Net Income
for such period is a deficit, less 100% of such
deficit), PLUS
(B) 100% of the aggregate net cash proceeds
or fair market value of
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Productive Assets received by the Company since the date of this
Indenture as a contribution to its common equity capital or from
the issue or sale of Equity Interests of the Company (other than
Disqualified Stock) or from the issue or sale of convertible or
exchangeable Disqualified Stock or convertible or exchangeable
debt securities of the Company that have been converted into or
exchanged for such Equity Interests (other than Equity Interests
(or Disqualified Stock or debt securities) sold to a Subsidiary
of the Company), PLUS
(C) to the extent that any Restricted
Investment that was made after the date of this
Indenture is sold for cash or otherwise liquidated or
repaid for cash, the lesser of (i) the cash return of
capital with respect to such Restricted Investment (less
the cost of disposition, if any) and (ii) the initial
amount of such Restricted Investment, PLUS
(D) without duplication of any amounts
included in clause (b) above, 100% of the aggregate Net
Cash Proceeds or the fair market value of Productive
Assets received by the Company as common equity
contributions by a holder of the Equity Interests of the
Company (excluding any net cash proceeds from an equity
contribution which has been financed, directly or
indirectly using funds (1) borrowed from the Company or
any of its Subsidiaries, unless and until and to the
extent such borrowing is repaid or (2) contributed,
extended, guaranteed or advanced by the Company or by
any of its Subsidiaries); PLUS
(E) any dividends paid in cash or Productive
Assets received by the Company or a Restricted
Subsidiary of the Company after the date of this
Indenture from any Unrestricted Subsidiary to the extent
that such dividends were not otherwise included in
Consolidated Net Income; PLUS
(F) to the extent that any Unrestricted
Subsidiary is redesignated as a Restricted Subsidiary
after the date of this Indenture, the fair market value
of the Company's Investment in such Subsidiary (which
consists of cash or Productive Assets) as of the date of
such redesignation.
So long as no Default has occurred and is continuing or would be caused thereby,
the preceding provisions will not prohibit:
(i) the payment of any dividend within 60 days after the
date of declaration thereof, if at said date of declaration, such
payment would have complied with the provisions of this Indenture;
(ii) the redemption, repurchase, retirement, defeasance or
other acquisition of any subordinated Indebtedness of DASI, the Company
or any Guarantor or of any Equity Interests of DASI, the Company or any
Restricted Subsidiary in exchange for, or out of the net cash proceeds
of the substantially concurrent sale (other than to a Subsidiary of the
Company) of, Equity Interests of the Company (other than Disqualified
Stock); PROVIDED that the amount of any such net cash proceeds that are
utilized for any such redemption, repurchase, retirement, defeasance or
other acquisition shall be excluded from clause (iii) (B) of the
preceding paragraph;
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(iii) the defeasance, redemption, repurchase or other
acquisition of subordinated Indebtedness of the Company or any Guarantor
with the net cash proceeds from an incurrence of Permitted Refinancing
Indebtedness;
(iv) the payment of any dividend by a Restricted Subsidiary
of the Company to the holders of its Equity Interests on a pro rata
basis;
(v) the repurchase, redemption or other acquisition or
retirement for value of any Equity Interests of DASI, the Company or any
Restricted Subsidiary of the Company held by any employee, officer or
director (in each case either current or former) of the Company (or any
of its Restricted Subsidiaries) pursuant to any management equity
subscription agreement or stock plan; provided that the aggregate price
paid for all such repurchased, redeemed, acquired or retired Equity
Interests shall not exceed $5.0 million in any twelve-month period;
(vi) cash dividends or loans from the Company to DASI for the
purpose of permitting DASI to pay its ordinary operating expenses
(including, without limitation, directors' fees, indemnification
obligations, professional fees and expenses, etc.) in an aggregate
amount not to exceed $5.0 million in any twelve-month period;
(vii) payments to DASI not to exceed $100,000 in any fiscal
year, solely to enable DASI to make payments to holders of its Capital
Stock in lieu of issuance of fractional shares of its Capital Stock;
(viii) repurchases of Capital Stock deemed to occur upon the
exercise of stock options if such Capital Stock represents a portion of
the exercise price thereof;
(ix) the declaration and payment of dividends to holders of
any class or series of Designated Preferred Stock (other than
Disqualified Capital Stock) issued after the date of this Indenture;
provided that, at the time of such issuance, the Company, after giving
effect to such issuance on a pro forma basis, would have had a Fixed
Charge Coverage Ratio of at least 2.0 to 1.0;
(x) other Restricted Payments in an aggregate amount not to
exceed $10.0 million since the date of this Indenture;
(xi) the distribution, as a dividend or otherwise, of shares
of Capital Stock of any Unrestricted Subsidiary of the Company;
(xii) cash dividends or loans from the Company to DASI in
amounts equal to amounts required for DASI to pay franchise taxes and
Federal, state and local taxes to the extent such income taxes are
attributable to the income of the Company and its Restricted
Subsidiaries; and
(xiii) dividends from the Company to DASI in an amount
sufficient to pay dividends on DASI's 7-1/2% Convertible Trust Preferred
Securities due 2028, that are outstanding on the issue date of the
Notes.
The amount of all Restricted Payments (other than cash) shall be
the fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair
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market value of any assets or securities that are required to be valued by this
Section 4.07 shall be determined by the Board of Directors whose resolution with
respect thereto shall be delivered to the Trustee. The Board of Directors'
determination must be based upon an opinion or appraisal issued by an
accounting, appraisal or investment banking firm of national standing if the
fair market value exceeds $10.0 million. Not later than the date of making any
Restricted Payment, the Company shall deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by this Section 4.07 were
computed, together with a copy of any fairness opinion or appraisal required by
this Indenture.
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED
SUBSIDIARIES.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or permit to exist or
become effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(i) pay dividends or make any other distributions on its
Capital Stock to the Company or any of the Company's Restricted
Subsidiaries, or with respect to any other interest or participation in,
or measured by, its profits, or pay any indebtedness owed to the Company
or any of the Company's Restricted Subsidiaries;
(ii) make loans or advances to the Company or any of the
Company's Restricted Subsidiaries; or
(iii) transfer any of its properties or assets to the Company
or any of the Company's Restricted Subsidiaries.
However, the preceding restrictions will not apply to
encumbrances or restrictions existing under or by reason of:
(i) Existing Indebtedness as in effect on the date of this
Indenture;
(ii) this Indenture, the Notes and the Guaranties;
(iii) Indebtedness incurred by a Restricted Subsidiary that is
not a Guarantor in compliance with Section 4.13;
(iv) applicable law, regulation or order;
(v) any instrument governing Indebtedness or Capital Stock
of a Person acquired by the Company or any of its Restricted
Subsidiaries as in effect at the time of such acquisition (except to the
extent such Indebtedness was incurred in connection with or in
contemplation of such acquisition), which encumbrance or restriction is
not applicable to any Person, or the properties or assets of any Person,
other than the Person, or the property or assets of the Person, so
acquired, PROVIDED that, in the case of Indebtedness, such Indebtedness
was permitted by the terms of this Indenture to be incurred;
(vi) customary non-assignment provisions in leases entered
into in the ordinary course of
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business and consistent with past practices;
(vii) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions on the property so
acquired of the nature described in clause (iii) of the preceding
paragraph;
(viii) any agreement for the sale or other disposition of a
Restricted Subsidiary that restricts distributions by that Restricted
Subsidiary pending its sale or other disposition;
(ix) Liens securing Indebtedness that limit the right of the
debtor to dispose of the assets subject to such Lien;
(x) provisions with respect to the disposition or
distribution of assets or property in joint venture agreements, asset
sale agreements, stock sale agreements and other similar agreements
entered into in the ordinary course of business;
(xi) restrictions on cash or other deposits or net worth
imposed by customers under contracts entered into in the ordinary course
of business;
(xii) customary provisions in agreements with respect to
Permitted Joint Ventures;
(xiii) Indebtedness incurred after the date of this Indenture
in accordance with the terms of this Indenture; provided; that the
restrictions contained in the agreements governing such new Indebtedness
are, in the good faith judgment of the Board of Directors of the
Company, not materially less favorable, taken as a whole, to the holders
of the Notes than those contained in the agreements governing
Indebtedness outstanding on the date of this Indenture;
(xiv) any encumbrance or restriction of a Securitization
Entity effected in connection with a Qualified Securitization
Transaction; and
(xv) any encumbrances or restrictions imposed by any
amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings of the contracts,
instruments or obligations referred to in clauses (i) through (xiv)
above; provided that such amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or
refinancings are, in the good faith judgment of the Board of Directors
of the Company, no more restrictive with respect to such dividend and
other payment restrictions prior to such amendment, modification,
restatement, renewal, increase, supplement, refunding, replacement or
refinancing.
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
The Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt), and the Company shall not issue any Disqualified Stock and shall not
permit any of its Subsidiaries to issue any shares of preferred stock; PROVIDED,
HOWEVER, that the Company may incur Indebtedness (including Acquired Debt) or
issue Disqualified Stock, and the Guarantors may incur Indebtedness (including
Acquired Debt) or issue preferred stock, if in each case the Fixed Charge
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Coverage Ratio for the Company's most recently ended four full fiscal quarters
for which internal financial statements are available immediately preceding the
date on which such additional Indebtedness is incurred or such Disqualified
Stock or preferred stock is issued would have been at least 2.0 to 1.0,
determined on a pro forma basis (including a pro forma application of the net
proceeds therefrom), as if the additional Indebtedness had been incurred, or the
preferred stock or Disqualified Stock had been issued, as the case may be, at
the beginning of such four-quarter period.
The first paragraph of this Section 4.09 shall not prohibit the
incurrence of any of the following items of Indebtedness (collectively,
"Permitted Debt"):
(i) the incurrence by the Company and any Restricted
Subsidiary of Indebtedness and letters of credit under Credit Facilities
in an aggregate principal amount at any one time outstanding under this
clause (i) (with letters of credit being deemed to have a principal
amount equal to the maximum potential liability of the Company and its
Restricted Subsidiaries thereunder) not to exceed $950.0 million less
any mandatory prepayments actually made thereunder (to the extent, in
the case of payments of revolving credit Indebtedness, that the
corresponding commitments have been permanently reduced) or scheduled
payments actually made thereunder (other than the repayment of the
Interim Term Loan using the net proceeds from the sale of the Initial
Notes);
(ii) the incurrence by the Company and its Restricted
Subsidiaries of the Existing Indebtedness;
(iii) the incurrence by the Company and the Guarantors of
Indebtedness represented by the Notes and the related Guaranties to be
issued on the date of this Indenture and the Exchange Notes and the
related Guaranties to be issued pursuant to the Registration Rights
Agreement;
(iv) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case,
incurred for the purpose of financing all or any part of the purchase
price or cost of construction or improvement of property, plant or
equipment used in the business of the Company or such Restricted
Subsidiary, in an aggregate principal amount, including all Permitted
Refinancing Indebtedness incurred to refund, refinance or replace any
Indebtedness incurred pursuant to this clause (iv), not to exceed 5% of
Total Assets at any time outstanding;
(v) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or
the net proceeds of which are used to refund, refinance or replace,
Indebtedness (other than intercompany Indebtedness) that was permitted
by this Indenture to be incurred under the first paragraph of this
Section 4.09 or clauses (ii), (iii), (iv), (v) or (x) of this paragraph;
(vi) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company
and any of its Restricted Subsidiaries; PROVIDED, HOWEVER, that:
(A) if the Company or any Guarantor is the
obligor on such Indebtedness, such Indebtedness must be
expressly subordinated to the prior payment in full in
cash of all Obligations with respect to the Notes, in
the case of the Company, or the
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Guaranty of such Guarantor, in the case of a Guarantor; and
(B) (1) any subsequent issuance or transfer
of Equity Interests that results in any such
Indebtedness being held by a Person other than the
Company or a Restricted Subsidiary thereof and (2) any
sale or other transfer of any such Indebtedness to a
Person that is not either the Company or a Restricted
Subsidiary thereof shall be deemed, in each case, to
constitute an incurrence of such Indebtedness by the
Company or such Restricted Subsidiary, as the case may
be, that was not permitted by this clause (vi);
(vii) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred for the purpose of
fixing or hedging interest rate risk with respect to any floating rate
Indebtedness that is permitted by the terms of this Indenture to be
outstanding or to hedge exposure to foreign currency fluctuations or
commodity price risk with respect to any commodity purchases;
(viii) (A) the guarantee by the Company or any of the
Guarantors of Indebtedness of the Company or a Guarantor that was
permitted to be incurred by another provision of this Section 4.09; and
(B) the guarantee by any Restricted Subsidiary
of the Company that is not a Guarantor of Indebtedness
of another Restricted Subsidiary of the Company that is
not a Guarantor that was permitted to be incurred by
another provision of this Section 4.09;
(ix) the accrual of interest, accretion or amortization of
original issue discount, the payment of interest on any Indebtedness in
the form of additional Indebtedness with the same terms, and the payment
of dividends on Disqualified Stock in the form of additional shares of
the same class of Disqualified Stock; PROVIDED, in each such case, that
the amount thereof is included in Fixed Charges of the Company as
accrued;
(x) the incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness or Disqualified Stock in an
aggregate principal amount (or accreted value, as applicable) at any
time outstanding, including all Permitted Refinancing Indebtedness
incurred to refund, refinance or replace any Indebtedness incurred
pursuant to this clause (x), not to exceed $50.0 million;
(xi) the incurrence by the Company's Unrestricted
Subsidiaries of Non-Recourse Debt, provided, however, that if any such
Indebtedness ceases to be Non-Recourse Debt of an Unrestricted
Subsidiary, such event shall be deemed to constitute an incurrence of
Indebtedness by a Restricted Subsidiary of the Company that was not
permitted by this clause (xi);
(xii) the incurrence of Indebtedness (including letters of
credit) in respect of workers' compensation claims, self-insurance
obligations, performance, surety, bid or similar bonds and completion
guaranties provided by the Company or one of its Restricted Subsidiaries
in the ordinary course of business and consistent with past practices;
(xiii) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary providing for indemnification, adjustment of
purchase price, earn out or other similar obligations, in
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each case, incurred or assumed in connection with the disposition of any
business, assets or a Restricted Subsidiary, other than guarantees of
Indebtedness incurred by any Person acquiring all or any portion of such
business, assets or Restricted Subsidiary for the purpose of financing
such acquisition; PROVIDED that the maximum assumable liability in
respect of all such Indebtedness shall at no time exceed the gross
proceeds actually received by the Company and its Restricted
Subsidiaries in connection with such disposition;
(xiv) the incurrence by a Securitization Entity of
Indebtedness in a Qualified Securitization Transaction that is
Non-Recourse Debt (except for Standard Securitization Undertakings) with
respect to the Company and its other Restricted Subsidiaries;
(xv) Indebtedness of the Company evidenced by promissory
notes subordinated to the Notes and the Exchange Notes issued to
employees of the Company and its Subsidiaries in lieu of cash payment at
any time for Equity Interest of DASI being repurchased from such
employees; provided; that the aggregate amount of such Indebtedness does
not exceed $5.0 million at any one time outstanding;
(xvi) guaranties of Indebtedness of any other person incurred
by the Company or a Restricted Subsidiary in the ordinary course of
business in an aggregate principal amount not to exceed $5.0 million at
any one time outstanding;
(xvii) Indebtedness consisting of take-or-pay obligations
contained in supply agreements entered into by the Company or its
Subsidiaries in the ordinary course; and
(xviii) Indebtedness of Restricted Subsidiaries that are not
Guarantors permitted by Section 4.13 hereof.
For purposes of determining compliance with this Section 4.09,
in the event that an item of Indebtedness meets the criteria of more than one of
the categories of Permitted Debt described in clauses (i) through (xvii) above,
or is entitled to be incurred pursuant to the first paragraph of this Section
4.09, the Company shall, in its sole discretion, classify such item of
Indebtedness in any manner that complies with this Section 4.09. All borrowings
outstanding on the date of this Indenture under the Credit Facilities will be
deemed to have been borrowed pursuant to clause (i) of the definition of
Permitted Debt.
SECTION 4.10. ASSET SALES.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, consummate an Asset Sale unless:
(i) the Company (or the Restricted Subsidiary, as the case
may be) receives consideration at the time of such Asset Sale at least
equal to the fair market value of the assets or Equity Interests issued
or sold or otherwise disposed of (as determined in good faith by the
Company);
(ii) such fair market value is determined by the Company's
Board of Directors and evidenced by a resolution of the Board of
Directors set forth in an Officers' Certificate delivered to the
Trustee; and
(iii) at least 75% of the consideration therefor received by
the Company or such Restricted
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Subsidiary is in the form of cash or Cash Equivalents. For purposes of
this provision, each of the following shall be deemed to be cash:
(A) any liabilities (as shown on the
Company's or such Restricted Subsidiary's most recent
balance sheet), of the Company or any Restricted
Subsidiary (other than contingent liabilities and
liabilities that are by their terms subordinated to the
Notes or any Guaranty) that are assumed by the
transferee of any such assets pursuant to a customary
novation agreement that releases the Company or such
Restricted Subsidiary from further liability;
(B) any securities, notes or other
obligations received by the Company or any such
Restricted Subsidiary from such transferee that are
converted by the Company or such Restricted Subsidiary
into cash within 180 days after the consummation of such
Asset Sale (to the extent of the cash received in that
conversion); and
(C) any Designated Noncash Consideration received by
the Company or any of its Restricted Subsidiaries in such Asset
Sale; PROVIDED that the aggregate fair market value (as
determined above) of such Designated Noncash Consideration,
taken together with the fair market value at the time of receipt
of all other Designated Noncash Consideration received pursuant
to this clause (c) less the amount of Net Proceeds previously
realized in cash from prior Designated Noncash Consideration is
less than 5.0% of Total Assets at the time of the receipt of
such Designated Noncash Consideration (with the fair market
value of each item of Designated Noncash Consideration being
measured at the time received and without giving effect to
subsequent changes in value).
Within 365 days after the receipt of any Net Proceeds
from an Asset Sale, the Company may apply such Net Proceeds at its option:
(i) to repay Senior Debt, and if such Senior Debt repaid is
revolving credit Indebtedness, to correspondingly reduce commitments
with respect thereto ;
(ii) to acquire all or substantially all of the assets of, or
a majority of the Voting Stock of, another Permitted Business;
(iii) to make a capital expenditure; and/or
(iv) to acquire other long-term assets that are used or
useful in a Permitted Business.
Pending the final application of any such Net Proceeds, the
Company may temporarily reduce revolving credit borrowings or otherwise invest
such Net Proceeds in any manner that is not prohibited by this Indenture.
Any Net Proceeds from Asset Sales that are not applied or
invested as provided in the preceding paragraph will constitute "Excess
Proceeds." When the aggregate amount of Excess Proceeds exceeds $20.0 million,
the Company will make an Asset Sale Offer to all Holders of Notes and all
holders of other Indebtedness that is PARI PASSU with the Notes containing
provisions similar to those set forth in this Indenture with respect to offers
to purchase or redeem with the proceeds of sales of assets to
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purchase the maximum principal amount of Notes and such other PARI PASSU
Indebtedness that may be purchased out of the Excess Proceeds. The offer price
in any Asset Sale Offer will be equal to 100% of the principal amount plus
accrued and unpaid interest and Liquidated Damages, if any, to the date of
purchase, and will be payable in cash. If any Excess Proceeds remain after
consummation of an Asset Sale Offer, the Company may use such Excess Proceeds
for any purpose not otherwise prohibited by this Indenture. If the aggregate
principal amount of Notes and such other PARI PASSU Indebtedness tendered into
such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall
select the Notes and such other PARI PASSU Indebtedness to be purchased on a pro
rata basis based on the principal amount of Notes and such other PARI PASSU
Indebtedness tendered. Upon completion of each Asset Sale Offer, the amount of
Excess Proceeds shall be reset at zero.
The Company will comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the Asset Sales
provisions of this Indenture, the Company will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under the Asset Sale provisions of this Indenture by virtue of such
conflict.
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate (each, an "Affiliate Transaction"), unless:
(i) such Affiliate Transaction is on terms that are no less
favorable to the Company or the relevant Restricted Subsidiary than
those that would have been obtained in a comparable transaction by the
Company or such Restricted Subsidiary with an unrelated Person; and
(ii) the Company delivers to the Trustee:
(A) with respect to any Affiliate
Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $5.0
million, a resolution of the Board of Directors set
forth in an Officers' Certificate certifying that such
Affiliate Transaction complies with this covenant and
that such Affiliate Transaction has been approved by a
majority of the disinterested members of the Board of
Directors; and
(B) with respect to any Affiliate
Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $15.0
million, an opinion as to the fairness to the Company or
the relevant Restricted Subsidiary of such Affiliate
Transaction from a financial point of view issued by an
accounting, appraisal or investment banking firm of
national standing.
The following items shall not be deemed to be Affiliate
Transactions and, therefore, will
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not be subject to the provisions of the prior paragraph:
(i) any employment agreement entered into by the Company or
any of its Restricted Subsidiaries in the ordinary course of business and
consistent with the past practice of the Company or such Restricted Subsidiary;
(ii) transactions between or among the Company and/or its
Restricted Subsidiaries;
(iii) payment of reasonable directors fees to Persons who are
not otherwise Affiliates of the Company;
(iv) sales of Equity Interests (other than Disqualified
Stock) to Affiliates of the Company;
(v) Restricted Payments that are permitted by the provisions
of this Indenture described in Section 4.07 hereof;
(vi) providing indemnity to officers, directors, or employees
of the Company or any of its Subsidiaries as determined in good faith by the
Board of Directors of the Company;
(vii) the payment of customary management, consulting and
advisory fees and related expenses to Hidden Creek or its affiliates consistent
with past practices, including, without limitation, in connection with
acquisitions, divestitures or financings by DASI, the Company or any of the
Company's Restricted Subsidiaries;
(viii) the existence of, or the performance by the Company or
any of its Restricted Subsidiaries of its obligations under the terms of, any
agreement to which it is a party as of the date of this Indenture, and any
similar agreements which it may enter into thereafter; provided, however, that
the existence of, or the performance by the Company or any of its Restricted
Subsidiaries of obligations under, any future amendment to any such existing
agreement or under any similar agreement entered into after the date of this
Indenture shall only be permitted by this clause to the extent that the terms of
any such amendment or similar agreement are not disadvantageous to the Holders
in any material respect;
(ix) transactions effected as part of a Qualified
Securitization Transaction;
(x) transactions with customers, joint venture partners,
clients and suppliers, in each case in the ordinary course of business and
otherwise in compliance with the terms of this Indenture which are fair to the
Company or its Restricted Subsidiaries, in the reasonable determination of the
Board of Directors of the Company;
(xi) the grant of stock options, restricted stock or similar
rights to the Company's employees, directors and consultants pursuant to plans
approved by the Board of Directors of the Company; and
(xii) loans or advances to employees or consultants in the
ordinary course of business and consistent with past practices, which are
approved by a majority of the Board of Directors of the Company in good faith.
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SECTION 4.12. LIENS.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
suffer to exist any Lien of any kind on any asset now owned or hereafter
acquired, except Permitted Liens.
SECTION 4.13. LIMITATION ON FOREIGN INDEBTEDNESS.
The Company shall not permit any Restricted Subsidiary of the
Company that is not a Guarantor to, directly or indirectly, incur any
Indebtedness (including Acquired Indebtedness) unless:
(i) after giving effect to the incurrence of such
Indebtedness and the receipt of the application of the proceeds thereof;
(A) if, as a result of the incurrence of
such Indebtedness such Restricted Subsidiary will become
subject to any restriction or limitation on the payment
of dividends or the making of other distributions,
(1) the Fixed Charge Coverage Ratio of
Restricted Subsidiaries that are not Guarantors
(determined on a pro forma basis for the last four
fiscal quarters for which financial statements are
available at the date of determination) is greater than
2.5 to 1; and
(2) the Company's Fixed Charge Coverage
Ratio (determined on a pro forma basis for the last four
fiscal quarters of the Company for which financial
statements are available at the date of determination)
is greater than 2.0 to 1; and
(B) in any other case, the Company's Fixed
Charge Coverage Ratio (determined on a pro forma basis
for the last four fiscal quarters of the Company for
which financial statements are available at the date of
determination) is greater than 2.0 to 1; and
(ii) no Default or Event of Default shall have occurred and
be continuing at the time or as a consequence of the incurrence of such
Indebtedness.
In the event that any Indebtedness incurred pursuant to clause
(1)(b) of the foregoing paragraph is proposed to be amended, modified or
otherwise supplemented such that the payment of dividends or the making of other
distributions becomes subject in any manner to any restriction or limitation,
the Company will not permit the Restricted Subsidiary to so amend, modify or
supplement such Indebtedness unless such Indebtedness could be incurred pursuant
to the terms of clause (1)(a) of the foregoing paragraph.
All calculations required under the prior two paragraphs hereof
shall be made in a manner consistent with the calculations required under
Section 4.09.
SECTION 4.14. CORPORATE EXISTENCE.
Subject to Article 5 hereof, the Company shall do or cause to be
done all things necessary
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to preserve and keep in full force and effect (i) its corporate existence, and
the corporate, partnership or other existence of each of its Subsidiaries, in
accordance with the respective organizational documents (as the same may be
amended from time to time) of the Company or any such Subsidiary and (ii) the
rights (charter and statutory), licenses and franchises of the Company and its
Subsidiaries; PROVIDED, HOWEVER, that the Company shall not be required to
preserve any such right, license or franchise, or the corporate, partnership or
other existence of any of its Subsidiaries, if the Board of Directors shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and its Subsidiaries, taken as a whole, and that the
loss thereof is not adverse in any material respect to the Holders of the Notes.
SECTION 4.15. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
If a Change of Control occurs, each Holder of Notes will have
the right to require the Company to repurchase all or any part (equal to E1,000
or an integral multiple thereof) of that Holder's Notes pursuant to the offer
described below (the "Change of Control Offer"). In the Change of Control
Offer, the Company shall offer a Change of Control Payment in cash equal to 101%
of the aggregate principal amount of Notes repurchased plus accrued and unpaid
interest and Liquidated Damages thereon, if any, to the date of purchase (the
"Change of Control Payment"). Within 30 days following any Change of Control,
unless the Company has exercised its right to redeem the Notes pursuant to
Section 3.07, the Company shall mail a notice to the Trustee and each Holder
describing the transaction or transactions that constitute the Change of Control
and offering to repurchase Notes on the purchase date specified in such notice
(which must be no earlier than 30 days nor later than 60 days from the date such
notice is mailed, other than as required by law (the "Change of Control Payment
Date")), pursuant to the procedures required by this Indenture and described in
such notice. The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change of Control. To the extent that
the provisions of any securities laws or regulations conflict with the Change of
Control provisions of this Indenture, the Company will comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under the Change of Control provisions of this
Indenture by virtue of such conflict.
On the Change of Control Payment Date, the Company shall, to the
extent lawful:
(i) accept for payment all Notes or portions thereof
properly tendered pursuant to the Change of Control Offer;
(ii) deposit with the Paying Agent an amount equal to the
Change of Control Payment in respect of all Notes or portions thereof so
tendered; and
(iii) deliver or cause to be delivered to the Trustee the
Notes so accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions thereof being purchased
by the Company.
The Paying Agent shall promptly mail to each Holder of Notes so
tendered the Change of Control Payment for such Notes, and the Trustee shall
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased
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portion of the Notes surrendered, if any; PROVIDED that each such new Note shall
be in a principal amount of E1,000 or an integral multiple thereof.
Prior to complying with any of the provisions of this Section
4.15, but in any event within 90 days following a Change of Control, the Company
will either repay all outstanding Senior Debt or obtain the requisite consents,
if any, under all agreements governing outstanding Senior Debt to permit the
repurchase of Notes required by this covenant. If the Company does not obtain
such consents or repay such borrowings, the Company will be prohibited from
purchasing the Notes. The Company will publicly announce the results of the
Change of Control Offer on or as soon as practicable after the Change of Control
Payment Date.
The Company shall not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Section 4.15 and Section 3.09 hereof and
purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.
SECTION 4.16. NO SENIOR SUBORDINATED DEBT.
The Company shall not incur, create, issue, assume, guarantee or
otherwise become liable for any Indebtedness that is subordinate or junior in
right of payment to any Indebtedness of the Company and senior in any respect in
right of payment to the Notes. No Guarantor shall incur, create, issue, assume,
guarantee or otherwise become liable for any Indebtedness that is subordinate or
junior in right of payment to any Indebtedness of such Guarantor and senior in
any respect in right of payment to such Guarantor's Guaranty.
SECTION 4.17. ADDITIONAL SUBSIDIARY GUARANTIES.
If the Company or any of its Restricted Subsidiaries acquires or
creates another material Domestic Restricted Subsidiary after the date of this
Indenture and the newly acquired or created material Domestic Restricted
Subsidiary guarantees any obligations under any Credit Facility, then that newly
acquired or created Domestic Restricted Subsidiary must become a Guarantor and
execute a supplemental indenture and deliver an Opinion of Counsel to the
Trustee within 10 Business Days of the date on which it guaranteed any
obligation under any of the Credit Facilities. If any Subsidiary that is not a
Guarantor at any time guaranties Indebtedness of the Company or a Guarantor, the
Company will cause such Subsidiary to simultaneously execute and deliver
supplemental indentures providing for the Guaranty of the payment of the Notes
by such Subsidiary.
SECTION 4.18. DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES.
The Board of Directors may designate any Restricted Subsidiary
to be an Unrestricted Subsidiary if that designation would not cause a Default.
If a Restricted Subsidiary is designated as an Unrestricted Subsidiary, the
aggregate fair market value of all outstanding Investments owned by the Company
and its Restricted Subsidiaries in the Subsidiary so designated shall be deemed
to be an Investment made as of the time of such designation and shall either
reduce the amount available for Restricted Payments under clause (iii)(B) of the
first paragraph of Section 4.07 hereof or reduce the amount available for future
Investments, as the Company shall determine. That designation shall only be
permitted if such Investment would be permitted at the time and if such
Restricted Subsidiary otherwise
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meets the definition of an Unrestricted Subsidiary. The Board of Directors may
redesignate any Unrestricted Subsidiary to be a Restricted Subsidiary if the
redesignation would not cause a Default.
SECTION 4.19. PAYMENTS FOR CONSENT.
The Company and DASI will not, and will not permit any of their
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration to or for the benefit of any Holder of Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Notes issued thereunder unless such consideration is
offered to be paid and is paid to all Holders of such Notes that consent, waive
or agree to amend in the time frame set forth in the solicitation documents
relating to such consent, waiver or agreement.
ARTICLE 5.
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Company shall not, directly or indirectly: (1) consolidate
or merge with or into another Person (whether or not the Company is the
surviving corporation); or (2) sell, assign, transfer, convey or otherwise
dispose of all or substantially all of the properties or assets of the Company
and its Restricted Subsidiaries, taken as a whole, in one or more related
transactions, to another Person; unless:
(i) either: (a) the Company is the surviving corporation; or
(b) the Person formed by or surviving any such consolidation or merger
(if other than the Company) or to which such sale, assignment, transfer,
conveyance or other disposition shall have been made is a corporation,
partnership, limited liability company or trust organized or existing
under the laws of the United States, any state thereof or the District
of Columbia;
(ii) the Person formed by or surviving any such consolidation
or merger (if other than the Company) or the Person to which such sale,
assignment, transfer, conveyance or other disposition shall have been
made assumes all the obligations of the Company under the Notes, this
Indenture and the Registration Rights Agreement pursuant to agreements
reasonably satisfactory to the Trustee;
(iii) immediately after such transaction no Default or Event
of Default exists; and
(iv) the Company or the Person formed by or surviving any
such consolidation or merger (if other than the Company) or to which
such sale, assignment, transfer, conveyance or other disposition shall
have been made shall, on the date of such transaction after giving pro
forma effect thereto and any related financing transactions as if the
same had occurred at the beginning of the applicable four-quarter
period, be permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in the first
paragraph of Section 4.09 hereof.
In addition, the Company shall not, directly or indirectly,
lease all or substantially all of its properties or assets, in one or more
related transactions, to any other Person. The provisions of this Section 5.01
shall not apply to a sale, assignment, transfer, conveyance or other disposition
of assets between or among the Company and any of its Restricted Subsidiaries.
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SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment,
transfer, conveyance or other disposition of all or substantially all of the
assets of the Company in accordance with Section 5.01 hereof, the successor
corporation formed by such consolidation or into or with which the Company is
merged or to which such sale, assignment, transfer, conveyance or other
disposition is made shall succeed to, and be substituted for (so that from and
after the date of such consolidation, merger, sale, conveyance or other
disposition, the provisions of this Indenture referring to the "Company" shall
refer instead to the successor corporation and not to the Company), and may
exercise every right and power of the Company under this Indenture with the same
effect as if such successor Person had been named as the Company herein;
PROVIDED, HOWEVER, that the predecessor Company shall not be relieved from the
obligation to pay the principal of and interest on the Notes except in the case
of a sale of all of the Company's assets that meets the requirements of Section
5.01 hereof.
ARTICLE 6.
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
Each of the following is an Event of Default:
(i) default for 30 days in the payment when due of interest
on, or Liquidated Damages with respect to, any Notes, whether or not
prohibited by Article 10 hereof;
(ii) default in payment when due of the principal of or
premium, if any, on the Notes, whether or not prohibited by Article 10
hereof;
(iii) failure by the Company or any of its Restricted
Subsidiaries to comply with any of the provisions of Section 5.01
hereof;
(iv) failure by the Company or any of its Restricted
Subsidiaries for 60 days after specified notice to comply with any of
the other agreements in this Indenture or the Notes;
(v) default under any mortgage, indenture or instrument
under which there is issued and outstanding any Indebtedness for money
borrowed by the Company or any of its Restricted Subsidiaries (or the
payment of which is guaranteed by the Company or any of its Restricted
Subsidiaries) whether such Indebtedness or guarantee now exists, or is
created after the date hereof, if that default:
(A) is caused by a failure to pay principal
of, or interest or premium, if any, on such Indebtedness
prior to the expiration of the grace period provided in
such Indebtedness on the date of such default (a
"Payment Default"); or
(B) results in the acceleration of such
Indebtedness prior to its express maturity,
and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under
which there has been a Payment Default or the maturity of
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which has been so accelerated, aggregates $20.0 million or more;
(vi) failure by the Company or any of its Restricted
Subsidiaries to pay final judgments aggregating in excess of $20.0
million, which judgments are not paid, vacated, discharged or stayed or
non-appealable for a period of 60 days and in the event such judgment is
covered by insurance, an enforcement proceeding has been commenced by
any creditor upon such judgment or decree which is not properly stayed;
(vii) the Company or any of its Significant Subsidiaries or
any group of Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary pursuant to or within the meaning of Bankruptcy
Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for
relief against it in an involuntary case;
(C) consents to the appointment of a
custodian of it or for all or substantially all of its
property
(D) makes a general assignment for the
benefit of its creditors; or
(E) generally is not paying its debts as
they become due; or
(viii) a court of competent jurisdiction enters an
order or decree under any Bankruptcy Law that:
(A) is for relief against the Company or any
of its Significant Subsidiaries or any group of
Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary in an involuntary case;
(B) appoints a custodian of the Company or
any of its Significant Subsidiaries or any group of
Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary or for all or substantially all
of the property of the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as
a whole, would constitute a Significant Subsidiary; or
(C) orders the liquidation of the Company or
any of its Significant Subsidiaries or any group of
Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary;
and the order or decree remains unstayed and in
effect for 60 consecutive days; or
(ix) except as permitted by this Indenture, any Guaranty is
held in any judicial proceeding to be unenforceable or invalid or shall
cease for any reason to be in full force and effect or any Guarantor, or
any Person acting on behalf of any Guarantor, shall deny or disaffirm
its obligations under such Guarantor's Guaranty.
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SECTION 6.02. ACCELERATION.
If any Event of Default (other than an Event of Default
specified in clause (vii) or (viii) of Section 6.01 hereof with respect to the
Company, any Significant Subsidiary or any group of Subsidiaries that, taken as
a whole, would constitute a Significant Subsidiary) occurs and is continuing,
the Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare the principal of and accrued interest on all the
Notes to be due and payable by notice in writing to the Company and the Trustee
specifying the respective Event of Default and that such notice is a "notice of
acceleration" (the "Acceleration Notice"), and the same (1) shall become
immediately due and payable or (2) if there are any amounts outstanding under
the Credit Agreement, shall become immediately due and payable upon the first to
occur of an acceleration under the Credit Agreement or five Business Days after
receipt by the Company and the Representative under the Credit Agreement of such
Acceleration Notice but only if such Event of Default is then continuing. Upon
any such declaration, but subject to the immediately preceding sentence, the
Notes shall become due and payable immediately. Notwithstanding the foregoing,
if an Event of Default specified in clause (vii) or (viii) of Section 6.01
hereof occurs with respect to the Company, all outstanding Notes shall be due
and payable immediately without further action or notice. The Holders of a
majority in aggregate principal amount of the then outstanding Notes by written
notice to the Trustee may on behalf of all of the Holders rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default (except nonpayment of
principal, interest or premium that has become due solely because of the
acceleration) have been cured or waived.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal, premium, if
any, and interest and Liquidated Damages, if any, on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Holder of a Note in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal
amount of the then outstanding Notes by notice to the Trustee may on behalf of
the Holders of all of the Notes waive an existing Default or Event of Default
and its consequences hereunder, except a continuing Default or Event of Default
in the payment of the principal of, premium and Liquidated Damages, if any, or
interest on, the Notes (including in connection with an offer to purchase)
(PROVIDED, HOWEVER, that the Holders of a majority in aggregate principal amount
of the then outstanding Notes may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration).
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.
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SECTION 6.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee or exercising any
trust or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture that the Trustee determines
may be unduly prejudicial to the rights of other Holders of Notes or that may
involve the Trustee in personal liability.
SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this
Indenture or the Notes only if:
(a) the Holder of a Note gives to the Trustee
written notice of a continuing Event of Default;
(b) the Holders of at least 25% in principal amount
of the then outstanding Notes make a written request to the Trustee to
pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer
and, if requested, provide to the Trustee indemnity satisfactory to the
Trustee against any loss, liability or expense;
(d) the Trustee does not comply with the request
within 60 days after receipt of the request and the offer and, if
requested, the provision of indemnity; and
(e) during such 60-day period the Holders of a
majority in principal amount of the then outstanding Notes do not give
the Trustee a direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the
rights of another Holder of a Note or to obtain a preference or priority over
another Holder of a Note.
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right
of any Holder of a Note to receive payment of principal, premium and Liquidated
Damages, if any, and interest on the Note, on or after the respective due dates
expressed in the Note (including in connection with an offer to purchase), or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(i) or (ii)
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Company for the whole
amount of principal of, premium and Liquidated Damages, if any, and interest
remaining unpaid on the Notes and interest on overdue principal and, to the
extent lawful, interest and such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
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SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall
be deemed to authorize the Trustee to authorize or consent to or accept or adopt
on behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article, it
shall pay out the money in the following order:
FIRST: to the Trustee, its agents and attorneys for amounts due
under Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
SECOND: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium and Liquidated Damages, if any, and interest,
ratably, without preference or priority of any kind, according to the amounts
due and payable on the Notes for principal, premium and Liquidated Damages, if
any and interest, respectively; and
THIRD: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any
payment to Holders of Notes pursuant to this Section 6.10.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as a Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in
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the suit, having due regard to the merits and good faith of the claims or
defenses made by the party litigant. This Section does not apply to a suit by
the Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a
suit by Holders of more than 10% in principal amount of the then outstanding
Notes.
ARTICLE 7.
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by
the express provisions of this Indenture and the Trustee need perform
only those duties that are specifically set forth in this Indenture and
no others, and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements of
this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph
(b) of this Section;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it is
proved that the Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the
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Trustee may agree in writing with the Company. Money held in trust by the
Trustee need not be segregated from other funds except to the extent required by
law.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document believed by
it to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall
not be liable for any action it takes or omits to take in good faith in reliance
on such Officers' Certificate or Opinion of Counsel. The Trustee may consult
with counsel and the written advice of such counsel or any Opinion of Counsel
shall be full and complete authorization and protection from liability in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
(g) Except with respect to Section 4.01, the Trustee shall have no
duty to inquire as to the performance of the Company with respect to the
covenants contained in Article 4. In addition, the Trustee shall not be deemed
to have knowledge of an Event of Default except (i) any Default or Event of
Default occurring pursuant to Sections 4.01, 6.01(i) or 6.01(ii) or (ii) any
Default or Event of Default of which the Trustee shall have received written
notification or obtained actual knowledge.
(h) Delivery of reports, information and documents to the Trustee
under Section 4.03 is for informational purposes only and the Trustee's receipt
of the foregoing shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Company's compliance with any of their covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the SEC for
permission to continue as trustee or
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resign. Any Agent may do the same with like rights and duties. The Trustee is
also subject to Sections 7.10 and 7.11 hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the Notes, it
shall not be accountable for the Company's use of the proceeds from the Notes or
any money paid to the Company or upon the Company's direction under any
provision of this Indenture, it shall not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee,
and it shall not be responsible for any statement or recital herein or any
statement in the Notes or any other document in connection with the sale of the
Notes or pursuant to this Indenture other than its certificate of
authentication.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if
it is known to the Trustee, the Trustee shall mail to Holders of Notes a notice
of the Default or Event of Default within 90 days after it occurs. Except in
the case of a Default or Event of Default in payment of principal of, premium,
if any, or interest on any Note, the Trustee may withhold the notice if and so
long as a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of the Holders of the Notes.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each November 1 beginning with the
November 1 following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee shall mail to the Holders of the Notes a brief report
dated as of such reporting date that complies with TIA Section 313(a) (but if
no event described in TIA Section 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA Section 313(b)(2). The Trustee shall also transmit by
mail all reports as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders
of Notes shall be mailed to the Company and filed with the SEC and each stock
exchange on which the Notes are listed in accordance with TIA Section 313(d).
The Company shall promptly notify the Trustee when the Notes are listed on any
stock exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company and the Guarantors shall pay to the Trustee from
time to time reasonable compensation for its acceptance of this Indenture and
services hereunder. The Trustee's compensation shall not be limited by any law
on compensation of a trustee of an express trust. The Company and the
Guarantors shall reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.
The Company and the Guarantors shall, jointly and severally,
indemnify the Trustee against any and all losses, liabilities or expenses
incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, including the costs and
expenses of
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enforcing this Indenture against the Company and the Guarantors (including this
Section 7.07) and defending itself against any claim (whether asserted by the
Company or any Holder or any other person) or liability in connection with the
exercise or performance of any of its powers or duties hereunder, except to the
extent any such loss, liability or expense may be attributable to its negligence
or bad faith. The Trustee shall notify the Company and the Guarantors promptly
of any claim for which it may seek indemnity. Failure by the Trustee to so
notify the Company shall not relieve the Company of its obligations hereunder.
The Company shall defend the claim and the Trustee shall cooperate in the
defense. The Trustee may have separate counsel and the Company shall pay the
reasonable fees and expenses of such counsel. The Company and the Guarantors
need not pay for any settlement made without its consent, which consent shall
not be unreasonably withheld.
The obligations of the Company and the Guarantors under this
Section 7.07 shall survive the satisfaction and discharge of this Indenture.
To secure the Company's and the Guarantors' payment obligations
in this Section, the Trustee shall have a Lien prior to the Notes on all money
or property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Notes. Such Lien shall survive the
satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(vii) or (viii) hereof occurs, the
expenses and the compensation for the services (including the fees and expenses
of its agents and counsel) are intended to constitute expenses of administration
under any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA Section
313(b)(2) to the extent applicable.
The Company's and the Guarantors' obligations under this Section
7.07 and any claim arising hereunder shall survive the resignation or removal of
any Trustee, the discharge of the Company's obligations pursuant to Article 8
hereof and any rejection or termination under any Bankruptcy Law.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged
from the trust hereby created by so notifying the Company. The Holders of Notes
of a majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a custodian or public officer takes charge of the Trustee or its
property; or
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(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company,
or the Holders of Notes of at least 10% in principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note
who has been a Holder of a Note for at least six months, fails to comply with
Section 7.10, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee, PROVIDED
all sums owing to the Trustee hereunder have been paid and subject to the Lien
provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee
pursuant to this Section 7.08, the Company's obligations under Section 7.07
hereof shall continue for the benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate trustee power, that is subject to supervision or examination by
federal or state authorities and that has a combined capital and surplus of at
least $100.0 million or be part of a bank holding company with a combined
capital and surplus of at least $100 million as set forth in its most recent
published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
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ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors
evidenced by a resolution set forth in an Officers' Certificate, at any time,
elect to have either Section 8.02 or 8.03 hereof be applied to all outstanding
Notes upon compliance with the conditions set forth below in this Article Eight.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.02, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to
have been discharged from its obligations with respect to all outstanding Notes
and all obligations of the Guarantors shall be deemed to have been discharged
with respect to their obligations on the date the conditions set forth below are
satisfied (hereinafter, "LEGAL DEFEASANCE"). For this purpose, Legal Defeasance
means that the Company shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Notes and Guaranties, respectively,
which shall thereafter be deemed to be "outstanding" only for the purposes of
Section 8.05 hereof and the other Sections of this Indenture referred to in (a)
and (b) below, and to have satisfied all its other obligations under such Notes
and this Indenture (and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging the same), except for
the following provisions which shall survive until otherwise terminated or
discharged hereunder: (a) the rights of Holders of outstanding Notes to receive
solely from the trust fund described in Section 8.04 hereof, and as more fully
set forth in such Section, payments in respect of the principal of, premium, if
any, and interest and Liquidated Damages, if any, on such Notes when such
payments are due, (b) the Company's obligations with respect to such Notes under
Article 2 and Section 4.02 hereof, (c) the rights, powers, trusts, duties and
immunities of the Trustee hereunder and the Company's and the Guarantors'
obligations in connection therewith and (d) this Article Eight. Subject to
compliance with this Article Eight, the Company may exercise its option under
this Section 8.02 notwithstanding the prior exercise of its option under Section
8.03 hereof.
SECTION 8.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.03, the Company and each of the Guarantors
shall, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, be released from their respective obligations under the covenants
contained in Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17
and 4.18 hereof and clauses (iii) and (iv) of Section 5.01 hereof with respect
to the outstanding Notes on and after the date the conditions set forth in
Section 8.04 are satisfied (hereinafter, "COVENANT DEFEASANCE"), and the Notes
shall thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Notes shall not be deemed outstanding for accounting purposes). For this
purpose, Covenant Defeasance means that, with respect to the outstanding Notes,
the Company may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document and
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such omission to comply shall not constitute a Default or an Event of Default
under Section 6.01 hereof, but, except as specified above, the remainder of this
Indenture and such Notes shall be unaffected thereby. In addition, upon the
Company's exercise under Section 8.01 hereof of the option applicable to this
Section 8.03 hereof, subject to the satisfaction of the conditions set forth in
Section 8.04 hereof, Sections 5.01(iii) and 5.01(iv) and Sections 6.01(iv)
through 6.01(vi) hereof shall not constitute Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of
either Section 8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, cash in United States dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of, premium, if any, and interest and
Liquidated Damages, if any on the outstanding Notes on the stated maturity or on
the applicable redemption date, as the case may be and the Company must specify
whether the Notes are being defeased to maturity or to a particular redemption
date;
(b) in the case of an election under Section 8.02 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that (A) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the date of this Indenture, there has been a change in the
applicable federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Covenant Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the incurrence of Indebtedness all or a portion of the proceeds
of which will be used to defease the Notes pursuant to this Article Eight
concurrently with such incurrence) or insofar as Sections 6.01(vii) or
6.01(viii) hereof is concerned, at any time in the period ending on the 91st day
after the date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under the Senior Credit
Facilities or any other material agreement or instrument
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(other than this Indenture) to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Opinion of
Counsel (which may be subject to customary exceptions) to the effect that,
assuming no intervening bankruptcy of the Company or any Guarantor between the
date of deposit and the 91st day following the deposit, and assuming that no
Holder is an "insider" of the Company under applicable bankruptcy law, after the
91st day following the deposit, the trust funds will not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders over any other creditors of the Company or with the
intent of defeating, hindering, delaying or defrauding any other creditors of
the Company; and
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this
Section 8.05, the "Trustee") pursuant to Section 8.04 hereof in respect of the
outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as
Paying Agent) as the Trustee may determine, to the Holders of such Notes of all
sums due and to become due thereon in respect of principal, premium, if any, and
interest, but such money need not be segregated from other funds except to the
extent required by law.
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.04 hereof or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article Eight to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon the
request of the Company any money or non-callable Government Securities held by
it as provided in Section 8.04 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.04(a) hereof), are in excess of the amount thereof
that would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
SECTION 8.06. REPAYMENT TO COMPANY.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of, premium,
if any, or interest on any Note and
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remaining unclaimed for two years after such principal, and premium, if any, or
interest has become due and payable shall be paid to the Company on its request
or (if then held by the Company) shall be discharged from such trust; and the
Holder of such Note shall thereafter, as a secured creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; PROVIDED, HOWEVER, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the New York Times and The
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such
money then remaining will be repaid to the Company.
SECTION 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United
States dollars or non-callable Government Securities in accordance with
Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the Company's obligations under
this Indenture and the Notes shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as
the Trustee or Paying Agent is permitted to apply all such money in accordance
with Section 8.02 or 8.03 hereof, as the case may be; PROVIDED, HOWEVER, that,
if the Company makes any payment of principal of, premium, if any, or interest
on any Note following the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money held by the Trustee or Paying Agent.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.02 of this Indenture, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture or the Notes
without the consent of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place
of certificated Notes;
(c) to provide for the assumption of the Company's obligations to
the Holders of the Notes by a successor to the Company or a Guarantor pursuant
to Article 5 hereof;
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the legal
rights hereunder of any Holder of the Note;
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(f) to provide for the issuance of Additional Notes in accordance
with the limitations set forth in this Indenture as of the date hereof; or
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(g) to allow any Guarantor to execute a supplemental indenture
and/or a Guaranty with respect to the Notes.
Upon the request of the Company accompanied by a resolution of
its Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon receipt by the Trustee of the documents
described in Section 7.02 hereof, the Trustee shall join with the Company and
the Guarantors in the execution of any amended or supplemental Indenture
authorized or permitted by the terms of this Indenture and to make any further
appropriate agreements and stipulations that may be therein contained, but the
Trustee shall not be obligated to enter into such amended or supplemental
Indenture that affects its own rights, duties or immunities under this Indenture
or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.02, the Company and
the Trustee may amend or supplement this Indenture (including Section 3.09, 4.10
and 4.15 hereof), the Guaranties and the Notes with the consent of the Holders
of at least a majority in principal amount of the Notes (including Additional
Notes, if any) then outstanding voting as a single class (including consents
obtained in connection with a tender offer or exchange offer for, or purchase
of, the Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing
Default or Event of Default (other than a Default or Event of Default in the
payment of the principal of, premium, if any, or interest on the Notes, except a
payment default resulting from an acceleration that has been rescinded) or
compliance with any provision of this Indenture, the Guaranties or the Notes may
be waived with the consent of the Holders of a majority in principal amount of
the then outstanding Notes (including Additional Notes, if any) voting as a
single class (including consents obtained in connection with a tender offer or
exchange offer for, or purchase of, the Notes). Without the consent of at least
75% in principal amount of the Notes then outstanding (including consents
obtained in connection with a tender offer or exchange offer for, or purchase
of, such Notes), no waiver or amendment to this Indenture may make any change in
the provisions of Article 10 hereof that adversely affects the rights of any
Holder of Notes. Section 2.08 hereof shall determine which Notes are considered
to be "outstanding" for purposes of this Section 9.02.
Upon the request of the Company accompanied by a resolution of
its Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid,
and upon receipt by the Trustee of the documents described in Section 7.02
hereof, the Trustee shall join with the Company in the execution of such amended
or supplemental Indenture unless such amended or supplemental Indenture directly
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of
Notes under this Section 9.02 to approve the particular form of any proposed
amendment or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section
becomes effective, the Company shall mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or
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waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a majority in
aggregate principal amount of the Notes (including Additional Notes, if any)
then outstanding voting as a single class may waive compliance in a particular
instance by the Company with any provision of this Indenture or the Notes.
However, without the consent of each Holder affected, an amendment or waiver
under this Section 9.02 may not (with respect to any Notes held by a
non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must consent
to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Note
or alter the provisions with respect to the redemption of the Notes (other than
provisions relating to Sections 3.09 or 4.15 hereof);
(c) reduce the rate of or change the time for payment of interest on
any Note;
(d) waive a Default or Event of Default in the payment of principal
of, or interest or premium, or Liquidated Damages, if any, on the Notes (except
a rescission of acceleration of the Notes by the Holders of at least a majority
in aggregate principal amount of the Notes (including Additional Notes, if any)
and a waiver of the payment default that resulted from such acceleration);
(e) make any Note payable in money other than that stated in the
Notes;
(f) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive payments
of principal of, or interest or premium or Liquidated Damages, if any, on the
Notes;
(g) waive a redemption payment with respect to any Note (other than
a payment required by Sections 3.09 or 4.15 hereof); or
(h) release any Guarantor from any of its obligations under its
Guaranty or this Indenture, except in accordance with the terms of this
Indenture; or
(i) make any change in Section 6.04 or 6.07 hereof or in the
preceding amendment and waiver provisions.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes
shall be set forth in an amended or supplemental Indenture that complies with
the TIA as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the Holder of a
Note and every subsequent Holder of a Note or portion of a Note that evidences
the same debt as the consenting Holder's Note, even if notation of the consent
is not made on any Note. However, any such Holder of a Note or subsequent
Holder of a Note may revoke the consent as to its Note if the Trustee receives
written notice of revocation before the date the waiver, supplement or amendment
becomes effective. An amendment, supplement or waiver
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becomes effective in accordance with its terms and thereafter binds every
Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an
amendment, supplement or waiver on any Note thereafter authenticated. The
Company in exchange for all Notes may issue and the Trustee shall, upon receipt
of an Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note
shall not affect the validity and effect of such amendment, supplement or
waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article 9 if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Company may not sign an amendment or supplemental Indenture until the Board
of Directors approves it. In executing any amended or supplemental indenture,
the Trustee shall be entitled to receive and (subject to Section 7.01 hereof)
shall be fully protected in relying upon, in addition to the documents required
by Section 11.04 hereof, an Officer's Certificate and an Opinion of Counsel
stating that the execution of such amended or supplemental indenture is
authorized or permitted by this Indenture.
ARTICLE 10.
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE.
The Company agrees, and each Holder by accepting a Note agrees,
that the Indebtedness evidenced by the Notes is subordinated in right of
payment, to the extent and in the manner provided in this Article 10, to the
prior payment in full of all Senior Debt of the Company, including Senior Debt
incurred after the date of this Indenture, and that the subordination is for the
benefit of the holders of Senior Debt.
SECTION 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company, in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, in
an assignment for the benefit of creditors or any marshalling of the Company's
assets and liabilities:
(i) holders of Senior Debt shall be entitled to receive
payment in full of all Obligations due in respect of such Senior Debt
(including interest after the commencement of any such proceeding at the
rate specified in the applicable Senior Debt) before Holders of the
Notes shall be entitled to receive any payment with respect to the Notes
(except that Holders may receive and retain (i) Permitted Junior
Securities and (ii) payments and other distributions made from any
defeasance trust created pursuant to Section 8.01 hereof); and
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(ii) until all Obligations with respect to Senior Debt (as
provided in subsection (i) above) are paid in full, any distribution to
which Holders would be entitled but for this Article 10 shall be made to
the holders of Senior Debt (except that Holders of Notes may receive (i)
Permitted Junior Securities and (ii) payments and other distributions
made from any defeasance trust created pursuant to Section 8.01 hereof),
as their interests may appear.
SECTION 10.03. DEFAULT ON DESIGNATED SENIOR DEBT.
(a) The Company may not make any payment or distribution to the
Trustee or any Holder in respect of Obligations with respect to the Notes and
may not acquire from the Trustee or any Holder any Notes for cash or property
(other than (i) Permitted Junior Securities and (ii) payments and other
distributions made from any defeasance trust created pursuant to Section 8.01
hereof) until all principal and other Obligations with respect to the Senior
Debt have been paid in full if:
(i) a default in the payment of any principal or other
Obligations with respect to Designated Senior Debt occurs and is
continuing beyond any applicable grace period in the agreement,
indenture or other document governing such Designated Senior Debt; or
(ii) a default, other than a payment default, on Designated
Senior Debt occurs and is continuing on any series of Designated Senior
Debt that permits holders of that series to accelerate its maturity and
the Trustee receives a notice of the default (a "PAYMENT BLOCKAGE
NOTICE") from the Company or the holders (or a Representative of the
holders) of the Designated Senior Debt. If the Trustee receives any
such Payment Blockage Notice, no subsequent Payment Blockage Notice
shall be effective for purposes of this Section unless and until (i) at
least 360 days shall have elapsed since the delivery of the immediately
prior Payment Blockage Notice and (ii) all scheduled payments of
principal, interest and premium and Liquidated Damages, if any, on the
Notes that have come due have been paid in full in cash. No nonpayment
default that existed or was continuing on the date of delivery of any
Payment Blockage Notice to the Trustee shall be, or be made, the basis
for a subsequent Payment Blockage Notice unless such default shall have
been cured or waived for a period of 90 days.
(b) The Company may and shall resume payments on and distributions
in respect of the Notes and may acquire them upon the earlier of:
(i) in the case of a payment default, upon the date on which
such default is cured or waived, or
(ii) in the case of a nonpayment default, the earlier of the
date on which such nonpayment default is cured or waived or 179 days
after the date on which the applicable Payment Blockage Notice is
received, unless the maturity of any Designated Senior Debt has been
accelerated.
SECTION 10.04. ACCELERATION OF NOTES.
If payment of the Notes is accelerated because of an Event of
Default, the Company shall promptly notify holders of Senior Debt of the Company
of the acceleration.
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SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder receives any payment
of any Obligations with respect to the Notes (except in Permitted Junior
Securities or payments and other distributions made from any defeasance trust
created pursuant to Section 8.01 hereof) at a time when the payment is
prohibited by this Article 10 and the Trustee or such Holder, as applicable, has
actual knowledge (provided by formal notice in accordance with Section 10.06
hereof in the case of the Trustee) that such payment is prohibited by Section
10.03 hereof, such payment shall be held by the Trustee or such Holder, in trust
for the benefit of, and shall be paid forthwith over and delivered, upon written
request, to, the holders of Senior Debt as their interests may appear or their
Representative under the indenture or other agreement (if any) pursuant to which
Senior Debt may have been issued, as their respective interests may appear, for
application to the payment of all Obligations with respect to Senior Debt
remaining unpaid to the extent necessary to pay such Obligations in full in
accordance with their terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Debt.
With respect to the holders of Senior Debt, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article 10, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt, and shall not be liable to any
such holders if the Trustee shall pay over or distribute to or on behalf of
Holders or the Company or any other Person money or assets to which any holders
of Senior Debt shall be entitled by virtue of this Article 10, except if such
payment is made as a result of the willful misconduct or gross negligence of the
Trustee.
SECTION 10.06. NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying
Agent of any facts known to the Company that would cause a payment of any
Obligations with respect to the Notes to violate this Article 10, but failure to
give such notice shall not affect the subordination of the Notes to the Senior
Debt as provided in this Article 10.
SECTION 10.07. SUBROGATION.
After all Senior Debt is paid in full and until the Notes are
paid in full, Holders of Notes shall be subrogated (equally and ratably with all
other Indebtedness PARI PASSU with the Notes) to the rights of holders of Senior
Debt to receive distributions applicable to Senior Debt to the extent that
distributions otherwise payable to the Holders of Notes have been applied to the
payment of Senior Debt. A distribution made under this Article 10 to holders
of Senior Debt that otherwise would have been made to Holders of Notes is not,
as between the Company and Holders, a payment by the Company on the Notes.
SECTION 10.08. RELATIVE RIGHTS.
This Article 10 defines the relative rights of Holders of Notes
and holders of Senior Debt. Nothing in this Indenture shall:
(1) impair, as between the Company and Holders of Notes, the
obligation of the Company, which is absolute and unconditional, to pay principal
of and interest on the Notes in
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accordance with their terms;
(2) affect the relative rights of Holders of Notes and
creditors of the Company other than their rights in relation to holders of
Senior Debt; or
(3) prevent the Trustee or any Holder of Notes from
exercising its available remedies upon a Default or Event of Default, subject to
the rights of holders and owners of Senior Debt to receive distributions and
payments otherwise payable to Holders of Notes.
If the Company fails because of this Article 10 to pay principal
of or interest on a Note on the due date, the failure is still a Default or
Event of Default.
SECTION 10.09. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Debt to enforce the
subordination of the Indebtedness evidenced by the Notes shall be impaired by
any act or failure to act by the Company or any Holder or by the failure of the
Company or any Holder to comply with this Indenture.
SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to
holders of Senior Debt, the distribution may be made and the notice given to
their Representative.
Upon any payment or distribution of assets of the Company
referred to in this Article 10, the Trustee and the Holders of Notes shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Holders of Notes for the purpose of ascertaining the Persons
entitled to participate in such distribution, the holders of the Senior Debt and
other Indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 10.
SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee shall have received at its
Corporate Trust Office at least five Business Days prior to the date of such
payment written notice of facts that would cause the payment of any Obligations
with respect to the Notes to violate this Article 10. Only the Company or a
Representative may give the notice. Nothing in this Article 10 shall impair the
claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold
Senior Debt of the Company with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights.
SECTION 10.12. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of Notes, by the Holder's acceptance thereof,
authorizes and directs the
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Trustee on such Holder's behalf to take such action as may be necessary or
appropriate to effectuate the subordination as provided in this Article 10, and
appoints the Trustee to act as such Holder's attorney-in-fact for any and all
such purposes. If the Trustee does not file a proper proof of claim or proof of
debt in the form required in any proceeding referred to in Section 6.09 hereof
at least 30 days before the expiration of the time to file such claim the
holders of the Senior Debt of the Company or their Representatives are hereby
authorized to file an appropriate claim for and on behalf of the Holders of the
Notes.
SECTION 10.13. AMENDMENTS.
The provisions of this Article 10 shall not be amended or
modified without the written consent of the holders of all Senior Debt.
ARTICLE 11.
GUARANTIES
SECTION 11.01. GUARANTY.
Subject to this Article 11, each of the Guarantors hereby,
jointly and severally, unconditionally guarantees to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee and its successors
and assigns, irrespective of the validity and enforceability of this Indenture,
the Notes or the obligations of the Company hereunder or thereunder, that:
(a) the principal of and interest on the Notes will be promptly paid in full
when due, whether at maturity, by acceleration, redemption or otherwise, and
interest on the overdue principal of and interest on the Notes, if any, if
lawful, and all other obligations of the Company to the Holders or the Trustee
hereunder or thereunder will be promptly paid in full or performed, all in
accordance with the terms hereof and thereof; and (b) in case of any extension
of time of payment or renewal of any Notes or any of such other obligations,
that same will be promptly paid in full when due or performed in accordance with
the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise. Failing payment when due of any amount so guaranteed
or any performance so guaranteed for whatever reason, the Guarantors shall be
jointly and severally obligated to pay the same immediately. Each Guarantor
agrees that this is a guarantee of payment and not a guarantee of collection.
The Guarantors hereby agree that their obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Notes with respect
to any provisions hereof or thereof, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of a guarantor.
Each Guarantor hereby waives diligence, presentment, demand of payment, filing
of claims with a court in the event of insolvency or bankruptcy of the Company,
any right to require a proceeding first against the Company, protest, notice and
all demands whatsoever and covenants that this Guaranty shall not be discharged
except by complete performance of the obligations contained in the Notes and
this Indenture.
If any Holder or the Trustee is required by any court or
otherwise to return to the Company, the Guarantors or any custodian, trustee,
liquidator or other similar official acting in relation to either the Company or
the Guarantors, any amount paid by either to the Trustee or such Holder, this
Guaranty, to the extent theretofore discharged, shall be reinstated in full
force and effect.
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Each Guarantor agrees that it shall not be entitled to any right
of subrogation in relation to the Holders in respect of any obligations
guaranteed hereby until payment in full of all obligations guaranteed hereby.
Each Guarantor further agrees that, as between the Guarantors, on the one hand,
and the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 hereof
for the purposes of this Guaranty, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such obligations as provided in Article 6 hereof, such obligations (whether or
not due and payable) shall forthwith become due and payable by the Guarantors
for the purpose of this Guaranty. The Guarantors shall have the right to seek
contribution from any non-paying Guarantor so long as the exercise of such right
does not impair the rights of the Holders under the Guaranty.
SECTION 11.02. SUBORDINATION OF GUARANTY.
The Obligations of each Guarantor under its Guaranty pursuant to
this Article 11 shall be junior and subordinated to the Senior Debt of such
Guarantor on the same basis as the Notes are junior and subordinated to Senior
Debt of the Company. For the purposes of the foregoing sentence, the Trustee
and the Holders shall have the right to receive and/or retain payments by any of
the Guarantors only at such times as they may receive and/or retain payments in
respect of the Notes pursuant to this Indenture, including Article 10 hereof.
SECTION 11.03. LIMITATION ON GUARANTOR LIABILITY.
Each Guarantor other than DASI, and by its acceptance of Notes,
each Holder, hereby confirms that it is the intention of all such parties that
the Guaranty of such Guarantor other than DASI not constitute a fraudulent
transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or
state law to the extent applicable to any Guaranty. To effectuate the foregoing
intention, the Trustee, the Holders and the Guarantors other than DASI hereby
irrevocably agree that the obligations of such Guarantor under its Guaranty and
this Article 11 shall be limited to the maximum amount as will, after giving
effect to such maximum amount and all other contingent and fixed liabilities of
such Guarantor that are relevant under such laws, and after giving effect to any
collections from, rights to receive contribution from or payments made by or on
behalf of any other Guarantor in respect of the obligations of such other
Guarantor under this Article 11, result in the obligations of such Guarantor
under its Guaranty not constituting a fraudulent transfer or conveyance.
SECTION 11.04. EXECUTION AND DELIVERY OF GUARANTY.
To evidence its Guaranty set forth in Section 11.01, each
Guarantor hereby agrees that a notation of such Guaranty substantially in the
form included in Exhibit E shall be endorsed by an Officer of such Guarantor on
each Note authenticated and delivered by the Trustee and that this Indenture
shall be executed on behalf of such Guarantor by its President or one of its
Vice Presidents.
Each Guarantor hereby agrees that its Guaranty set forth in
Section 11.01 shall remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Guaranty.
If an Officer whose signature is on this Indenture or on the
Guaranty no longer holds that
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office at the time the Trustee authenticates the Note on which a Guaranty is
endorsed, the Guaranty shall be valid nevertheless.
The delivery of any Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the Guaranty
set forth in this Indenture on behalf of the Guarantors.
In the event that the Company creates or acquires any new
Subsidiaries subsequent to the date of this Indenture, if required by Section
4.17 hereof, the Company shall cause such Subsidiaries to execute supplemental
indentures to this Indenture in the form of Exhibit F hereto and Guaranties in
accordance with Section 4.17 hereof and this Article 11, to the extent
applicable.
SECTION 11.05. GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
Except as otherwise provided in Section 11.06, a Guarantor may
not sell or otherwise dispose of all or substantially all of its assets to, or
consolidate with or merge with or into (whether or not such Guarantor is the
surviving Person) another Person, other than the Company or another Guarantor,
unless:
(a) immediately after giving effect to that transaction, no Default
or Event of Default exists; and
(b) either:
(i) the Person acquiring the property in any such sale or
disposition or the Person formed by or surviving any such consolidation
or merger assumes all the obligations of that Guarantor under this
Indenture, its Guaranty and the Registration Rights Agreement, pursuant
to a supplemental indenture and appropriate collateral documents in form
and substance reasonably satisfactory to the Trustee; or
(ii) the Net Proceeds of such sale or other disposition are
applied in accordance with the applicable provisions of this Indenture.
In case of any such consolidation, merger, sale or conveyance
and upon the assumption by the successor Person, by supplemental indenture,
executed and delivered to the Trustee and satisfactory in form to the Trustee,
of the Guaranty endorsed upon the Notes and the due and punctual performance of
all of the covenants and conditions of this Indenture to be performed by the
Guarantor, such successor Person shall succeed to and be substituted for the
Guarantor with the same effect as if it had been named herein as a Guarantor.
Such successor Person thereupon may cause to be signed any or all of the
Guaranties to be endorsed upon all of the Notes issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee. All the Guaranties so issued shall in all respects have the same legal
rank and benefit under this Indenture as the Guaranties theretofore and
thereafter issued in accordance with the terms of this Indenture as though all
of such Guaranties had been issued at the date of the execution hereof.
Except as set forth in Articles 4 and 5 hereof, and
notwithstanding clauses (a) and (b) above, nothing contained in this Indenture
or in any of the Notes shall prevent any consolidation or merger of a Guarantor
with or into the Company or another Guarantor, or shall prevent any sale or
conveyance of the property of a Guarantor as an entirety or substantially as an
entirety to the Company or another Guarantor.
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SECTION 11.06. RELEASES FOLLOWING SALE OF ASSETS.
The Guaranty of a Guarantor will be released:
(a) in connection with any sale or other disposition of all or
substantially all of the assets of that Guarantor (including by way of merger or
consolidation), to a Person that is not (either before or after giving effect to
such transaction) a Restricted Subsidiary of the Company, if the Guarantor
applies the Net Proceeds of that sale or other disposition in accordance with
the applicable provisions of this Indenture, including without limitation
Section 4.10 hereof; or
(b) in connection with any sale of all of the capital stock of a
Guarantor to a Person that is not (either before or after giving effect to such
transaction) a Restricted Subsidiary of the Company, if the Company applies the
Net Proceeds of that sale in accordance with the applicable provisions of this
Indenture, including without limitation Section 4.10 hereof; or
(c) if the Company properly designates any Restricted Subsidiary
that is a Guarantor as an Unrestricted Subsidiary.
Upon delivery by the Company to the Trustee of an Officers'
Certificate and an Opinion of Counsel to the effect that such sale or other
disposition was made by the Company in accordance with the applicable provisions
of this Indenture, including without limitation Section 4.10 hereof, the Trustee
shall execute any documents reasonably required in order to evidence the release
of any Guarantor from its obligations under its Guaranty.
Any Guarantor not released from its obligations under its
Guaranty shall remain liable for the full amount of principal of and interest on
the Notes and for the other obligations of any Guarantor under this Indenture as
provided in this Article 11.
ARTICLE 12.
MISCELLANEOUS
SECTION 12.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by TIA Section 318(c), the imposed duties
shall control.
SECTION 12.02. NOTICES.
Any notice or communication by the Company, any Guarantor or the
Trustee to the others is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return receipt requested),
telex, telecopier or overnight air courier guaranteeing next day delivery, to
the others' address
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If to the Company and/or any Guarantor:
Dura Operating Corp.
4508 IDS Center
Minneapolis, MN 55402
Telecopier No.: (612) 332-2012
Attention: Chief Financial Officer
With a copy to:
Kirkland & Ellis
200 East Randolph Drive
Chicago, IL 60601
Telecopier No.: (312) 861-2200
Attention: Dennis M. Myers
If to the Trustee:
U.S. Bank Trust National Association
180 E. 5th Street
St. Paul, Minnesota 55101
Telecopier No.: (651) 244-0711
Attention: Corporate Trust Administration
The Company, any Guarantor or the Trustee, by notice to the
others may designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to
Holders) shall be deemed to have been duly given: at the time delivered by hand,
if personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first
class mail, certified or registered, return receipt requested, or by overnight
air courier guaranteeing next day delivery to its address shown on the register
kept by the Registrar. Any notice or communication shall also be so mailed to
any Person described in TIA Section 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.
86
<PAGE>
SECTION 12.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders may communicate pursuant to TIA Section 312(b) with
other Holders with respect to their rights under this Indenture or the Notes.
The Company, the Trustee, the Registrar and anyone else shall have the
protection of TIA Section 312(c).
SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance
reasonably satisfactory to the Trustee (which shall include the statements set
forth in Section 12.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 12.05 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.
SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of
TIA Section 314(e) and shall include:
(a) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or
she has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition has
been satisfied; and
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.
SECTION 12.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
SECTION 12.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No past, present or future director, officer, employee,
incorporator or stockholder of the
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<PAGE>
Company or any Guarantor, as such, shall have any liability for any obligations
of the Company or such Guarantor under the Notes, the Guaranties, this Indenture
or for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Notes.
SECTION 12.08. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE
USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE GUARANTIES WITHOUT GIVING
EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 12.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture,
loan or debt agreement of the Company or its Subsidiaries or of any other
Person. Any such indenture, loan or debt agreement may not be used to interpret
this Indenture.
SECTION 12.10. SUCCESSORS.
All agreements of the Company in this Indenture and the Notes
shall bind its successors. All agreements of the Trustee in this Indenture
shall bind its successors. All agreements of each Guarantor in this Indenture
shall bind its successors, except as otherwise provided in Section 11.
SECTION 12.11. SEVERABILITY.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 12.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement.
SECTION 12.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
[INDENTURE SIGNATURE PAGES FOLLOW]
88
<PAGE>
[INDENTURE SIGNATURE PAGES]
Dated as of April 22, 1999
DURA OPERATING CORP.
By: /s/ David Bovee
-----------------------------------
Name:
Title:
DURA AUTOMOTIVE SYSTEMS, INC.
By: /s/ David Bovee
-----------------------------------
Name:
Title:
DURA AUTOMOTIVE SYSTEMS INC.
COLUMN SHIFTER OPERATIONS
UNIVERSAL TOOL & STAMPING
COMPANY INC.
DURA AUTOMOTIVE SYSTEMS CABLE
OPERATIONS, INC.
ADWEST ELECTRONICS, INC.
ADWEST WESTERN AUTOMOTIVE, INC.
X.E. CO.
EXCEL OF TENNESSEE, L.P.
EXCEL CORPORATION
EXCEL INDUSTRIES OF MICHIGAN, INC.
ANDERSON INDUSTRIES, INC.
ATWOOD INDUSTRIES, INC.
HYDRO FLAME CORPORATION
ATWOOD AUTOMOTIVE INC.
MARK I MOLDED PLASTICS, INC.
MARK I MOLDED PLASTICS OF
TENNESSEE, INC.
By: /s/ David Bovee
-----------------------------------
Name:
Title:
U.S. BANK TRUST NATIONAL ASSOCIATION
By: /s/ R. Prokosch
-----------------------------------
Name:
Title:
89
<PAGE>
EXHIBIT A
(FACE OF NOTE)
CUSIP__________
ISIN___________
9% Senior Subordinated Notes due 2009
No. _______ EURO__________
DURA OPERATING CORP.
promises to pay to _____________________, or registered assigns, the principal
sum of _______________________ (______________) on May 1, 2009.
Interest Payment Dates: May 1 and November 1, commencing November 1, 1999.
Record Dates: April 15 and October 15.
Dated: April 22, 1999
DURA OPERATING CORP.
By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title:
This is one of the
Notes referred to in the
within-mentioned Indenture:
U.S. BANK TRUST NATIONAL ASSOCIATION
By: _______________________________
Authorized Signatory
Dated: April 22,1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
A-1
<PAGE>
(BACK OF NOTE)
9% Senior Subordinated Notes due 2009
THE NOTE (OR ITS PREDECESSORS) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED, AND THE NOTE EVIDENCED HEREBY MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE NOTE EVIDENCED HEREBY
IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER
OR ANOTHER EXEMPTION UNDER THE SECURITIES ACT. THE HOLDER OF THE NOTE EVIDENCED
HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH NOTE MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (I) (A) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT), PURCHASING FOR ITS OWN ACCOUNT IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (B) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 OF THE SECURITIES ACT, (C)
OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 OF REGULATION S UNDER THE SECURITIES ACT OR (D) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT PROVIDED THAT IN THE CASE OF A TRANSFER PURSUANT TO CLAUSE (D)
SUCH TRANSFER IS EFFECTED BY THE DELIVERY TO THE TRANSFEREE OF DEFINITIVE
SECURITIES REGISTERED IN ITS NAME (OR ITS NOMINEES NAME) IN THE BOOKS MAINTAINED
BY THE REGISTRAR, AND IS SUBJECT TO THE RECEIPT BY THE REGISTRAR (AND THE
COMPANY, IF THEY SO REQUEST) OF A CERTIFICATION OF THE TRANSFEROR AND AN OPINION
OF COUNSEL TO THE EFFECT THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES
ACT, (II) TO THE COMPANY OR (III) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, ANDEACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE NOTE EVIDENCED HEREBY OF THE
RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY
BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY
BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(A) OF THE
INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE, AND (IV) THIS GLOBAL
NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT
OF THE COMPANY.
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<PAGE>
Capitalized terms used herein shall have the meanings assigned to
them in the Indenture referred to below unless otherwise indicated.
1. INTEREST. Dura Operating Corp., a Delaware corporation (the
"COMPANY"), promises to pay interest on the principal amount of this Note at 9%
per annum from April 22, 1999 until maturity and shall pay the Liquidated
Damages payable pursuant to Section 5 of the Registration Rights Agreement
referred to below. The Company shall pay interest and Liquidated Damages
semi-annually on May 1 and November 1 of each year, or if any such day is not a
Business Day, on the next succeeding Business Day (each an "INTEREST PAYMENT
DATE"). Interest on the Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the date of
issuance; PROVIDED that if there is no existing Default in the payment of
interest, and if this Note is authenticated between a record date referred to on
the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; PROVIDED, FURTHER, that
the first Interest Payment Date shall be November 1, 1999. The Company shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand at a rate that is 1% per annum in excess of the rate then in effect; it
shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated Damages
(without regard to any applicable grace periods) from time to time on demand at
the same rate to the extent lawful. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the
Notes (except defaulted interest) and Liquidated Damages to the Persons who are
registered Holders of Notes at the close of business on the April 15 or October
15 next preceding the Interest Payment Date, even if such Notes are canceled
after such record date and on or before such Interest Payment Date, except as
provided in Section 2.12 of the Indenture with respect to defaulted interest.
Subject to the provisions of Article 2 of the Indenture, the Notes will be
payable as to principal, premium and Liquidated Damages, if any, and interest at
the office or agency of the Company maintained for such purpose within or
without the City and State of New York or, subject to any applicable laws and
regulations, at the office of the paying agent in Luxembourg or, at the option
of the Company, payment of interest and Liquidated Damages may be made by check
mailed to the Holders at their addresses set forth in the register of Holders,
and provided that payment by wire transfer of immediately available funds will
be required with respect to principal of and interest, premium and Liquidated
Damages on, all Global Notes and all other Notes the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent. Subject
to the provisions of Article 2 of the Indenture, such payment shall be in such
coin or currency of the European Community as at the time of payment is legal
tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, The Industrial Bank
of Japan (Luxembourg) S.A., will act as Paying Agent and Registrar. If and as
long as the Notes are listed on the Luxembourg Stock Exchange, the Company will
maintain a paying agent in Luxembourg. The Company may change any Paying Agent
or Registrar without notice to any Holder. The Company or any of its
Subsidiaries may act in any such capacity.
4. INDENTURE. The Company issued the Notes under an Indenture,
dated as of April 22, 1999 (the "INDENTURE"), among the Company, the Guarantors
and the Trustee. The terms of the Notes include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (15 U.S. Code Sections 77aaa-77bbbb). The Notes are subject to
all such
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<PAGE>
terms, and Holders are referred to the Indenture and such Act for a
statement of such terms. To the extent any provision of this Note conflicts with
the express provisions of the Indenture, the provisions of the Indenture shall
govern and be controlling. The Notes are obligations of the Company initially
limited to EURO 100.0 million in aggregate principal amount. The Indenture
pursuant to which this Note is issued provides that up to EURO 50.0 million of
Additional Notes may be issued thereunder.
5. OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this Paragraph
5, the Notes will not be redeemable at the Company's option prior to May 1,
2004. Thereafter, the Notes will be subject to redemption at any time at the
option of the Company, in whole or in part, upon not less than 30 nor more than
60 days' notice, at the redemption prices (expressed as percentages of principal
amount) set forth below plus accrued and unpaid interest and Liquidated Damages
thereon to the applicable redemption date, if redeemed during the twelve-month
period beginning on May 1 of the years indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2004 ................................ 104.50%
2005 ................................ 103.00%
2006 ................................ 101.50%
2007 and thereafter ................. 100.00%
</TABLE>
(b) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, before May 1, 2002, the Company may on any one or more occasions
redeem up to 35% of the aggregate principal amount of Notes issued under the
Indenture (calculated after giving effect to any issuance of Additional Notes)
at a redemption price of 101% of the principal amount thereof, PLUS accrued and
unpaid interest and Liquidated Damages thereon, if any, to the redemption date,
with the net cash proceeds of any Equity Offerings; PROVIDED that at least 65%
of the aggregate principal amount of Notes issued under the Indenture remains
outstanding immediately after the occurrence of such redemption (excluding Notes
held by Dura Automotive Systems, Inc., the Company and their respective
Subsidiaries); and PROVIDED FURTHER that such redemption shall occur within 90
days of the date of the closing of any such Equity Offering.
6. MANDATORY REDEMPTION. Except as set forth in paragraph 7
below, the Company shall not be required to make mandatory redemption or sinking
fund payments with respect to the Notes.
A-4
<PAGE>
7. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company shall be
required to make an offer (a "CHANGE OF CONTROL OFFER") to repurchase all or any
part (equal to EURO 1,000 or an integral multiple thereof) of each Holder's
Notes at a purchase price equal to 101% of the aggregate principal amount
thereof plus accrued and unpaid interest and Liquidated Damages thereon, if any,
to the date of purchase (the "CHANGE OF CONTROL PAYMENT"). Within 30 days
following any Change of Control, the Company shall mail a notice to each Holder
setting forth the procedures governing the Change of Control Offer as required
by the Indenture.
(b) When the aggregate amount of Excess Proceeds exceeds $20.0
million, the Company will make an Asset Sale Offer to all Holders of Notes and
all holders of other Indebtedness that is PARI PASSU with the Notes containing
provisions similar to those set forth in the Indenture with respect to offers to
purchase or redeem with the proceeds of sales of assets to purchase the maximum
principal amount of Notes and such other PARI PASSU Indebtedness that may be
purchased out of the Excess Proceeds. The offer price in any Asset Sale Offer
will be equal to 100% of the principal amount plus accrued and unpaid interest
and Liquidated Damages, if any, to the date of purchase, and will be payable in
cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer,
the Company may use such Excess Proceeds for any purpose not otherwise
prohibited by the Indenture. If the aggregate principal amount of Notes and such
other PARI PASSU Indebtedness tendered into such Asset Sale Offer exceeds the
amount of Excess Proceeds, the Trustee shall select the Notes and such other
PARI PASSU Indebtedness to be purchased on a pro rata basis based on the
principal amount of the Notes and such other PARI PASSU Indebtedness tendered.
Holders of Notes that are the subject of an offer to purchase will receive an
Asset Sale Offer from the Company prior to any related purchase date and may
elect to have such Notes purchased by completing the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Notes.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed
at least 30 days but not more than 60 days before the redemption date to each
Holder whose Notes are to be redeemed at its registered address. Notes in
denominations larger than EURO 1,000 may be redeemed in part but only in whole
multiples of EURO 1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on Notes or
portions thereof called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
registered form without coupons in denominations of EURO 1,000 and integral
multiples of EURO 1,000. The transfer of Notes may be registered and Notes may
be exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Company need not
exchange or register the transfer of any Note or portion of a Note selected for
redemption, except for the unredeemed portion of any Note being redeemed in
part. Also, the Company need not exchange or register the transfer of any Notes
for a period of 15 days before a selection of Notes to be redeemed or during the
period between a record date and the corresponding Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note will
be treated as its owner for all purposes.
A-5
<PAGE>
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture, the Guaranties or the Notes may be amended or
supplemented with the consent of the Holders of at least a majority in principal
amount of the then outstanding Notes and Additional Notes, if any, voting as a
single class, and any existing default or compliance with any provision of the
Indenture, the Guaranties or the Notes may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Notes and
Additional Notes, if any, voting as a single class. Without the consent of any
Holder of a Note, the Indenture, the Guaranties or the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's or Guarantor's obligations to
Holders of the Notes in case of a merger or consolidation or sale of all or
substantially all of the Company's assets, to make any change that would provide
any additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder, to
comply with the requirements of the Commission in order to effect or maintain
the qualification of the Indenture under the Trust Indenture Act, to provide for
the issuance of Additional Notes in accordance with the limitations set forth in
the Indenture, or to allow any Guarantor to execute a supplemental indenture to
the Indenture and/or a Guarantee with respect to the Notes.
12. DEFAULTS AND REMEDIES. Events of Default include: (i)
default for 30 days in the payment when due of interest, on, or Liquidated
Damages with respect to, any Notes whether or not prohibited by Article 10 of
the Indenture; (ii) the default in payment when due of the principal of or
premium, if any, on the Notes, whether or not prohibited by Article 10 of the
Indenture; (iii) failure by the Company or any of its Restricted Subsidiaries to
comply with the provisions of Section 5.01 of the Indenture; (iv) failure by the
Company or any of its Restricted Subsidiaries for 60 days after specified notice
from the Trustee or the Holders of at least 25% of the outstanding principal
amount of the Notes to comply with any of the other agreements in the Indenture
or the Notes; (v) default under any mortgage, indenture or instrument under
which there is issued and outstanding any Indebtedness for money borrowed by the
Company or any of its Restricted Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries) whether such
Indebtedness or guarantee now exists, or is created after the date of the
Indenture, if that default: (A) is caused by a failure to pay principal of, or
interest or premium, if any, on such Indebtedness prior to the expiration of the
grace period provided in such Indebtedness on the date of such default (a
"PAYMENT DEFAULT"); or (B) results in the acceleration of such Indebtedness
prior to its express maturity, and, in each case, the principal amount of any
such Indebtedness, together with the principal amount of any other such
Indebtedness the maturity of which has been so accelerated, aggregates $20.0
million or more; (vi) failure by the Company or any of its Restricted
Subsidiaries to pay final judgments aggregating in excess of $20.0 million,
which judgments are not paid, vacated, discharged or stayed or non-appealable
for a period of 60 days and in the event such judgment is covered by insurance,
an enforcement proceeding has been commenced by any creditor upon such judgment
or decree which is not promptly stayed; (vii) except as permitted by the
Indenture, any Guaranty shall be held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full force and
effect or any Guarantor, or any Person acting on behalf of any Guarantor, shall
deny or disaffirm its obligations under its Subsidiary Guaranty or DASI, or any
Person acting on behalf of DASI, shall deny or disaffirm its obligations under
the Parent Guaranty; and (viii) certain events of bankruptcy or insolvency with
respect to DASI, the Company or any of its Significant Subsidiaries. If any
Event of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the then outstanding Notes may declare all the
Notes to be due and payable. Notwithstanding the foregoing, in the case of an
Event of Default arising from certain events of bankruptcy or insolvency, all
outstanding Notes will become due and payable without further action or notice.
Holders may not enforce the Indenture or the Notes except as provided in the
Indenture. Subject to certain limitations,
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<PAGE>
Holders of a majority in principal amount of the then outstanding Notes may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of the Notes notice of any continuing Default or Event of
Default (except a Default or Event of Default relating to the payment of
principal or interest or Liquidated Damages) if it determines that withholding
notice is in their interest. The Holders of a majority in aggregate principal
amount of the Notes then outstanding by notice to the Trustee may on behalf of
the Holders of all of the Notes waive any existing Default or Event of Default
and its consequences under the Indenture except a continuing Default or Event of
Default in the payment of interest or Liquidated Damages on, or the principal
of, the Notes. The Company is required to deliver to the Trustee annually a
statement regarding compliance with the Indenture, and the Company is required
upon becoming aware of an Default or Event of Default, to deliver to the Trustee
a statement specifying such Default or Event of Default.
13. SUBORDINATION. Each Holder by accepting a Note agrees that
the Indebtedness evidenced by the Note is subordinated in right of payment, to
the extent and in the manner provided in Article 10 of the Indenture, to the
prior payment in full of all Senior Debt, including Senior Debt incurred after
the date of the Indenture, and that the subordination is for the benefit of the
holders of Senior Debt.
14. GUARANTEES. The payment of principal of, premium, and
interest and Liquidated Damages, if any, on the Notes are unconditionally
guaranteed, jointly and severally, on a senior subordinated basis by the
Guarantors.
15. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise deal with
the Company or its Affiliates, as if it were not the Trustee.
16. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, of the Company or any Guarantor, as such, shall not
have any liability for any obligations of the Company or the Guarantors under
the Notes, the Indenture, the Subsidiary Guaranties, the Parent Guaranty or for
any claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes.
17. AUTHENTICATION. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
18. ABBREVIATIONS. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
19. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders of
Notes under the Indenture, Holders of Restricted Global Notes and Restricted
Definitive Notes shall have all the rights set forth in the Registration Rights
Agreement, dated as of April 22, 1999, between the Company and the parties named
on the signature pages thereof or, in the case of Additional Notes, Holders of
Restricted Global Notes and Restricted Definitive Notes shall have the rights
set forth in one or more registration rights agreements, if any, between the
Company and the other parties thereto, relating to rights given by
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<PAGE>
the Company to the purchasers of any Additional Notes (collectively, the
"REGISTRATION RIGHTS AGREEMENT").
20. CUSIP AND ISIN NUMBERS. The Company has caused CUSIP or
ISIN numbers to be printed on the Notes and the Trustee may use CUSIP or ISIN
numbers in notices of redemption as a convenience to Holders. No representation
is made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
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<PAGE>
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Dura Operating Corp.
4508 IDS Center
Minneapolis, MN 55402
Telecopier No.: (612) 332-2012
Attention: Scott D. Rued
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<PAGE>
Assignment Form
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to:
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint_________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
- --------------------------------------------------------------------------------
Date:
--------------
Your Signature:
------------------------------
(Sign exactly as your name appears on the face of
this Note)
Tax Identification No:
SIGNATURE GUARANTEE:
---------------------------------
Signatures must be guaranteed by an "eligible
guarantor institution" meeting the
requirements of the Registrar, which
requirements include membership or
participation in the Security Transfer Agent
Medallion Program ("STAMP") or such other
"signature guarantee program" as may be
determined by the Registrar in addition to,
or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of
1934, as amended.
A-10
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the box below:
/ / Section 4.10 / / Section 4.15
If you want to elect to have only part of the Note purchased by
the Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased: EURO ________
Date:
----------------
Your Signature:
------------------------------
(Sign exactly as your name appears on the face of
this Note)
Tax Identification No:
-----------------------
SIGNATURE GUARANTEE:
---------------------------------
Signatures must be guaranteed by an "eligible
guarantor institution" meeting the
requirements of the Registrar, which
requirements include membership or
participation in the Security Transfer Agent
Medallion Program ("STAMP") or such other
"signature guarantee program" as may be
determined by the Registrar in addition to,
or in substitution for, STAMP, all in
accordance with the Securities Exchange Act
of 1934, as amended.
A-11
<PAGE>
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following exchanges of a part of this Global Note for an
interest in another Global Note or for a Definitive Note, or exchanges of a part
of another Global Note or Definitive Note for an interest in this Global Note,
have been made:
<TABLE>
<CAPTION>
Principal Amount
Amount of Amount of increase of this Global Note Signature of
decrease in in Principal following such authorized officer
Principal Amount Amount of this decrease (or of Trustee or Note
Date of Exchange of this Global Note Global Note increase) Custodian
- ---------------- ------------------- ------------------ ------------------- ------------------
<S> <C> <C> <C> <C>
</TABLE>
A-12
<PAGE>
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Dura Operating Corp.
4508 IDS Center
Minneapolis, MN 55402
Telecopier No.: (612) 332-2335
Attention: Scott D. Rued
U.S. Bank Trust National Association
180 E. 5th Street
St. Paul, Minnesota 55101
Attention: Corporate Trust Administration
Re: 9% SENIOR SUBORDINATED NOTES DUE 2009
Reference is hereby made to the Indenture, dated as of April 22,
1999 (the "INDENTURE"), among Dura Operating Corp., as issuer (the "COMPANY"),
the guarantors party thereto and U.S. Bank Trust National Association, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
______________, (the "TRANSFEROR") owns and proposes to transfer
the Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of EURO ___________ in such Note[s] or interests (the
"TRANSFER"), to __________ (the "TRANSFEREE"), as further specified in Annex A
hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer is
being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "SECURITIES ACT"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.
2. / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
THE REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO REGULATION S. The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and, accordingly, the Transferor hereby
B-1
<PAGE>
further certifies that (i) the Transfer is not being made to a person in the
United States and (x) at the time the buy order was originated, the Transferee
was outside the United States or such Transferor and any Person acting on its
behalf reasonably believed and believes that the Transferee was outside the
United States or (y) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S under the Securities Act, (iii) the transaction is not
part of a plan or scheme to evade the registration requirements of the
Securities Act and (iv) if the proposed transfer is being made prior to the
expiration of the Restricted Period, the transfer is not being made to a U.S.
Person or for the account or benefit of a U.S. Person (other than an Initial
Purchaser). Upon consummation of the proposed transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on Transfer enumerated in the Private
Placement Legend printed on the Regulation S Global Note and/or the Definitive
Note and in the Indenture and the Securities Act.
3. / / CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE IAI GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO ANY PROVISION
OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The Transfer is
being effected in compliance with the transfer restrictions applicable to
beneficial interests in Restricted Global Notes and Restricted Definitive Notes
and pursuant to and in accordance with the Securities Act and any applicable
blue sky securities laws of any state of the United States, and accordingly the
Transferor hereby further certifies that (check one):
(a) / / such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act;
or
(b) / / such Transfer is being effected to the Company or a
subsidiary thereof;
or
(c) / / such Transfer is being effected pursuant to an
effective registration statement under the Securities Act and in compliance with
the prospectus delivery requirements of the Securities Act; or
(d) / / such Transfer is being effected to an Institutional
Accredited Investor and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A, Rule 144 or Rule 904,
and the Transferor hereby further certifies that it has not engaged in any
general solicitation within the meaning of Regulation D under the Securities Act
and the Transfer complies with the transfer restrictions applicable to
beneficial interests in a Restricted Global Note or Restricted Definitive Notes
and the requirements of the exemption claimed, which certification is supported
by (1) a certificate executed by the Transferee in the form of Exhibit D to the
Indenture and (2) if such Transfer is in respect of a principal amount of Notes
at the time of transfer of less than $250,000, an Opinion of Counsel provided by
the Transferor or the Transferee (a copy of which the Transferor has attached to
this certification), to the effect that such Transfer is in compliance with the
Securities Act. Upon consummation of the proposed transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will be subject to the restrictions on transfer enumerated in the
B-2
<PAGE>
Private Placement Legend printed on the IAI Global Note and/or the Definitive
Notes and in the Indenture and the Securities Act.
4. / / Check if Transferee will take delivery of a beneficial interest in an
Unrestricted Global Note or of an Unrestricted Definitive Note.
(a) / / CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The
Transfer is being effected pursuant to and in accordance with Rule 144 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.
(b) / / CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of any
state of the United States and (ii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Notes, on Restricted Definitive Notes and in the
Indenture.
(c) / / CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i)
The Transfer is being effected pursuant to and in compliance with an exemption
from the registration requirements of the Securities Act other than Rule 144,
Rule 903 or Rule 904 and in compliance with the transfer restrictions contained
in the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company.
-----------------------------------
[Insert Name of Transferor]
By:
--------------------------------
Name:
Title:
Dated:_________,______
B-3
<PAGE>
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) / / a beneficial interest in the:
(i) / / 144A Global Note (CUSIP______ ), or
(ii) / / Regulation S Global Note (ISIN ______)
(b) / / a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) / / a beneficial interest in the:
(i) / / 144A Global Note (CUSIP______ ), or
(ii) / / Regulation S Global Note (ISIN ______), or
(iii) / / Unrestricted Global Note (CUSIP______)
(b) / / a Restricted Definitive Note; or
(c) / / an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-4
<PAGE>
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Dura Operating Corp.
4508 IDS Center
Minneapolis, MN 55402
Telecopier No.: (612) 332-2012
Attention: Scott D. Rued
U.S. Bank Trust National Association
180 E. 5th Street
St. Paul, Minnesota 55101
Attention: Corporate Trust Department
Re: 9% SENIOR SUBORDINATED NOTES DUE 2009
(CUSIP or ISIN)
Reference is hereby made to the Indenture, dated as of April 22,
1999 (the "INDENTURE"), among Dura Operating Corp., as issuer (the "COMPANY"),
the guarantors party thereto and U.S. Bank Trust National Association, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
____________, (the "OWNER") owns and proposes to exchange the
Note[s] or interest in such Note[s] specified herein, in the principal amount of
EURO ____________ in such Note[s] or interests (the "EXCHANGE"). In connection
with the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN AN UNRESTRICTED GLOBAL NOTE
(a) / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In
connection with the Exchange of the Owner's beneficial interest in a Restricted
Global Note for a beneficial interest in an Unrestricted Global Note in an equal
principal amount, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner's own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to the
Global Notes and pursuant to and in accordance with the United States Securities
Act of 1933, as amended (the "SECURITIES ACT"), (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
beneficial interest in an Unrestricted Global Note is being acquired in
compliance with any applicable blue sky securities laws of any state of the
United States.
(b) / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for an
Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and
C-1
<PAGE>
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Definitive Note is being acquired in compliance with any applicable blue sky
securities laws of any state of the United States.
(c) / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(d) / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN RESTRICTED GLOBAL NOTES
(a) / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for a
Restricted Definitive Note with an equal principal amount, the Owner hereby
certifies that the Restricted Definitive Note is being acquired for the Owner's
own account without transfer. Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the Restricted Definitive Note
issued will continue to be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the Restricted Definitive Note and in
the Indenture and the Securities Act.
(b) / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange
of the Owner's Restricted Definitive Note for a beneficial interest in the
[CHECK ONE] / / 144A Global Note, / / Regulation S Global Note, / / IAI Global
Note with an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer and (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Notes
and pursuant to and in accordance with the Securities Act, and in compliance
with any applicable blue sky securities laws of any state of the United States.
Upon consummation of the proposed Exchange in accordance with the terms of the
Indenture, the beneficial interest issued will be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the relevant
Restricted Global Note
C-2
<PAGE>
and in the Indenture and the Securities Act.
C-3
<PAGE>
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company.
-----------------------------------
[Insert Name of Owner]
By:
---------------------------------
Name:
Title:
Dated: __________, ____
C-4
<PAGE>
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Dura Operating Corp.
4508 IDS Center
Minneapolis, MN 55402
Telecopier No.: (612) 332-2012
Attention: Scott D. Rued
U.S. Bank Trust National Association
180 E. 5th Street
St. Paul, MN 55101
Attention: Corporate Trust Administration
Re: 9% SENIOR SUBORDINATED NOTES DUE 2009
Reference is hereby made to the Indenture, dated as of April 22,
1999 (the "INDENTURE"), among Dura Operating Corp., as issuer (the "COMPANY"),
the guarantors party thereto and U.S. Bank Trust National Association, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
In connection with our proposed purchase of $____________
aggregate principal amount of:
(a) / / a beneficial interest in a Global Note, or
(b) / / a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or
any interest therein is subject to certain restrictions and conditions set forth
in the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "SECURITIES ACT").
2. We understand that the offer and sale of the Notes have not
been registered under the Securities Act, and that the Notes and any interest
therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we should sell the Notes or any
interest therein, we will do so only (A) to the Company or any subsidiary
thereof, (B) in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (C) to an institutional
"accredited investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to you and to the
Company a signed letter substantially in the form of this letter and, if
D-1
<PAGE>
such transfer is in respect of a principal amount of Notes, at the time of
transfer of less than $250,000, an Opinion of Counsel in form reasonably
acceptable to the Company to the effect that such transfer is in compliance with
the Securities Act, (D) outside the United States in accordance with Rule 904 of
Regulation S under the Securities Act, (E) pursuant to the provisions of Rule
144(k) under the Securities Act or (F) pursuant to an effective registration
statement under the Securities Act, and we further agree to provide to any
person purchasing the Definitive Note or beneficial interest in a Global Note
from us in a transaction meeting the requirements of clauses (A) through (E) of
this paragraph a notice advising such purchaser that resales thereof are
restricted as stated herein.
3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Notes, and
we and any accounts for which we are acting are each able to bear the economic
risk of our or its investment.
5. We are acquiring the Notes or beneficial interest therein
purchased by us for our own account or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
------------------------------------
[Insert Name of Accredited Investor]
By:
---------------------------
Name:
Title:
Dated: __________________, ____
D-2
<PAGE>
EXHIBIT E
FORM OF NOTATION OF GUARANTY
For value received, each Guarantor (which term includes any
successor Person under the Indenture) has, jointly and severally,
unconditionally guaranteed, to the extent set forth in the Indenture and subject
to the provisions in the Indenture, dated as of April 22, 1999 (the
"INDENTURE"), among Dura Operating Corp., the Guarantors party thereto and U.S.
Bank Trust National Association, as trustee (the "TRUSTEE"), (a) the due and
punctual payment of the principal of, premium, if any, and interest on the Notes
(as defined in the Indenture), whether at maturity, by acceleration, redemption
or otherwise, the due and punctual payment of interest on overdue principal and
premium, and, to the extent permitted by law, interest, and the due and punctual
performance of all other obligations of the Company to the Holders or the
Trustee all in accordance with the terms of the Indenture and (b) in case of any
extension of time of payment or renewal of any Notes or any of such other
obligations, that the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. The obligations of the Guarantors to the
Holders of Notes and to the Trustee pursuant to the Guaranty and the Indenture
are expressly set forth in Article 11 of the Indenture and reference is hereby
made to the Indenture for the precise terms of the Guaranty. The obligations of
the Guarantors will be released only in accordance with the provisions of
Article 11 of the Indenture. Each Holder of a Note, by accepting the same, (a)
agrees to and shall be bound by such provisions, (b) authorizes and directs the
Trustee, on behalf of such Holder, to take such action as may be necessary or
appropriate to effectuate the subordination as provided in the Indenture and (c)
appoints the Trustee attorney-in-fact of such Holder for such purpose; PROVIDED,
HOWEVER, that the Indebtedness evidenced by this Guaranty shall cease to be so
subordinated and subject in right of payment upon any defeasance of this Note in
accordance with the provisions of the Indenture.
[Name of Guarantors]
--------------------------------------------------
By:
Name:
Title:
E-1
<PAGE>
EXHIBIT F
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS
SUPPLEMENTAL INDENTURE (this "SUPPLEMENTAL INDENTURE"), dated as
of ________________, among __________________ (the "GUARANTEEING SUBSIDIARY"), a
subsidiary of Dura Operating Corp. (or its permitted successor), a Delaware
corporation (the "COMPANY"), the Company, the other Guarantors (as defined in
the Indenture referred to herein) and U.S. Bank National Association, as trustee
under the indenture referred to below (the "TRUSTEE").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "INDENTURE"), dated as of April 22, 1999, providing
for the issuance of an aggregate principal amount of up to EURO 100 million of
9% Senior Subordinated Notes due 2009 (the "NOTES");
WHEREAS, the Indenture provides that under certain circumstances
the Guaranteeing Subsidiary shall execute and deliver to the Trustee a
supplemental indenture pursuant to which the Guaranteeing Subsidiary shall
unconditionally guarantee all of the Company's Obligations under the Notes and
the Indenture on the terms and conditions set forth herein (the "SUBSIDIARY
GUARANTEE"); and
WHEREAS, pursuant to Section 9.06 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby
agrees as follows:
(a) Along with all Guarantors named in the Indenture, to
jointly and severally Guarantee to each Holder of a Note
authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, the Notes or the
obligations of the Company hereunder or thereunder, that:
(i) the principal of and interest on the Notes will be
promptly paid in full when due, whether at maturity,
by acceleration, redemption or otherwise, and
interest on the overdue principal of and interest on
the Notes, if any, if lawful, and all other
obligations of the Company to the Holders or the
Trustee hereunder or thereunder will be promptly
paid in full or performed, all in accordance with
the terms hereof and thereof; and
F-1
<PAGE>
(ii) in case of any extension of time of payment or
renewal of any Notes or any of such other
obligations, that same will be promptly paid in full
when due or performed in accordance with the terms
of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. Failing
payment when due of any amount so guaranteed or any
performance so guaranteed for whatever reason, the
Guarantors shall be jointly and severally obligated
to pay the same immediately.
(b) The obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability
of the Notes or the Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of
the Notes with respect to any provisions hereof or thereof,
the recovery of any judgment against the Company, any
action to enforce the same or any other circumstance which
might otherwise constitute a legal or equitable discharge
or defense of a guarantor.
(c) The following is hereby waived: diligence presentment,
demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right
to require a proceeding first against the Company, protest,
notice and all demands whatsoever.
(d) This Subsidiary Guarantee shall not be discharged except by
complete performance of the obligations contained in the
Notes and the Indenture.
(e) If any Holder or the Trustee is required by any court or
otherwise to return to the Company, the Guarantors, or any
Custodian, trustee, liquidator or other similar official
acting in relation to either the Company or the Guarantors,
any amount paid by either to the Trustee or such Holder,
this Subsidiary Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect.
(f) The Guaranteeing Subsidiary shall not be entitled to any
right of subrogation in relation to the Holders in respect
of any obligations guaranteed hereby until payment in full
of all obligations guaranteed hereby.
(g) As between the Guarantors, on the one hand, and the Holders
and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as
provided in Article 6 of the Indenture for the purposes of
this Subsidiary Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed
hereby, and (y) in the event of any declaration of
acceleration of such obligations as provided in Article 6
of the Indenture, such obligations (whether or not due and
payable) shall forthwith become due and payable by the
Guarantors for the purpose of this Subsidiary Guarantee.
(h) The Guarantors shall have the right to seek contribution
from any non-paying Guarantor so long as the exercise of
such right does not impair the rights of the Holders under
the Guarantee.
F-2
<PAGE>
(i) Pursuant to Section 11.03 of the Indenture, after giving
effect to any maximum amount and any other contingent and
fixed liabilities that are relevant under any applicable
Bankruptcy or fraudulent conveyance laws, and after giving
effect to any collections from, rights to receive
contribution from or payments made by or on behalf of any
other Guarantor in respect of the obligations of such other
Guarantor under Article 11 of the Indenture shall result in
the obligations of such Guarantor under its Subsidiary
Guarantee not constituting a fraudulent transfer or
conveyance.
3 EXECUTION AND DELIVERY. Each Guaranteeing Subsidiary agrees
that the Subsidiary Guarantees shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such
Subsidiary Guarantee.
4. GUARANTEEING SUBSIDIARY MAY CONSOLIDATE, ETC. ON CERTAIN
TERMS.
(a) A Guaranteeing Subsidiary may not sell or otherwise dispose of all
or substantially all of its assets to, or consolidate with or
merge with or into (whether or not such Guaranteeing Subsidiary is
the surviving Person) another Person unless:
(i) immediately after giving effect to such transaction, no
Default or Event of Default exists; and
(ii) either:
(A) the Person acquiring the property in any such sale
or disposition or the Person formed by or surviving
any such consolidation or merger assumes all the
obligations of such Guaranteeing Subsidiary under
the Indenture, the Guaranty and the Registration
Rights Agreement, pursuant to a supplemental
indenture satisfactory to the Trustee and
appropriate collateral documents satisfactory to the
Trustee; or
(B) the Net Proceeds of such sale or other disposition
are applied in accordance with the applicable
provisions of the Indenture.
(b) In case of any such consolidation, merger, sale or conveyance and
upon the assumption by the successor Person, by supplemental
indenture, executed and delivered to the Trustee and satisfactory
in form to the Trustee, of the Subsidiary Guarantee endorsed upon
the Notes and the due and punctual performance of all of the
covenants and conditions of the Indenture to be performed by the
Guarantor, such successor corporation shall succeed to and be
substituted for the Guarantor with the same effect as if it had
been named herein as a Guarantor. Such successor corporation
thereupon may cause to be signed any or all of the Subsidiary
Guarantees to be endorsed upon all of the Notes issuable hereunder
which theretofore shall not have been signed by the Company and
delivered to the Trustee. All the Subsidiary Guarantees so issued
shall in all respects have the same legal rank and benefit under
the Indenture as the Subsidiary Guarantees theretofore and
thereafter issued in accordance with the terms of the Indenture as
though all of such Subsidiary Guarantees had been issued at the
date of the execution hereof.
F-3
<PAGE>
(c) Except as set forth in Articles 4 and 5 of the Indenture, and
notwithstanding clauses (a) and (b) above, nothing contained in
the Indenture or in any of the Notes shall prevent any
consolidation or merger of a Guarantor with or into the Company or
another Guarantor, or shall prevent any sale or conveyance of the
property of a Guarantor as an entirety or substantially as an
entirety to the Company or another Guarantor.
5. RELEASES.
(a) The Subsidiary Guarantee of a Guarantor will be released (i) in
connection with any sale or other disposition of all or
substantially all of the assets of that Guarantor (including by
way of merger or consolidation) to a person that is not (either
before or after giving effect to such transaction) a Restricted
Subsidiary of the Company, if the Guarantor applies the Net
Proceeds of that sale or other disposition in accordance with the
applicable provisions of the Indenture, including without
limitation Section 4.10 thereof; (ii) in connection with any sale
of all of the capital stock of a Guarantor to a person that is not
(either before or after giving effect to such transaction) a
Restricted Subsidiary of the Company, if the Company applies the
Net Proceeds of that sale in accordance with the applicable
provisions of the Indenture, including without limitation Section
4.10 thereof; or (iii) if the Company properly designates any
Restricted Subsidiary that is a Guarantor as an Unrestricted
Subsidiary. Upon delivery by the Company to the Trustee of an
Officers' Certificate and an Opinion of Counsel to the effect that
such sale or other disposition was made by the Company in
accordance with the provisions of the Indenture, including without
limitation Section 4.10 of the Indenture, the Trustee shall
execute any documents reasonably required in order to evidence the
release of any Guarantor from its obligations under its Subsidiary
Guarantee.
(b) Any Guarantor not released from its obligations under its
Subsidiary Guarantee shall remain liable for the full amount of
principal of and interest on the Notes and for the other
obligations of any Guarantor under the Indenture as provided in
Article 11 of the Indenture.
6. NO RECOURSE AGAINST OTHERS. No past, present or future
director, officer, employee, incorporator, stockholder or agent of the
Guaranteeing Subsidiary, as such, shall have any liability for any obligations
of the Company or any Guaranteeing Subsidiary under the Notes, any Subsidiary
Guarantees, the Indenture or this Supplemental Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each
Holder of the Notes by accepting a Note waives and releases all such liability.
The waiver and release are part of the consideration for issuance of the Notes.
Such waiver may not be effective to waive liabilities under the federal
securities laws and it is the view of the Commission that such a waiver is
against public policy.
7. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF
NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT
WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT
THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.
F-4
<PAGE>
8. COUNTERPARTS. The parties may sign any number of copies of
this Supplemental Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
9. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.
10 THE TRUSTEE. The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Guaranteeing Subsidiary and the
Company.
F-5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed and attested, all as of the date
first above written.
Dated: _______________, ____
[GUARANTEEING SUBSIDIARY]
By:
----------------------
Name:
Title:
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee
By:
----------------------
Name:
Title:
F-6
<PAGE>
- --------------------------------------------------------------------------------
SERIES A AND SERIES B
$300,000,000
9% SENIOR SUBORDINATED NOTES DUE 2009
REGISTRATION RIGHTS AGREEMENT
DATED AS OF APRIL 22, 1999
BY AND AMONG
DURA OPERATING CORP.
DURA AUTOMOTIVE SYSTEMS, INC.
DURA AUTOMOTIVE SYSTEMS, INC. COLUMN SHIFTER OPERATIONS
DURA AUTOMOTIVE SYSTEMS CABLE OPERATIONS, INC.
UNIVERSAL TOOL & STAMPING COMPANY INC.
ADWEST ELECTRONICS, INC.
ADWEST WESTERN AUTOMOTIVE, INC.
X.E. CO.
EXCEL OF TENNESSEE L.P.
EXCEL CORPORATION
EXCEL INDUSTRIES OF MICHIGAN, INC.
ANDERSON INDUSTRIES, INC.
ATWOOD INDUSTRIES, INC.
HYDRO FLAME CORPORATION
ATWOOD AUTOMOTIVE INC.
MARK I MOLDED PLASTICS, INC.
MARK I MOLDED PLASTICS OF TENNESSEE, INC.
AND
NATIONSBANC MONTGOMERY SECURITIES LLC
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
<PAGE>
This Registration Rights Agreement (this "AGREEMENT") is made and entered
into as of April 20, 1999, by and among Dura Operating Corp., a Delaware
corporation (the "COMPANY"), Dura Automotive Systems, Inc., Dura Automotive
Systems, Inc. Column Shifter Operations, Dura Automotive Systems Cable
Operations, Inc., Universal Tool & Stamping Company Inc., Adwest Electronics,
Inc., Adwest Western Automotive, Inc., X.E. Co., Excel of Tennessee L.P., Excel
Corporation, Excel Industries of Michigan, Inc., Anderson Industries, Inc.,
Atwood Industries, Inc., Hydro Flame Corporation, Atwood Automotive Inc., Mark I
Molded Plastics, Inc. and Mark I Molded Plastics of Tennessee, Inc. (each a
"GUARANTOR" and, collectively, the "GUARANTORS"), NationsBanc Montgomery
Securities LLC and Donaldson, Lufkin & Jenrette Securities Corporation (each an
"INITIAL PURCHASER" and, collectively, the "INITIAL PURCHASERS"), each of whom
has agreed to purchase the Company's 9% Series A Senior Subordinated Notes due
2009 (the "SERIES A NOTES") pursuant to the Purchase Agreement (as defined
below).
This Agreement is made pursuant to the Purchase Agreement, dated April
15, 1999 (the "PURCHASE AGREEMENT"), by and among the Company, the Guarantors
and the Initial Purchasers. In order to induce the Initial Purchasers to
purchase the Series A Notes, the Company has agreed to provide the registration
rights set forth in this Agreement. The execution and delivery of this
Agreement is a condition to the obligations of the Initial Purchasers set forth
in Section 5 of the Purchase Agreement. Capitalized terms used herein and not
otherwise defined shall have the meaning assigned to them in the Indenture,
dated April 22, 1999, between the Company and U.S. Bank Trust National
Association, as Trustee, relating to the Series A Notes and the Series B Notes
(the "INDENTURE").
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have the
following meanings:
ACT: The Securities Act of 1933, as amended.
AFFILIATE: As defined in Rule 144 of the Act.
BROKER-DEALER: Any broker or dealer registered under the Exchange Act.
BUSINESS DAY: Any day except a Saturday, Sunday or other day in the City
of New York on which banks are authorized or ordered to close.
CERTIFICATED SECURITIES: Definitive Notes, as defined in the Indenture.
CLOSING DATE: The date hereof.
COMMISSION: The Securities and Exchange Commission.
CONSUMMATE: An Exchange Offer shall be deemed "Consummated" for purposes
of this Agreement upon the occurrence of (a) the filing and effectiveness under
the Act of the Exchange Offer Registration Statement relating to the Series B
Notes to be issued in the Exchange Offer,
<PAGE>
(b) the maintenance of such Exchange Offer Registration Statement continuously
effective and the keeping of the Exchange Offer open for a period not less than
the period required pursuant to Section 3(b) hereof and (c) the delivery by the
Company to the Registrar under the Indenture of Series B Notes in the same
aggregate principal amount as the aggregate principal amount of Series A Notes
tendered by Holders thereof pursuant to the Exchange Offer.
CONSUMMATION DEADLINE: As defined in Section 3(b) hereof.
EFFECTIVENESS DEADLINE: As defined in Section 3(a) and 4(a) hereof.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
EXCHANGE OFFER: The exchange and issuance by the Company of a principal
amount of Series B Notes (which shall be registered pursuant to the Exchange
Offer Registration Statement) equal to the outstanding principal amount of
Series A Notes that are tendered by such Holders in connection with such
exchange and issuance.
EXCHANGE OFFER REGISTRATION STATEMENT: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
EXEMPT RESALES: The transactions in which the Initial Purchasers propose
to sell the Series A Notes to certain "qualified institutional buyers," as such
term is defined in Rule 144A under the Act and pursuant to Regulation S under
the Act.
FILING DEADLINE: As defined in Sections 3(a) and 4(a) hereof.
HOLDERS: As defined in Section 2 hereof.
PROSPECTUS: The prospectus included in a Registration Statement at the
time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.
RECOMMENCEMENT DATE: As defined in Section 6(d) hereof.
REGISTRATION DEFAULT: As defined in Section 5 hereof.
REGISTRATION STATEMENT: Any registration statement of the Company and
the Guarantors relating to (a) an offering of Series B Notes pursuant to an
Exchange Offer or (b) the registration for resale of Transfer Restricted
Securities pursuant to the Shelf Registration Statement, in each case (i) that
is filed pursuant to the provisions of this Agreement and (ii) including the
Prospectus included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.
REGULATION S: Regulation S promulgated under the Act.
RULE 144: Rule 144 promulgated under the Act.
2
<PAGE>
SERIES B NOTES: The Company's 9% Series B Senior Subordinated Notes due
2009 to be issued pursuant to the Indenture: (i) in the Exchange Offer or (ii)
as contemplated by Section 4 hereof.
SHELF REGISTRATION STATEMENT: As defined in Section 4 hereof.
SUSPENSION NOTICE: As defined in Section 6(d) hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb) as
in effect on the date of the Indenture.
TRANSFER RESTRICTED SECURITIES: Each (A) Series A Note, until the
earliest to occur of (i) the date on which such Series A Note is exchanged in
the Exchange Offer for a Series B Note which is entitled to be resold to the
public by the Holder thereof without complying with the prospectus delivery
requirements of the Act, (ii) the date on which such Series A Note has been
disposed of in accordance with a Shelf Registration Statement (and the
purchasers thereof have been issued without restriction Series B Notes), or
(iii) the date on which such Series A Note is eligible for distribution without
restriction to the public pursuant to Rule 144 under the Act and each (B) Series
B Note held by a Broker-Dealer until the date on which such Series B Note is
disposed of by a Broker-Dealer pursuant to the "Plan of Distribution"
contemplated by the Exchange Offer Registration Statement (including the
delivery of the Prospectus contained therein).
SECTION 2. HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities
(each, a "HOLDER") whenever such Person owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permitted by applicable
federal law (after the procedures set forth in Section 6(a)(i) below have been
complied with), the Company and the Guarantors shall (i) cause the Exchange
Offer Registration Statement to be filed with the Commission as soon as
practicable after the Closing Date, but in no event later than 60 days after the
Closing Date (such 60th day being the "FILING DEADLINE"), (ii) use their
respective reasonable best efforts to cause such Exchange Offer Registration
Statement to become effective at the earliest possible time, but in no event
later than 150 days after the Closing Date (such 150th day being the
"EFFECTIVENESS DEADLINE"), (iii) in connection with the foregoing, (A) file all
pre-effective amendments to such Exchange Offer Registration Statement as may be
necessary in order to cause it to become effective, (B) file, if applicable, a
post-effective amendment to such Exchange Offer Registration Statement pursuant
to Rule 430A under the Act and (C) cause all necessary filings, if any, in
connection with the registration and qualification of the Series B Notes to be
made under the Blue Sky laws of such jurisdictions as are necessary to permit
Consummation of the Exchange Offer and (iv) upon the effectiveness of such
Exchange Offer Registration Statement, commence and Consummate the Exchange
Offer. The Exchange Offer shall be on the appropriate form permitting (i)
registration of the Series B Notes to be offered in exchange for the Series A
Notes that are Transfer Restricted Securities and (ii) resales of Series B Notes
by Broker-Dealers that
3
<PAGE>
tendered into the Exchange Offer Series A Notes that such Broker-Dealer acquired
for its own account as a result of market making activities or other trading
activities (other than Series A Notes acquired directly from the Company or any
of its Affiliates) as contemplated by Section 3(c) below.
(b) The Company and the Guarantors shall use their respective
reasonable best efforts to cause the Exchange Offer Registration Statement to be
effective continuously, and shall keep the Exchange Offer open for a period of
not less than the minimum period required under applicable federal and state
securities laws to Consummate the Exchange Offer; PROVIDED, HOWEVER, that in no
event shall such period be less than 20 Business Days. The Company and the
Guarantors shall cause the Exchange Offer to comply with all applicable federal
and state securities laws. No securities other than the Series B Notes shall be
included in the Exchange Offer Registration Statement. The Company and the
Guarantors shall use their respective best efforts to cause the Exchange Offer
to be Consummated on the earliest practicable date after the Exchange Offer
Registration Statement has become effective, but in no event later than 30
Business Days thereafter (such 30th day being the "CONSUMMATION DEADLINE").
(c) The Company shall include a "Plan of Distribution" section in the
Prospectus contained in the Exchange Offer Registration Statement and indicate
therein that any Broker-Dealer who holds Transfer Restricted Securities that
were acquired for the account of such Broker-Dealer as a result of market-making
activities or other trading activities (other than Series A Notes acquired
directly from the Company or any Affiliate of the Company), may exchange such
Transfer Restricted Securities pursuant to the Exchange Offer. Such "Plan of
Distribution" section shall also contain all other information with respect to
such sales by such Broker-Dealers that the Commission may require in order to
permit such sales pursuant thereto, but such "Plan of Distribution" shall not
name any such Broker-Dealer or disclose the amount of Transfer Restricted
Securities held by any such Broker-Dealer, except to the extent required by the
Commission as a result of a change in policy, rules or regulations after the
date of this Agreement. See the Shearman & Sterling no-action letter (available
July 2, 1993).
Because such Broker-Dealer may be deemed to be an "underwriter" within
the meaning of the Act and must, therefore, deliver a prospectus meeting the
requirements of the Act in connection with its initial sale of any Series B
Notes received by such Broker-Dealer in the Exchange Offer, the Company and the
Guarantors shall permit the use of the Prospectus contained in the Exchange
Offer Registration Statement by such Broker-Dealer to satisfy such prospectus
delivery requirement. To the extent necessary to ensure that the prospectus
contained in the Exchange Offer Registration Statement is available for sales of
Series B Notes by Broker-Dealers, the Company and the Guarantors agree to use
their respective reasonable best efforts to keep the Exchange Offer Registration
Statement continuously effective, supplemented, amended and current as required
by and subject to the provisions of Section 6(a) and (c) hereof and in
conformity with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, for a
period of 180 days from the Consummation Deadline or such shorter period as will
terminate when all Transfer Restricted Securities covered by such Registration
Statement have been sold pursuant thereto. The Company and the Guarantors shall
provide sufficient copies of the latest version of such Prospectus to such
Broker-Dealers, promptly upon request, and in no event later than one Business
Day after such request, at any time during such period.
4
<PAGE>
SECTION 4. SHELF REGISTRATION
(a) SHELF REGISTRATION. If (i) the Exchange Offer is not permitted
by applicable law (after the Company and the Guarantors have complied with the
procedures set forth in Section 6(a)(i) below) or (ii) if any Holder of Transfer
Restricted Securities shall notify the Company in writing within 20 Business
Days following the Consummation Deadline that (A) such Holder was prohibited by
law or Commission policy from participating in the Exchange Offer or (B) such
Holder may not resell the Series B Notes acquired by it in the Exchange Offer to
the public without delivering a prospectus and the Prospectus contained in the
Exchange Offer Registration Statement is not appropriate or available for such
resales by such Holder or (C) such Holder is a Broker-Dealer and holds Series A
Notes acquired directly from the Company or any of its Affiliates, then the
Company and the Guarantors shall:
(x) use their respective reasonable best efforts to cause to be filed, on or
prior to 30 days after the earlier of (i) the date on which the Company
determines that the Exchange Offer Registration Statement cannot be filed as a
result of clause (a)(i) above and (ii) the date on which the Company receives
the notice specified in clause (a)(ii) above (such earlier date, the "FILING
DEADLINE"), a shelf registration statement pursuant to Rule 415 under the Act
(which may be an amendment to the Exchange Offer Registration Statement (the
"SHELF REGISTRATION STATEMENT")), relating to all Transfer Restricted Securities
(provided, however, nothing in this Section 4(a)(x) shall require the filing of
the Shelf Registration Statement prior to the Filing Deadline for the Exchange
Offer Registration Statement, and
(y) shall use their respective reasonable best efforts to cause such Shelf
Registration Statement to become effective on or prior to 90 days after the
Filing Deadline for the Shelf Registration Statement (such 90th day the
"EFFECTIVENESS DEADLINE").
If, after the Company has filed an Exchange Offer Registration Statement
that satisfies the requirements of Section 3(a) above, the Company is required
to file and make effective a Shelf Registration Statement solely because the
Exchange Offer is not permitted under applicable federal law (i.e., clause
(a)(i) above), then the filing of the Exchange Offer Registration Statement
shall be deemed to satisfy the requirements of clause (x) above; PROVIDED that,
in such event, the Company shall remain obligated to meet the Effectiveness
Deadline set forth in clause (y).
To the extent necessary to ensure that the Shelf Registration Statement
is available for sales of Transfer Restricted Securities by the Holders thereof
entitled to the benefit of this Section 4(a) and the other securities required
to be registered therein pursuant to Section 6(b)(ii) hereof, the Company and
the Guarantors shall use their respective best efforts to keep any Shelf
Registration Statement required by this Section 4(a) continuously effective,
supplemented, amended and current as required by and subject to the provisions
of Sections 6(b) and (c) hereof and in conformity with the requirements of this
Agreement, the Act and the policies, rules and regulations of the Commission as
announced from time to time, for a period of at least two years (as extended
pursuant to Section 6(c)(i)) following the Closing Date, or such shorter period
as will terminate when all Transfer Restricted Securities covered by such Shelf
Registration Statement have been sold pursuant thereto.
5
<PAGE>
(b) PROVISION BY HOLDERS OF CERTAIN INFORMATION IN CONNECTION WITH
THE SHELF REGISTRATION STATEMENT. No Holder of Transfer Restricted Securities
may include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 10 days after receipt of a request therefor, the
information specified in Item 507 or 508 of Regulation S-K, as applicable, of
the Act for use in connection with any Shelf Registration Statement or
Prospectus or preliminary Prospectus included therein. No Holder of Transfer
Restricted Securities shall be entitled to liquidated damages pursuant to
Section 5 hereof unless and until such Holder shall have provided all such
information. Each selling Holder agrees to promptly furnish additional
information required to be disclosed in order to make the information previously
furnished to the Company by such Holder not materially misleading. The Company
shall not be obligated to supplement such Shelf Registration Statement after it
has been declared effective by the Commission more than one time per quarterly
period to reflect additional Holders.
SECTION 5. LIQUIDATED DAMAGES
If (i) any Registration Statement required by this Agreement is not filed
with the Commission on or prior to the applicable Filing Deadline, (ii) any such
Registration Statement has not been declared effective by the Commission on or
prior to the applicable Effectiveness Deadline, (iii) the Exchange Offer has not
been Consummated on or prior to the Consummation Deadline or (iv) any
Registration Statement required by this Agreement is filed and declared
effective but shall thereafter cease to be effective or fail to be usable for
its intended purpose without being succeeded within 5 Business Days by a
post-effective amendment to such Registration Statement that cures such failure
and that is itself declared effective immediately (each such event referred to
in clauses (i) through (iv), a "REGISTRATION DEFAULT"), then the Company and the
Guarantors hereby jointly and severally agree to pay to each Holder of Transfer
Restricted Securities affected thereby (subject to Section 4(b)) liquidated
damages in an amount equal to .50% per annum over the stated rate for the
Transfer Restricted Securities held by such Holder for each week or portion
thereof that the Registration Default continues for the first 90-day period
immediately following the occurrence of such Registration Default. The amount of
the liquidated damages shall increase by an additional .50% per annum over the
stated rate for the Transfer Restricted Securities at the beginning of each
subsequent 90-day period until all Registration Defaults have been cured, up to
a maximum amount of liquidated damages of 1.0% per annum over the stated rate
for the Transfer Restricted Securities; PROVIDED that the Company and the
Guarantors shall in no event be required to pay liquidated damages for more than
one Registration Default at any given time. Notwithstanding anything to the
contrary set forth herein, (1) upon filing of the Exchange Offer Registration
Statement (and/or, if applicable, the Shelf Registration Statement), in the case
of (i) above, (2) upon the effectiveness of the Exchange Offer Registration
Statement (and/or, if applicable, the Shelf Registration Statement), in the case
of (ii) above, (3) upon Consummation of the Exchange Offer, in the case of (iii)
above, or (4) upon the filing of a post-effective amendment to the Registration
Statement or an additional Registration Statement that causes the Exchange Offer
Registration Statement (and/or, if applicable, the Shelf Registration Statement)
to again be declared effective or made usable in the case of (iv) above, the
liquidated damages payable with respect to the Transfer Restricted Securities as
a result of such clause (i), (ii), (iii) or (iv), as applicable, shall cease.
6
<PAGE>
All accrued liquidated damages shall be paid to the Holders entitled
thereto, in the manner provided for the payment of interest in the Indenture, on
each Interest Payment Date, as more fully set forth in the Indenture and the
Notes. Notwithstanding the fact that any securities for which liquidated
damages are due cease to be Transfer Restricted Securities, all obligations of
the Company and the Guarantors to pay liquidated damages with respect to
securities shall survive until such time as such obligations with respect to
such securities shall have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) EXCHANGE OFFER REGISTRATION STATEMENT. In connection with the
Exchange Offer, the Company and the Guarantors shall (x) comply with all
applicable provisions of Section 6(c) below, (y) use their respective reasonable
best efforts to effect such exchange and to permit the resale of Series B Notes
by Broker-Dealers that tendered in the Exchange Offer Series A Notes that such
Broker-Dealer acquired for its own account as a result of its market making
activities or other trading activities (other than Series A Notes acquired
directly from the Company or any of its Affiliates) being sold in accordance
with the intended method or methods of distribution thereof, and (z) comply with
all of the following provisions:
(i) If, following the date hereof there has been announced a change
in Commission policy with respect to exchange offers such as the Exchange
Offer, that in the reasonable opinion of counsel to the Company raises a
substantial question as to whether the Exchange Offer is permitted by
applicable federal law, the Company and the Guarantors hereby agree to seek
a no-action letter or other favorable decision from the Commission allowing
the Company and the Guarantors to Consummate an Exchange Offer for such
Transfer Restricted Securities. The Company and the Guarantors hereby
agree to pursue the issuance of such a decision to the Commission staff
level. In connection with the foregoing, the Company and the Guarantors
hereby agree to take all such other actions as may be requested by the
Commission or otherwise required in connection with the issuance of such
decision, including without limitation (A) participating in telephonic
conferences with the Commission, (B) delivering to the Commission staff an
analysis prepared by counsel to the Company setting forth the legal bases,
if any, upon which such counsel has concluded that such an Exchange Offer
should be permitted and (C) diligently pursuing a resolution (which need
not be favorable) by the Commission staff.
(ii) As a condition to its participation in the Exchange Offer, each
Holder of Transfer Restricted Securities (including, without limitation,
any Holder who is a Broker-Dealer) shall furnish, upon the request of the
Company, prior to the Consummation of the Exchange Offer, a written
representation to the Company and the Guarantors (which may be contained in
the letter of transmittal contemplated by the Exchange Offer Registration
Statement) to the effect that (A) it is not an Affiliate of the Company,
(B) it is not engaged in, and does not intend to engage in, and has no
arrangement or understanding with any person to participate in, a
distribution of the Series B Notes to be issued in the Exchange Offer and
(C) it is acquiring the Series B Notes in its ordinary course of business.
As a condition to its participation in the Exchange Offer each Holder using
the Exchange Offer to participate in a distribution of the Series B Notes
shall acknowledge and agree that, if the resales are of Series B Notes
obtained by such Holder in exchange for Series A Notes
7
<PAGE>
acquired directly from the Company or an Affiliate thereof, it (1) could
not, under Commission policy as in effect on the date of this Agreement,
rely on the position of the Commission enunciated in MORGAN STANLEY AND
CO., INC. (available June 5, 1991) and EXXON CAPITAL HOLDINGS CORPORATION
(available May 13, 1988), as interpreted in the Commission's letter to
SHEARMAN & STERLING dated July 2, 1993, and similar no-action letters
(including, if applicable, any no-action letter obtained pursuant to
clause (i) above), and (2) must comply with the registration and
prospectus delivery requirements of the Act in connection with a
secondary resale transaction and that such a secondary resale transaction
must be covered by an effective registration statement containing the
selling security holder information required by Item 507 or 508, as
applicable, of Regulation S-K.
(iii) Prior to effectiveness of the Exchange Offer Registration
Statement, the Company and the Guarantors shall provide a supplemental
letter to the Commission (A) stating that the Company and the Guarantors
are registering the Exchange Offer in reliance on the position of the
Commission enunciated in EXXON CAPITAL HOLDINGS CORPORATION (available May
13, 1988), MORGAN STANLEY AND CO., INC. (available June 5, 1991) as
interpreted in the Commission's letter to SHEARMAN & STERLING dated July 2,
1993, and, if applicable, any no-action letter obtained pursuant to clause
(i) above, (B) including a representation that neither the Company nor any
Guarantor has entered into any arrangement or understanding with any Person
to distribute the Series B Notes to be received in the Exchange Offer and
that, to the Company's and each Guarantor's information and belief, each
Holder participating in the Exchange Offer is acquiring the Series B Notes
in its ordinary course of business and has no arrangement or understanding
with any Person to participate in the distribution of the Series B Notes
received in the Exchange Offer and (C) any other undertaking or
representation required by the Commission as set forth in any no-action
letter obtained pursuant to clause (i) above, if applicable.
(b) SHELF REGISTRATION STATEMENT. In connection with the Shelf
Registration Statement, the Company and the Guarantors shall (i) comply with all
the provisions of Section 6(c) below and use their respective reasonable best
efforts to effect such registration to permit the sale of the Transfer
Restricted Securities being sold in accordance with the intended method or
methods of distribution thereof (as indicated in the information furnished to
the Company pursuant to Section 4(b) hereof), and pursuant thereto the Company
and the Guarantors will prepare and file with the Commission a Registration
Statement relating to the registration on any appropriate form under the Act,
which form shall be available for the sale of the Transfer Restricted Securities
in accordance with the intended method or methods of distribution thereof within
the time periods and otherwise in accordance with the provisions hereof, and
(ii) issue, upon the request of any Holder providing satisfactory
evidence to the Company of its sale of Series A Notes or purchaser of Series
A Notes covered by any Shelf Registration Statement contemplated by this
Agreement, Series B Notes having an aggregate principal amount equal to the
aggregate principal amount of Series A Notes sold pursuant to the Shelf
Registration Statement and surrendered to the Company for cancellation; the
Company shall register Series B Notes on the Shelf Registration Statement for
this purpose and issue the Series B
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Notes to the purchaser(s) of securities subject to the Shelf Registration
Statement in the names as such purchaser(s) shall designate.
(c) GENERAL PROVISIONS. In connection with any Registration
Statement and any related Prospectus required by this Agreement, the Company and
the Guarantors shall:
(i) use their respective reasonable best efforts to keep such
Registration Statement continuously effective and provide all requisite
financial statements for the period specified in Section 3 or 4 of this
Agreement, as applicable. Upon the occurrence of any event that would
cause any such Registration Statement or the Prospectus contained therein
(A) to contain an untrue statement of material fact or omit to state any
material fact necessary to make the statements therein not misleading or
(B) not to be effective and usable for resale of Transfer Restricted
Securities during the period required by this Agreement, the Company and
the Guarantors shall file promptly an appropriate amendment to such
Registration Statement curing such defect, and, if Commission review is
required, use their respective reasonable best efforts to cause such
amendment to be declared effective as soon as practicable.
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the applicable Registration Statement as may
be necessary to keep such Registration Statement effective for the
applicable period set forth in Section 3 or 4 hereof, as the case may be;
cause the Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 under
the Act, and to comply fully with Rules 424, 430A and 462, as applicable,
under the Act in a timely manner; and comply with the provisions of the Act
with respect to the disposition of all securities covered by such
Registration Statement during the applicable period in accordance with the
intended method or methods of distribution by the sellers thereof set forth
in such Registration Statement or supplement to the Prospectus;
(iii) with respect to a Shelf Registration Statement, advise the
selling Holders promptly and, if requested by such Persons, confirm such
advice in writing, (A) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to any
applicable Registration Statement or any post-effective amendment thereto,
when the same has become effective, (B) of any request by the Commission
for amendments to the Registration Statement or amendments or supplements
to the Prospectus or for additional information relating thereto, (C) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement under the Act or of the
suspension by any state securities commission of the qualification of the
Transfer Restricted Securities for offering or sale in any jurisdiction, or
the initiation of any proceeding for any of the preceding purposes, (D) of
the existence of any fact or the happening of any event that makes any
statement of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement thereto or any document
incorporated by reference therein untrue, or that requires the making of
any additions to or changes in the Registration Statement in order to make
the statements therein not misleading, or that requires the making of any
additions to or changes in the Prospectus in order to make the statements
therein, in the light of the circumstances under which they
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were made, not misleading. If at any time the Commission shall issue any
stop order suspending the effectiveness of the Registration Statement, or
any state securities commission or other regulatory authority shall issue
an order suspending the qualification or exemption from qualification of
the Transfer Restricted Securities under state securities or Blue Sky laws,
the Company and the Guarantors shall use their respective reasonable
efforts to obtain the withdrawal or lifting of such order at the earliest
possible time;
(iv) subject to Section 6(c)(i), if any fact or event contemplated by
Section 6(c)(iii)(D) above shall exist or have occurred, prepare a
supplement or post-effective amendment to the Registration Statement or
related Prospectus or any document incorporated therein by reference or
file any other required document so that, as thereafter delivered to the
purchasers of Transfer Restricted Securities, the Prospectus will not
contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(v) furnish to the Initial Purchasers and with respect to a Shelf
Registration Statement, each selling Holder named in any Registration
Statement or Prospectus in connection with such sale, if any, before filing
with the Commission, copies of any Registration Statement or any Prospectus
included therein or any amendments or supplements to any such Registration
Statement or Prospectus (including all documents incorporated by reference
after the initial filing of such Registration Statement), which documents
will be subject to the review and comment of such Holders in connection
with such sale, if any, for a period of at least five Business Days, and
the Company will not file any such Registration Statement or Prospectus or
any amendment or supplement to any such Registration Statement or
Prospectus (including all such documents incorporated by reference) to
which the selling Holders of the Transfer Restricted Securities covered by
such Registration Statement in connection with such sale, if any, shall
reasonably object within five Business Days after the receipt thereof. A
selling Holder shall be deemed to have reasonably objected to such filing
if such Registration Statement, amendment, Prospectus or supplement, as
applicable, as proposed to be filed, contains a material misstatement or
omission or fails to comply with the applicable requirements of the Act;
(vi) with respect to a Shelf Registration Statement, provide copies
of any document that is incorporated by reference into a Registration
Statement or Prospectus to the selling Holders in connection with such
sale, if any;
(vii) with respect to a Shelf Registration Statement, make
available at reasonable times for inspection by the selling Holders
participating in any disposition pursuant to such Registration Statement
and any attorney or accountant retained by such selling Holders, all
financial and other records, pertinent corporate documents of the Company
and cause the Company's officers, directors and employees to supply all
information reasonably requested under the circumstances by any such
selling Holder, attorney or accountant in connection with such Registration
Statement or any post-effective amendment thereto subsequent to the filing
thereof and prior to its effectiveness;
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(viii) with respect to a Shelf Registration Statement, if requested
by any selling Holders in connection with such sale, if any, promptly
include in any Registration Statement or Prospectus, pursuant to a
supplement or post-effective amendment if necessary, such information as
such selling Holders may reasonably request to have included therein,
including, without limitation, information relating to the "Plan of
Distribution" of the Transfer Restricted Securities; and make all required
filings of such Prospectus supplement or post-effective amendment as soon
as practicable after the Company is notified of the matters to be included
in such Prospectus supplement or post-effective amendment;
(ix) with respect to a Shelf Registration Statement, furnish to each
selling Holder in connection with such sale, if any, without charge, at
least one copy of the Registration Statement, as first filed with the
Commission, and of each amendment thereto, including all documents
incorporated by reference therein and all exhibits (including exhibits
incorporated therein by reference);
(x) with respect to a Shelf Registration Statement, deliver to each
selling Holder without charge, as many copies of the Prospectus (including
each preliminary prospectus) and any amendment or supplement thereto s such
Persons reasonably may request; the Company and the Guarantors hereby
consent tot he use (in accordance with law) of the Prospectus and any
amendment or supplement thereto by each selling Holder in connection with
the offering and the sale of the Transfer Restricted Securities covered by
the Prospectus or any amendment or supplement thereto;
(xi) upon the request of any Holders who collectively hold an
aggregate principal amount of Series A Notes in excess of 10% of the
aggregate principal amount of the outstanding Transfer Restricted
Securities (the "Requesting Holders"), enter into an underwriting agreement
on one occasion and make such representations and warranties and take all
such other actions as are reasonably customary in underwritten offerings in
order to expedite or facilitate the disposition of the Transfer Restricted
Securities pursuant to any applicable Registration Statement contemplated
by this Agreement as may be reasonably requested by the Requesting Holders
in connection with any sale or resale pursuant to any applicable
Registration Statement. In such connection, the Company and the Guarantors
shall:
(A) upon request of the Requesting Holders, furnish (or in the case of
paragraphs (2) and (3), use their reasonable best efforts to cause to be
furnished) to each Requesting Holder, upon Consummation of the Exchange
Offer or upon the effectiveness of the Shelf Registration Statement, as
the case may be:
(1) a certificate, dated such date, signed on behalf of the
Company and each Guarantor by (x) the President or any Vice
President and (y) a principal financial or accounting officer of
the Company and such Guarantor, confirming, as of the date
thereof, the matters set forth in Sections 1(k), 5(b) and 5(e) of
the Purchase Agreement and such other similar matters as such
Holders may reasonably request;
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(2) an opinion, dated the date of Consummation of the
Exchange Offer or the date of effectiveness of the Shelf
Registration Statement, as the case may be, of counsel for the
Company and the Guarantors covering matters similar to those set
forth in paragraph (c) of Section 5 of the Purchase Agreement and
such other matter as such Holder may reasonably request, and in
any event including a statement to the effect that such counsel
has participated in conferences with officers and other
representatives of the Company and the Guarantors, representatives
of the independent public accountants for the Company and the
Guarantors and have considered the matters required to be stated
therein and the statements contained therein, although such
counsel has not independently verified the accuracy, completeness
or fairness of such statements; and that such counsel advises
that, on the basis of the foregoing (relying as to materiality to
the extent such counsel deems appropriate upon the statements of
officers and other representatives of the Company and the
Guarantors and without independent check or verification), no
facts came to such counsel's attention that caused such counsel to
believe that the applicable Registration Statement, at the time
such Registration Statement or any post-effective amendment
thereto became effective and, in the case of the Exchange Offer
Registration Statement, as of the date of Consummation of the
Exchange Offer, contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, or
that the Prospectus contained in such Registration Statement as of
its date and, in the case of the opinion dated the date of
Consummation of the Exchange Offer, as of the date of
Consummation, contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading. Without limiting the foregoing,
such counsel may state further that such counsel assumes no
responsibility for, and has not independently verified, the
accuracy, completeness or fairness of the financial statements,
notes and schedules and other financial data included in any
Registration Statement contemplated by this Agreement or the
related Prospectus; and
(3) a customary comfort letter, dated the date of
Consummation of the Exchange Offer, or as of the date of
effectiveness of the Shelf Registration Statement, as the case may
be, from the Company's independent accountants, in the customary
form and covering matters of the type customarily covered in
comfort letters to underwriters in connection with underwritten
offerings, and affirming the matters set forth in the comfort
letters delivered pursuant to Section 5(a) of the Purchase
Agreement; and
(B) deliver such other documents and certificates as may be
reasonably requested by the selling Holders to evidence compliance with
the matters covered in clause (A) above and with any customary conditions
contained in any agreement entered into by the Company and the Guarantors
pursuant to this clause (xi);
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(v) prior to any public offering of Transfer Restricted Securities,
cooperate with the selling Holders and their counsel in connection with the
registration and qualification of the Transfer Restricted Securities under
the securities or Blue Sky laws of such jurisdictions as the selling
Holders may request and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Transfer
Restricted Securities covered by the applicable Registration Statement;
PROVIDED, HOWEVER, that neither the Company nor any Guarantor shall be
required to register or qualify as a foreign corporation where it is not
now so qualified or to take any action that would subject it to the service
of process in suits or to taxation, other than as to matters and
transactions relating to the Registration Statement, in any jurisdiction
where it is not now so subject;
(vi) in connection with any sale of Transfer Restricted Securities
that will result in such securities no longer being Transfer Restricted
Securities, cooperate with the Holders to facilitate the timely preparation
and delivery of certificates representing Transfer Restricted Securities to
be sold and not bearing any restrictive legends; and to register such
Transfer Restricted Securities in such denominations and such names as the
selling Holders may request at least two Business Days prior to such sale
of Transfer Restricted Securities;
(vii) use their respective best efforts to cause the disposition
of the Transfer Restricted Securities covered by the Registration Statement
to be registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof to
consummate the disposition of such Transfer Restricted Securities, subject
to the proviso contained in clause (v) above;
(viii) provide CUSIP and ISIN numbers, as applicable, for all
Transfer Restricted Securities not later than the effective date of a
Registration Statement covering such Transfer Restricted Securities and
provide the Trustee under the Indenture with printed certificates for the
Transfer Restricted Securities which are in a form eligible for deposit
with the Depository Trust Company;
(ix) otherwise use their respective best efforts to comply with all
applicable rules and regulations of the Commission, and make generally
available to its security holders with regard to any applicable
Registration Statement, as soon as practicable, a consolidated earnings
statement meeting the requirements of Rule 158 (which need not be audited)
covering a twelve-month period beginning after the effective date of the
Registration Statement (as such term is defined in paragraph (c) of Rule
158 under the Act);
(x) cause the Indenture to be qualified under the TIA not later than
the effective date of the first Registration Statement required by this
Agreement and, in connection therewith, cooperate with the Trustee and the
Holders to effect such changes to the Indenture as may be required for such
Indenture to be so qualified in accordance with the terms of the TIA; and
execute and use its best efforts to cause the Trustee to execute, all
documents that may be required to effect such changes and all other forms
and documents required to be filed with the Commission to enable such
Indenture to be so qualified in a timely manner; and
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(xi) provide promptly to each Holder, upon request, each document
filed with the Commission pursuant to the requirements of Section 13 or
Section 15(d) of the Exchange Act.
(d) RESTRICTIONS ON HOLDERS. Each Holder agrees by acquisition of a
Transfer Restricted Security that, upon receipt of the notice referred to in
Section 6(c)(iii)(C) or any notice from the Company of the existence of any fact
of the kind described in Section 6(c)(iii)(D) hereof (in each case, a
"SUSPENSION NOTICE"), such Holder will forthwith discontinue disposition of
Transfer Restricted Securities pursuant to the applicable Registration Statement
until (i) such Holder has received copies of the supplemented or amended
Prospectus contemplated by Section 6(c)(iv) hereof, or (ii) such Holder is
advised in writing by the Company that the use of the Prospectus may be resumed,
and has received copies of any additional or supplemental filings that are
incorporated by reference in the Prospectus (in each case, the "RECOMMENCEMENT
DATE"). Each Holder receiving a Suspension Notice hereby agrees that it will
either (i) destroy any Prospectuses, other than permanent file copies, then in
such Holder's possession which have been replaced by the Company with more
recently dated Prospectuses or (ii) deliver to the Company (at the Company's
expense) all copies, other than permanent file copies, then in such Holder's
possession of the Prospectus covering such Transfer Restricted Securities that
was current at the time of receipt of the Suspension Notice. The time period
regarding the effectiveness of such Registration Statement set forth in Section
3 or 4 hereof, as applicable, shall be extended by a number of days equal to the
number of days in the period from and including the date of delivery of the
Suspension Notice to the date of delivery of the Recommencement Date.
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Company's and the Guarantors'
performance of or compliance with this Agreement will be borne by the Company,
regardless of whether a Registration Statement becomes effective, including
without limitation: (i) all registration and filing fees and expenses; (ii) all
fees and expenses of compliance with federal securities and state Blue Sky or
securities laws; (iii) all expenses of printing (including printing certificates
for the Series B Notes to be issued in the Exchange Offer and printing of
Prospectuses), messenger and delivery services and telephone; (iv) (A) all fees
and disbursements of counsel for the Company and the Guarantors and (B) one
counsel for the Holders of Transfer Restricted Securities in connection with an
underwritten offering; (v) all application and filing fees in connection with
listing the Series B Notes on a national securities exchange or automated
quotation system pursuant to the requirements hereof; and (vi) all fees and
disbursements of independent certified public accountants of the Company and the
Guarantors (including the expenses of any special audit and comfort letters
required by or incident to such performance).
The Company will, in any event, bear its and the Guarantors' internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expenses of
any annual audit and the fees and expenses of any Person, including special
experts, retained by the Company or the Guarantors.
(b) In connection with any Shelf Registration Statement required by
this Agreement, the Company and the Guarantors will reimburse the Initial
Purchasers and the Holders of Transfer Restricted Securities who are tendering
Series A Notes in the Exchange Offer and/or selling or
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reselling Series A Notes or Series B Notes pursuant to the "Plan of
Distribution" contained in the Exchange Offer Registration Statement or the
Shelf Registration Statement, as applicable, for the reasonable fees and
disbursements of not more than one counsel, who shall be either Latham & Watkins
or Gardner, Carton & Douglas, who shall be chosen by the Initial Purchasers or,
if the Initial Purchasers are not Holders of Transfer Restricted Securities such
other firm as shall be chosen by the Requesting Holders for whose benefit such
Shelf Registration Statement is being prepared.
SECTION 8. INDEMNIFICATION
(a) The Company and the Guarantors agree, jointly and severally, to
indemnify and hold harmless each Holder, its directors, officers and each
Person, if any, who controls such Holder (within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act), from and against any and all losses,
claims, damages, liabilities, judgments (including without limitation, any legal
or other expenses incurred in connection with investigating or defending any
matter, including any action that could give rise to any such losses, claims,
damages, liabilities or judgments) caused by any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement,
preliminary prospectus or Prospectus (or any amendment or supplement thereto)
provided by the Company to any Holder for use in connection with the resale of
Series B Notes or registered Series A Notes, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages, liabilities or judgments are caused by an untrue
statement or omission or alleged untrue statement or omission that is based upon
information relating to any of the Holders furnished in writing to the Company
by any of the Holders.
(b) Each Holder of Transfer Restricted Securities agrees, severally
and not jointly, to indemnify and hold harmless the Company and the Guarantors,
and their respective directors and officers, and each person, if any, who
controls (within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act) the Company, or the Guarantors to the same extent as the foregoing
indemnity from the Company and the Guarantors set forth in Section (a) above,
but only with reference to information relating to such Holder furnished in
writing to the Company by such Holder expressly for use in any Registration
Statement. In no event shall any Holder, its directors, officers or any Person
who controls such Holder be liable or responsible for any amount in excess of
the amount by which the total amount received by such Holder with respect to its
sale of Transfer Restricted Securities pursuant to a Registration Statement
exceeds (i) the amount paid by such Holder for such Transfer Restricted
Securities and (ii) the amount of any damages that such Holder, its directors,
officers or any Person who controls such Holder has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"INDEMNIFIED PARTY"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "INDEMNIFYING PERSON") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all reasonable fees and expenses of such counsel, as incurred
(except that in the case of any action in respect of which indemnity may be
sought pursuant to both Sections 8(a) and
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8(b), a Holder shall not be required to assume the defense of such action
pursuant to this Section 8(c), but may employ separate counsel and participate
in the defense thereof, but the fees and expenses of such counsel, except as
provided below, shall be at the expense of the Holder). Any indemnified party
shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of the indemnified party unless (i) the employment of
such counsel shall have been specifically authorized in writing by the
indemnifying party, (ii) the indemnifying party shall have failed to assume the
defense of such action or employ counsel reasonably satisfactory to the
indemnified party or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of the indemnified party). In any such case, the indemnifying party
shall not, in connection with any one action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
all indemnified parties and all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by a majority of the
Holders, in the case of the parties indemnified pursuant to Section 8(a), and by
the Company and Guarantors, in the case of parties indemnified pursuant to
Section 8(b). The indemnifying party shall indemnify and hold harmless the
indemnified party from and against any and all losses, claims, damages,
liabilities and judgments by reason of any settlement of any action (i) effected
with its written consent or (ii) effected without its written consent if the
settlement is entered into more than 20 Business Days after the indemnifying
party shall have received a request from the indemnified party for reimbursement
for the fees and expenses of counsel (in any case where such fees and expenses
are at the expense of the indemnifying party) and, prior to the date of such
settlement, the indemnifying party shall have failed to comply with such
reimbursement request or given its good faith objection to such indemnification
request. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement or compomise of, or consent to the
entry of judgment with respect to, any pending or threatened action in respect
of which the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on claims that
are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(d) To the extent that the indemnification provided for in this
Section 8 is unavailable to an indemnified party in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or judgments (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company and
the Guarantors, on the one hand, and the Holders, on the other hand, from their
sale of Transfer Restricted Securities or (ii) if the allocation provided by
clause 8(d)(i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
8(d)(i) above but also the relative fault of the
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Company and the Guarantors, on the one hand, and of the Holders, on the other
hand, in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative fault of the Company and the Guarantors,
on the one hand, and of the Holders, on the other hand, shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or such Guarantor, on the one
hand, or by the Holders, on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and judgments referred to above shall be
deemed to include, subject to the limitations set forth in Section 8(a), any
legal or other fees or expenses reasonably incurred by such party in connection
with investigating or defending any action or claim.
The Company, the Guarantors and each Holder agree that it would not be
just and equitable if contribution pursuant to this Section 8(d) were determined
by pro rata allocation (even if the Holders were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any matter, including any
action that could have given rise to such losses, claims, damages, liabilities
or judgments. Notwithstanding the provisions of this Section 8, no Holder, its
directors, its officers or any Person, if any, who controls such Holder shall be
required to contribute, in the aggregate, any amount in excess of the amount by
which the total received by such Holder with respect to the sale of Transfer
Restricted Securities pursuant to a Registration Statement exceeds (i) the
amount paid by such Holder for such Transfer Restricted Securities and (ii) the
amount of any damages which such Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Holders'
obligations to contribute pursuant to this Section 8(d) are several in
proportion to the respective principal amount of Transfer Restricted Securities
held by each Holder hereunder and not joint.
SECTION 9. RULE 144A AND RULE 144
The Company and each Guarantor agrees with each Holder, for so long as
any Transfer Restricted Securities remain outstanding and during any period in
which the Company or such Guarantor (i) is not subject to Section 13 or 15(d) of
the Exchange Act, to make available, upon request of any Holder, to such Holder
or beneficial owner of Transfer Restricted Securities in connection with any
sale thereof and any prospective purchaser of such Transfer Restricted
Securities designated by such Holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Act in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144A, and (ii) is subject to
Section 13 or 15 (d) of the Exchange Act, to make all filings required thereby
in a timely manner in order to permit resales of such Transfer Restricted
Securities pursuant to Rule 144.
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SECTION 10. MISCELLANEOUS
(a) REMEDIES. The Company and the Guarantors acknowledge and agree
that any failure by the Company and/or the Guarantors to comply with their
respective obligations under Sections 3 and 4 hereof may result in material
irreparable injury to the Initial Purchasers or the Holders for which there is
no adequate remedy at law, that it will not be possible to measure damages for
such injuries precisely and that, in the event of any such failure, the Initial
Purchasers or any Holder may obtain such relief as may be required to
specifically enforce the Company's and the Guarantors' obligations under
Sections 3 and 4 hereof. The Company and the Guarantors further agree to waive
the defense in any action for specific performance that a remedy at law would be
adequate.
(b) NO INCONSISTENT AGREEMENTS. Neither the Company nor any
Guarantor will, on or after the date of this Agreement, enter into any agreement
with respect to its securities that is inconsistent with the rights granted to
the Holders in this Agreement or otherwise conflicts with the provisions hereof.
Neither the Company nor any Guarantor has previously entered into any agreement
granting any registration rights with respect to its securities to any Person.
The rights granted to the Holders hereunder do not in any way conflict with and
are not inconsistent with the rights granted to the holders of the Company's and
the Guarantors' securities under any agreement in effect on the date hereof.
(c) AMENDMENTS AND WAIVERS. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to or departures
from the provisions hereof may not be given unless (i) in the case of Section 5
hereof and this Section 10(c)(i), the Company has obtained the written consent
of Holders of all outstanding Transfer Restricted Securities and (ii) in the
case of all other provisions hereof, the Company has obtained the written
consent of Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities (excluding Transfer Restricted Securities held by the
Company or its Affiliates). Notwithstanding the foregoing, a waiver or consent
to departure from the provisions hereof that relates exclusively to the rights
of Holders whose Transfer Restricted Securities are being tendered pursuant to
the Exchange Offer, and that does not affect directly or indirectly the rights
of other Holders whose Transfer Restricted Securities are not being tendered
pursuant to such Exchange Offer, may be given by the Holders of a majority of
the outstanding principal amount of Transfer Restricted Securities subject to
such Exchange Offer.
(d) THIRD PARTY BENEFICIARY. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company and the
Guarantors, on the one hand, and the Initial Purchasers, on the other hand, and
shall have the right to enforce such agreements directly to the extent they may
deem such enforcement necessary or advisable to protect its rights or the rights
of Holders hereunder.
(e) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of the
Registrar under the Indenture, with a copy to the Registrar under the
Indenture; and
18
<PAGE>
(ii) if to the Company or the Guarantors:
Dura Operating Corp.
4508 IDS Center
Minneapolis, MN 55402
Telecopier No.: (612) 332-2012
Attention: Scott D. Rued
With a copy to:
Kirkland & Ellis
200 E. Randolph Drive
Chicago, IL 60601
Telecopier No.: (312) 861-2200
Attention: Dennis M. Myers
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next business day, if timely delivered
to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
Upon the date of filing of the Exchange Offer or a Shelf Registration
Statement, as the case may be, notice shall be delivered to the Initial
Purchasers in the form attached hereto as Exhibit A.
(f) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders; PROVIDED, that nothing herein shall be deemed to
permit any assignment, transfer or other disposition of Transfer Restricted
Securities in violation of the terms hereof or of the Purchase Agreement or the
Indenture. If any transferee of any Holder shall acquire Transfer Restricted
Securities in any manner, whether by operation of law or otherwise, such
Transfer Restricted Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Transfer Restricted Securities such
Person shall be conclusively deemed to have agreed to be bound by and to perform
all of the terms and provisions of this Agreement, including the restrictions on
resale set forth in this Agreement and, if applicable, the Purchase Agreement,
and such Person shall be entitled to receive the benefits hereof.
(g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
19
<PAGE>
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
(j) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
(k) ENTIRE AGREEMENT. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
20
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
DURA OPERATING CORP.
By: *
-------------------------
DURA AUTOMOTIVE SYSTEMS, INC.
By: *
-------------------------
DURA AUTOMOTIVE SYSTEMS, INC.
COLUMN SHIFTER OPERATIONS
By: *
-------------------------
DURA AUTOMOTIVE SYSTEMS CABLE
OPERATIONS, INC.
By: *
-------------------------
UNIVERSAL TOOL & STAMPING
COMPANY INC.
By: *
-------------------------
ADWEST ELECTRONICS, INC.
By: *
-------------------------
ADWEST WESTERN AUTOMOTIVE,
INC.
By: *
-------------------------
21
<PAGE>
X.E. CO.
By: *
-------------------------
EXCEL OF TENNESSEE L.P.
By: Excel Industries of
Michigan, Inc.
Its: General Partner
By: *
-------------------------
EXCEL CORPORATION
By: *
-------------------------
EXCEL INDUSTRIES OF
MICHIGAN, INC.
By: *
-------------------------
ANDERSON INDUSTRIES, INC.
By: *
-------------------------
ATWOOD INDUSTRIES, INC.
By: *
-------------------------
HYDRO FLAME CORPORATION
By: *
-------------------------
ATWOOD AUTOMOTIVE INC.
By: *
-------------------------
22
<PAGE>
MARK I MOLDED PLASTICS, INC.
By: *
-------------------------
MARK I MOLDED PLASTICS OF
TENNESSEE, INC.
By: *
-------------------------
*/s/ David Bovee
- -------------------------
DAVID R. BOVEE, solely in his
capacity as attorney-in-fact pursuant
to power of attorney
23
<PAGE>
NATIONSBANC MONTGOMERY SECURITIES LLC
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
By: NATIONSBANC MONTGOMERY SECURITIES LLC
By: /s/ Daniel J. Kelly
-------------------------
Name: Daniel J. Kelly
-----------------------
Title: Principal
----------------------
24
<PAGE>
EXHIBIT A
NOTICE OF FILING OF
A/B EXCHANGE OFFER REGISTRATION STATEMENT
To: NationsBanc Montgomery Securities LLC
NationsBank Corporate Center
100 North Tryon Street
NC1-007-07-01
Charlotte, North Carolina 28255
Attention: Keith DeLeon (Legal Department)
Fax: (704) 386-6453
From: Dura Operating Corp.
9% Senior Subordinated Notes due 2009
Date: ___, 1999
For your information only (NO ACTION REQUIRED):
Today, ______, 1999, we filed [an Exchange Registration Statement/a
Shelf Registration Statement] with the Securities and Exchange Commission. We
currently expect this registration statement to be declared effective within
_____ business days of the date hereof.
25
<PAGE>
- --------------------------------------------------------------------------------
SERIES A AND SERIES B
E100,000,000
9% SENIOR SUBORDINATED NOTES DUE 2009
REGISTRATION RIGHTS AGREEMENT
DATED AS OF APRIL 22, 1999
BY AND AMONG
DURA OPERATING CORP.
DURA AUTOMOTIVE SYSTEMS, INC.
DURA AUTOMOTIVE SYSTEMS, INC. COLUMN SHIFTER OPERATIONS
DURA AUTOMOTIVE SYSTEMS CABLE OPERATIONS, INC.
UNIVERSAL TOOL & STAMPING COMPANY INC.
ADWEST ELECTRONICS, INC.
ADWEST WESTERN AUTOMOTIVE, INC.
X.E. CO.
EXCEL OF TENNESSEE L.P.
EXCEL CORPORATION
EXCEL INDUSTRIES OF MICHIGAN, INC.
ANDERSON INDUSTRIES, INC.
ATWOOD INDUSTRIES, INC.
HYDRO FLAME CORPORATION
ATWOOD AUTOMOTIVE INC.
MARK I MOLDED PLASTICS, INC.
MARK I MOLDED PLASTICS OF TENNESSEE, INC.
AND
BANK OF AMERICA INTERNATIONAL LIMITED
DONALDSON, LUFKIN & JENRETTE INTERNATIONAL
<PAGE>
This Registration Rights Agreement (this "AGREEMENT") is made and entered
into as of April 20, 1999, by and among Dura Operating Corp., a Delaware
corporation (the "COMPANY"), Dura Automotive Systems, Inc., Dura Automotive
Systems, Inc. Column Shifter Operations, Dura Automotive Systems Cable
Operations, Inc., Universal Tool & Stamping Company Inc., Adwest Electronics,
Inc., Adwest Western Automotive, Inc., X.E. Co., Excel of Tennessee L.P., Excel
Corporation, Excel Industries of Michigan, Inc., Anderson Industries, Inc.,
Atwood Industries, Inc., Hydro Flame Corporation, Atwood Automotive Inc., Mark I
Molded Plastics, Inc. and Mark I Molded Plastics of Tennessee, Inc. (each a
"GUARANTOR" and, collectively, the "GUARANTORS"), Bank of America International
Limited and Donaldson, Lufkin & Jenrette International (each an "INITIAL
PURCHASER" and, collectively, the "INITIAL PURCHASERS"), each of whom has agreed
to purchase the Company's 9% Series A Senior Subordinated Notes due 2009 (the
"SERIES A NOTES") pursuant to the Purchase Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated April
15, 1999 (the "PURCHASE AGREEMENT"), by and among the Company, the Guarantors
and the Initial Purchasers. In order to induce the Initial Purchasers to
purchase the Series A Notes, the Company has agreed to provide the registration
rights set forth in this Agreement. The execution and delivery of this
Agreement is a condition to the obligations of the Initial Purchasers set forth
in Section 5 of the Purchase Agreement. Capitalized terms used herein and not
otherwise defined shall have the meaning assigned to them in the Indenture,
dated April 22, 1999, between the Company and U.S. Bank Trust National
Association, as Trustee, relating to the Series A Notes and the Series B Notes
(the "INDENTURE").
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have the
following meanings:
ACT: The Securities Act of 1933, as amended.
AFFILIATE: As defined in Rule 144 of the Act.
BROKER-DEALER: Any broker or dealer registered under the Exchange Act.
BUSINESS DAY: Any day except a Saturday, Sunday or other day in the City
of New York on which banks are authorized or ordered to close.
CERTIFICATED SECURITIES: Definitive Notes, as defined in the Indenture.
CLOSING DATE: The date hereof.
COMMISSION: The Securities and Exchange Commission.
CONSUMMATE: An Exchange Offer shall be deemed "Consummated" for purposes
of this Agreement upon the occurrence of (a) the filing and effectiveness under
the Act of the Exchange Offer Registration Statement relating to the Series B
Notes to be issued in the Exchange Offer,
<PAGE>
(b) the maintenance of such Exchange Offer Registration Statement continuously
effective and the keeping of the Exchange Offer open for a period not less than
the period required pursuant to Section 3(b) hereof and (c) the delivery by the
Company to the Registrar under the Indenture of Series B Notes in the same
aggregate principal amount as the aggregate principal amount of Series A Notes
tendered by Holders thereof pursuant to the Exchange Offer.
CONSUMMATION DEADLINE: As defined in Section 3(b) hereof.
EFFECTIVENESS DEADLINE: As defined in Section 3(a) and 4(a) hereof.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
EXCHANGE OFFER: The exchange and issuance by the Company of a principal
amount of Series B Notes (which shall be registered pursuant to the Exchange
Offer Registration Statement) equal to the outstanding principal amount of
Series A Notes that are tendered by such Holders in connection with such
exchange and issuance.
EXCHANGE OFFER REGISTRATION STATEMENT: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
EXEMPT RESALES: The transactions in which the Initial Purchasers propose
to sell the Series A Notes to certain "qualified institutional buyers," as such
term is defined in Rule 144A under the Act and pursuant to Regulation S under
the Act.
FILING DEADLINE: As defined in Sections 3(a) and 4(a) hereof.
HOLDERS: As defined in Section 2 hereof.
PROSPECTUS: The prospectus included in a Registration Statement at the
time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.
RECOMMENCEMENT DATE: As defined in Section 6(d) hereof.
REGISTRATION DEFAULT: As defined in Section 5 hereof.
REGISTRATION STATEMENT: Any registration statement of the Company and
the Guarantors relating to (a) an offering of Series B Notes pursuant to an
Exchange Offer or (b) the registration for resale of Transfer Restricted
Securities pursuant to the Shelf Registration Statement, in each case (i) that
is filed pursuant to the provisions of this Agreement and (ii) including the
Prospectus included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.
REGULATION S: Regulation S promulgated under the Act.
RULE 144: Rule 144 promulgated under the Act.
2
<PAGE>
SERIES B NOTES: The Company's 9% Series B Senior Subordinated Notes due
2009 to be issued pursuant to the Indenture: (i) in the Exchange Offer or (ii)
as contemplated by Section 4 hereof.
SHELF REGISTRATION STATEMENT: As defined in Section 4 hereof.
SUSPENSION NOTICE: As defined in Section 6(d) hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb) as
in effect on the date of the Indenture.
TRANSFER RESTRICTED SECURITIES: Each (A) Series A Note, until the
earliest to occur of (i) the date on which such Series A Note is exchanged in
the Exchange Offer for a Series B Note which is entitled to be resold to the
public by the Holder thereof without complying with the prospectus delivery
requirements of the Act, (ii) the date on which such Series A Note has been
disposed of in accordance with a Shelf Registration Statement (and the
purchasers thereof have been issued Series B Notes), or (iii) the date on which
such Series A Note is eligible for distribution without restriction to the
public pursuant to Rule 144 under the Act and each (B) Series B Note held by a
Broker-Dealer until the date on which such Series B Note is disposed of by a
Broker-Dealer pursuant to the "Plan of Distribution" contemplated by the
Exchange Offer Registration Statement (including the delivery of the Prospectus
contained therein).
SECTION 2. HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities
(each, a "HOLDER") whenever such Person owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permitted by applicable
federal law (after the procedures set forth in Section 6(a)(i) below have been
complied with), the Company and the Guarantors shall (i) cause the Exchange
Offer Registration Statement to be filed with the Commission as soon as
practicable after the Closing Date, but in no event later than 60 days after the
Closing Date (such 60th day being the "FILING DEADLINE"), (ii) use their
respective reasonable best efforts to cause such Exchange Offer Registration
Statement to become effective at the earliest possible time, but in no event
later than 150 days after the Closing Date (such 150th day being the
"EFFECTIVENESS DEADLINE"), (iii) in connection with the foregoing, (A) file all
pre-effective amendments to such Exchange Offer Registration Statement as may be
necessary in order to cause it to become effective, (B) file, if applicable, a
post-effective amendment to such Exchange Offer Registration Statement pursuant
to Rule 430A under the Act and (C) cause all necessary filings, if any, in
connection with the registration and qualification of the Series B Notes to be
made under the Blue Sky laws of such jurisdictions as are necessary to permit
Consummation of the Exchange Offer and (iv) upon the effectiveness of such
Exchange Offer Registration Statement, commence and Consummate the Exchange
Offer. The Exchange Offer shall be on the appropriate form permitting (i)
registration of the Series B Notes to be offered in exchange for the Series A
Notes that are Transfer Restricted Securities and (ii) resales of Series B Notes
by Broker-Dealers that tendered into the Exchange Offer Series A Notes that such
Broker-Dealer acquired for its own
3
<PAGE>
account as a result of market making activities or other trading activities
(other than Series A Notes acquired directly from the Company or any of its
Affiliates) as contemplated by Section 3(c) below.
(b) The Company and the Guarantors shall use their respective
reasonable best efforts to cause the Exchange Offer Registration Statement to be
effective continuously, and shall keep the Exchange Offer open for a period of
not less than the minimum period required under applicable federal and state
securities laws to Consummate the Exchange Offer; PROVIDED, HOWEVER, that in no
event shall such period be less than 20 Business Days. The Company and the
Guarantors shall cause the Exchange Offer to comply with all applicable federal
and state securities laws. No securities other than the Series B Notes shall be
included in the Exchange Offer Registration Statement. The Company and the
Guarantors shall use their respective best efforts to cause the Exchange Offer
to be Consummated on the earliest practicable date after the Exchange Offer
Registration Statement has become effective, but in no event later than 30
Business Days thereafter (such 30th day being the "CONSUMMATION DEADLINE").
(c) The Company shall include a "Plan of Distribution" section in the
Prospectus contained in the Exchange Offer Registration Statement and indicate
therein that any Broker-Dealer who holds Transfer Restricted Securities that
were acquired for the account of such Broker-Dealer as a result of market-making
activities or other trading activities (other than Series A Notes acquired
directly from the Company or any Affiliate of the Company), may exchange such
Transfer Restricted Securities pursuant to the Exchange Offer. Such "Plan of
Distribution" section shall also contain all other information with respect to
such sales by such Broker-Dealers that the Commission may require in order to
permit such sales pursuant thereto, but such "Plan of Distribution" shall not
name any such Broker-Dealer or disclose the amount of Transfer Restricted
Securities held by any such Broker-Dealer, except to the extent required by the
Commission as a result of a change in policy, rules or regulations after the
date of this Agreement. See the Shearman & Sterling no-action letter (available
July 2, 1993).
Because such Broker-Dealer may be deemed to be an "underwriter" within
the meaning of the Act and must, therefore, deliver a prospectus meeting the
requirements of the Act in connection with its initial sale of any Series B
Notes received by such Broker-Dealer in the Exchange Offer, the Company and the
Guarantors shall permit the use of the Prospectus contained in the Exchange
Offer Registration Statement by such Broker-Dealer to satisfy such prospectus
delivery requirement. To the extent necessary to ensure that the prospectus
contained in the Exchange Offer Registration Statement is available for sales of
Series B Notes by Broker-Dealers, the Company and the Guarantors agree to use
their respective reasonable best efforts to keep the Exchange Offer Registration
Statement continuously effective, supplemented, amended and current as required
by and subject to the provisions of Section 6(a) and (c) hereof and in
conformity with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, for a
period of 180 days from the Consummation Deadline or such shorter period as will
terminate when all Transfer Restricted Securities covered by such Registration
Statement have been sold pursuant thereto. The Company and the Guarantors shall
provide sufficient copies of the latest version of such Prospectus to such
Broker-Dealers, promptly upon request, and in no event later than one Business
Day after such request, at any time during such period.
4
<PAGE>
SECTION 4. SHELF REGISTRATION
(a) SHELF REGISTRATION. If (i) the Exchange Offer is not permitted
by applicable law (after the Company and the Guarantors have complied with the
procedures set forth in Section 6(a)(i) below) or (ii) if any Holder of Transfer
Restricted Securities shall notify the Company in writing within 20 Business
Days following the Consummation Deadline that (A) such Holder was prohibited by
law or Commission policy from participating in the Exchange Offer or (B) such
Holder may not resell the Series B Notes acquired by it in the Exchange Offer to
the public without delivering a prospectus and the Prospectus contained in the
Exchange Offer Registration Statement is not appropriate or available for such
resales by such Holder or (C) such Holder is a Broker-Dealer and holds Series A
Notes acquired directly from the Company or any of its Affiliates, then the
Company and the Guarantors shall:
(x) use their respective reasonable best efforts to cause to be filed, on or
prior to 30 days after the earlier of (i) the date on which the Company
determines that the Exchange Offer Registration Statement cannot be filed as a
result of clause (a)(i) above and (ii) the date on which the Company receives
the notice specified in clause (a)(ii) above (such earlier date, the "FILING
DEADLINE"), a shelf registration statement pursuant to Rule 415 under the Act
(which may be an amendment to the Exchange Offer Registration Statement (the
"SHELF REGISTRATION STATEMENT")), relating to all Transfer Restricted Securities
(provided, however, nothing in this Section 4(a)(x) shall require the filing of
the Shelf Registration Statement prior to the Filing Deadline for the Exchange
Offer Registration Statement, and
(y) shall use their respective reasonable best efforts to cause such Shelf
Registration Statement to become effective on or prior to 90 days after the
Filing Deadline for the Shelf Registration Statement (such 90th day the
"EFFECTIVENESS DEADLINE").
If, after the Company has filed an Exchange Offer Registration Statement
that satisfies the requirements of Section 3(a) above, the Company is required
to file and make effective a Shelf Registration Statement solely because the
Exchange Offer is not permitted under applicable federal law (i.e., clause
(a)(i) above), then the filing of the Exchange Offer Registration Statement
shall be deemed to satisfy the requirements of clause (x) above; PROVIDED that,
in such event, the Company shall remain obligated to meet the Effectiveness
Deadline set forth in clause (y).
To the extent necessary to ensure that the Shelf Registration Statement
is available for sales of Transfer Restricted Securities by the Holders thereof
entitled to the benefit of this Section 4(a) and the other securities required
to be registered therein pursuant to Section 6(b)(ii) hereof, the Company and
the Guarantors shall use their respective best efforts to keep any Shelf
Registration Statement required by this Section 4(a) continuously effective,
supplemented, amended and current as required by and subject to the provisions
of Sections 6(b) and (c) hereof and in conformity with the requirements of this
Agreement, the Act and the policies, rules and regulations of the Commission as
announced from time to time, for a period of at least two years (as extended
pursuant to Section 6(c)(i)) following the Closing Date, or such shorter period
as will terminate when all Transfer Restricted Securities covered by such Shelf
Registration Statement have been sold pursuant thereto.
5
<PAGE>
(b) PROVISION BY HOLDERS OF CERTAIN INFORMATION IN CONNECTION WITH
THE SHELF REGISTRATION STATEMENT. No Holder of Transfer Restricted Securities
may include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 10 days after receipt of a request therefor, the
information specified in Item 507 or 508 of Regulation S-K, as applicable, of
the Act for use in connection with any Shelf Registration Statement or
Prospectus or preliminary Prospectus included therein. No Holder of Transfer
Restricted Securities shall be entitled to liquidated damages pursuant to
Section 5 hereof unless and until such Holder shall have provided all such
information. Each selling Holder agrees to promptly furnish additional
information required to be disclosed in order to make the information previously
furnished to the Company by such Holder not materially misleading. The Company
shall not be obligated to supplement such Shelf Registration Statement after it
has been declared effective by the Commission more than one time per quarterly
period to reflect additional Holders.
SECTION 5. LIQUIDATED DAMAGES
If (i) any Registration Statement required by this Agreement is not filed
with the Commission on or prior to the applicable Filing Deadline, (ii) any such
Registration Statement has not been declared effective by the Commission on or
prior to the applicable Effectiveness Deadline, (iii) the Exchange Offer has not
been Consummated on or prior to the Consummation Deadline or (iv) any
Registration Statement required by this Agreement is filed and declared
effective but shall thereafter cease to be effective or fail to be usable for
its intended purpose without being succeeded within 5 Business Days by a
post-effective amendment to such Registration Statement that cures such failure
and that is itself declared effective immediately (each such event referred to
in clauses (i) through (iv), a "REGISTRATION DEFAULT"), then the Company and the
Guarantors hereby jointly and severally agree to pay to each Holder of Transfer
Restricted Securities affected thereby (subject to Section 4(b)) liquidated
damages in an amount equal to .50% per annum over the stated rate for the
Transfer Restricted Securities held by such Holder for each week or portion
thereof that the Registration Default continues for the first 90-day period
immediately following the occurrence of such Registration Default. The amount
of the liquidated damages shall increase by an additional .50% per annum over
the stated rate for the Transfer Restricted Securities at the beginning of each
subsequent 90-day period until all Registration Defaults have been cured, up to
a maximum amount of liquidated damages of 1.0% per annum over the stated rate
for the Transfer Restricted Securities; PROVIDED that the Company and the
Guarantors shall in no event be required to pay liquidated damages for more than
one Registration Default at any given time. Notwithstanding anything to the
contrary set forth herein, (1) upon filing of the Exchange Offer Registration
Statement (and/or, if applicable, the Shelf Registration Statement), in the case
of (i) above, (2) upon the effectiveness of the Exchange Offer Registration
Statement (and/or, if applicable, the Shelf Registration Statement), in the case
of (ii) above, (3) upon Consummation of the Exchange Offer, in the case of (iii)
above, or (4) upon the filing of a post-effective amendment to the Registration
Statement or an additional Registration Statement that causes the Exchange Offer
Registration Statement (and/or, if applicable, the Shelf Registration Statement)
to again be declared effective or made usable in the case of (iv) above, the
liquidated damages payable with respect to the Transfer Restricted Securities as
a result of such clause (i), (ii), (iii) or (iv), as applicable, shall cease.
6
<PAGE>
All accrued liquidated damages shall be paid to the Holders entitled
thereto, in the manner provided for the payment of interest in the Indenture, on
each Interest Payment Date, as more fully set forth in the Indenture and the
Notes. Notwithstanding the fact that any securities for which liquidated
damages are due cease to be Transfer Restricted Securities, all obligations of
the Company and the Guarantors to pay liquidated damages with respect to
securities shall survive until such time as such obligations with respect to
such securities shall have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) EXCHANGE OFFER REGISTRATION STATEMENT. In connection with the
Exchange Offer, the Company and the Guarantors shall (x) comply with all
applicable provisions of Section 6(c) below, (y) use their respective reasonable
best efforts to effect such exchange and to permit the resale of Series B Notes
by Broker-Dealers that tendered in the Exchange Offer Series A Notes that such
Broker-Dealer acquired for its own account as a result of its market making
activities or other trading activities (other than Series A Notes acquired
directly from the Company or any of its Affiliates) being sold in accordance
with the intended method or methods of distribution thereof, and (z) comply with
all of the following provisions:
(i) If, following the date hereof there has been announced a
change in Commission policy with respect to exchange offers such as the
Exchange Offer, that in the reasonable opinion of counsel to the Company
raises a substantial question as to whether the Exchange Offer is permitted
by applicable federal law, the Company and the Guarantors hereby agree to
seek a no-action letter or other favorable decision from the Commission
allowing the Company and the Guarantors to Consummate an Exchange Offer for
such Transfer Restricted Securities. The Company and the Guarantors hereby
agree to pursue the issuance of such a decision to the Commission staff
level. In connection with the foregoing, the Company and the Guarantors
hereby agree to take all such other actions as may be requested by the
Commission or otherwise required in connection with the issuance of such
decision, including without limitation (A) participating in telephonic
conferences with the Commission, (B) delivering to the Commission staff an
analysis prepared by counsel to the Company setting forth the legal bases,
if any, upon which such counsel has concluded that such an Exchange Offer
should be permitted and (C) diligently pursuing a resolution (which need
not be favorable) by the Commission staff.
(ii) As a condition to its participation in the Exchange Offer,
each Holder of Transfer Restricted Securities (including, without
limitation, any Holder who is a Broker-Dealer) shall furnish, upon the
request of the Company, prior to the Consummation of the Exchange Offer, a
written representation to the Company and the Guarantors (which may be
contained in the letter of transmittal contemplated by the Exchange Offer
Registration Statement) to the effect that (A) it is not an Affiliate of
the Company, (B) it is not engaged in, and does not intend to engage in,
and has no arrangement or understanding with any person to participate in,
a distribution of the Series B Notes to be issued in the Exchange Offer and
(C) it is acquiring the Series B Notes in its ordinary course of business.
As a condition to its participation in the Exchange Offer each Holder using
the Exchange Offer to participate in a distribution of the Series B Notes
shall acknowledge and agree that, if the resales are of Series B Notes
obtained by such Holder in exchange for Series A Notes
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acquired directly from the Company or an Affiliate thereof, it (1) could
not, under Commission policy as in effect on the date of this Agreement,
rely on the position of the Commission enunciated in MORGAN STANLEY AND
CO., INC. (available June 5, 1991) and EXXON CAPITAL HOLDINGS CORPORATION
(available May 13, 1988), as interpreted in the Commission's letter to
SHEARMAN & STERLING dated July 2, 1993, and similar no-action letters
(including, if applicable, any no-action letter obtained pursuant to clause
(i) above), and (2) must comply with the registration and prospectus
delivery requirements of the Act in connection with a secondary resale
transaction and that such a secondary resale transaction must be covered by
an effective registration statement containing the selling security holder
information required by Item 507 or 508, as applicable, of Regulation S-K.
(iii) Prior to effectiveness of the Exchange Offer Registration
Statement, the Company and the Guarantors shall provide a supplemental
letter to the Commission (A) stating that the Company and the Guarantors
are registering the Exchange Offer in reliance on the position of the
Commission enunciated in EXXON CAPITAL HOLDINGS CORPORATION (available May
13, 1988), MORGAN STANLEY AND CO., INC. (available June 5, 1991) as
interpreted in the Commission's letter to SHEARMAN & STERLING dated July 2,
1993, and, if applicable, any no-action letter obtained pursuant to clause
(i) above, (B) including a representation that neither the Company nor any
Guarantor has entered into any arrangement or understanding with any Person
to distribute the Series B Notes to be received in the Exchange Offer and
that, to the Company's and each Guarantor's information and belief, each
Holder participating in the Exchange Offer is acquiring the Series B Notes
in its ordinary course of business and has no arrangement or understanding
with any Person to participate in the distribution of the Series B Notes
received in the Exchange Offer and (C) any other undertaking or
representation required by the Commission as set forth in any no-action
letter obtained pursuant to clause (i) above, if applicable.
(b) SHELF REGISTRATION STATEMENT. In connection with the Shelf
Registration Statement, the Company and the Guarantors shall (i) comply with all
the provisions of Section 6(c) below and use their respective reasonable best
efforts to effect such registration to permit the sale of the Transfer
Restricted Securities being sold in accordance with the intended method or
methods of distribution thereof (as indicated in the information furnished to
the Company pursuant to Section 4(b) hereof), and pursuant thereto the Company
and the Guarantors will prepare and file with the Commission a Registration
Statement relating to the registration on any appropriate form under the Act,
which form shall be available for the sale of the Transfer Restricted Securities
in accordance with the intended method or methods of distribution thereof within
the time periods and otherwise in accordance with the provisions hereof, and
(ii) issue, upon the request of any Holder providing satisfactory
evidence to the Company of its sale of Series A Notes or purchaser of Series A
Notes covered by any Shelf Registration Statement contemplated by this
Agreement, Series B Notes having an aggregate principal amount equal to the
aggregate principal amount of Series A Notes sold pursuant to the Shelf
Registration Statement and surrendered to the Company for cancellation; the
Company shall register Series B Notes on the Shelf Registration Statement for
this purpose and issue the Series B
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Notes to the purchaser(s) of securities subject to the Shelf Registration
Statement in the names as such purchaser(s) shall designate.
(c) GENERAL PROVISIONS. In connection with any Registration
Statement and any related Prospectus required by this Agreement, the Company and
the Guarantors shall:
(i) use their respective reasonable best efforts to keep such
Registration Statement continuously effective and provide all requisite
financial statements for the period specified in Section 3 or 4 of this
Agreement, as applicable. Upon the occurrence of any event that would
cause any such Registration Statement or the Prospectus contained therein
(A) to contain an untrue statement of material fact or omit to state any
material fact necessary to make the statements therein not misleading or
(B) not to be effective and usable for resale of Transfer Restricted
Securities during the period required by this Agreement, the Company and
the Guarantors shall file promptly an appropriate amendment to such
Registration Statement curing such defect, and, if Commission review is
required, use their respective reasonable best efforts to cause such
amendment to be declared effective as soon as practicable.
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the applicable Registration Statement as may
be necessary to keep such Registration Statement effective for the
applicable period set forth in Section 3 or 4 hereof, as the case may be;
cause the Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 under
the Act, and to comply fully with Rules 424, 430A and 462, as applicable,
under the Act in a timely manner; and comply with the provisions of the Act
with respect to the disposition of all securities covered by such
Registration Statement during the applicable period in accordance with the
intended method or methods of distribution by the sellers thereof set forth
in such Registration Statement or supplement to the Prospectus;
(iii) with respect to a Shelf Registration Statement, advise the
selling Holders promptly and, if requested by such Persons, confirm such
advice in writing, (A) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to any
applicable Registration Statement or any post-effective amendment thereto,
when the same has become effective, (B) of any request by the Commission
for amendments to the Registration Statement or amendments or supplements
to the Prospectus or for additional information relating thereto, (C) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement under the Act or of the
suspension by any state securities commission of the qualification of the
Transfer Restricted Securities for offering or sale in any jurisdiction, or
the initiation of any proceeding for any of the preceding purposes, (D) of
the existence of any fact or the happening of any event that makes any
statement of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement thereto or any document
incorporated by reference therein untrue, or that requires the making of
any additions to or changes in the Registration Statement in order to make
the statements therein not misleading, or that requires the making of any
additions to or changes in the Prospectus in order to make the statements
therein, in the light of the circumstances under which they
9
<PAGE>
were made, not misleading. If at any time the Commission shall issue any
stop order suspending the effectiveness of the Registration Statement, or
any state securities commission or other regulatory authority shall issue
an order suspending the qualification or exemption from qualification of
the Transfer Restricted Securities under state securities or Blue Sky laws,
the Company and the Guarantors shall use their respective reasonable
efforts to obtain the withdrawal or lifting of such order at the earliest
possible time;
(iv) subject to Section 6(c)(i), if any fact or event contemplated
by Section 6(c)(iii)(D) above shall exist or have occurred, prepare a
supplement or post-effective amendment to the Registration Statement or
related Prospectus or any document incorporated therein by reference or
file any other required document so that, as thereafter delivered to the
purchasers of Transfer Restricted Securities, the Prospectus will not
contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(v) furnish to the Initial Purchasers and with respect to a Shelf
Registration Statement, each selling Holder named in any Registration
Statement or Prospectus in connection with such sale, if any, before filing
with the Commission, copies of any Registration Statement or any Prospectus
included therein or any amendments or supplements to any such Registration
Statement or Prospectus (including all documents incorporated by reference
after the initial filing of such Registration Statement), which documents
will be subject to the review and comment of such Holders in connection
with such sale, if any, for a period of at least five Business Days, and
the Company will not file any such Registration Statement or Prospectus or
any amendment or supplement to any such Registration Statement or
Prospectus (including all such documents incorporated by reference) to
which the selling Holders of the Transfer Restricted Securities covered by
such Registration Statement in connection with such sale, if any, shall
reasonably object within five Business Days after the receipt thereof. A
selling Holder shall be deemed to have reasonably objected to such filing
if such Registration Statement, amendment, Prospectus or supplement, as
applicable, as proposed to be filed, contains a material misstatement or
omission or fails to comply with the applicable requirements of the Act;
(vi) with respect to a Shelf Registration Statement, provide copies
of any document that is incorporated by reference into a Registration
Statement or Prospectus to the selling Holders in connection with such
sale, if any;
(vii) with respect to a Shelf Registration Statement, make available
at reasonable times for inspection by the selling Holders participating in
any disposition pursuant to such Registration Statement and any attorney or
accountant retained by such selling Holders, all financial and other
records, pertinent corporate documents of the Company and cause the
Company's officers, directors and employees to supply all information
reasonably requested under the circumstances by any such selling Holder,
attorney or accountant in connection with such Registration Statement or
any post-effective amendment thereto subsequent to the filing thereof and
prior to its effectiveness;
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<PAGE>
(viii) with respect to a Shelf Registration Statement, if requested
by any selling Holders in connection with such sale, if any, promptly
include in any Registration Statement or Prospectus, pursuant to a
supplement or post-effective amendment if necessary, such information as
such selling Holders may reasonably request to have included therein,
including, without limitation, information relating to the "Plan of
Distribution" of the Transfer Restricted Securities; and make all required
filings of such Prospectus supplement or post-effective amendment as soon
as practicable after the Company is notified of the matters to be included
in such Prospectus supplement or post-effective amendment;
(ix) with respect to a Shelf Registration Statement, furnish to
each selling Holder in connection with such sale, if any, without charge,
at least one copy of the Registration Statement, as first filed with the
Commission, and of each amendment thereto, including all documents
incorporated by reference therein and all exhibits (including exhibits
incorporated therein by reference);
(x) with respect to a Shelf Registration Statement deliver to each
selling Holder without charge, as many copies of the Prospectus (including
each preliminary prospectus) and any amendment or supplement thereto as
such Persons reasonably may request; the Company and the Guarantors hereby
consent to the use (in accordance with law) of the Prospectus and any
amendment or supplement thereto by each selling Holder in connection with
the offering and the sale of the Transfer Restricted Securities covered by
the Prospectus or any amendment or supplement thereto;
(xi) upon the request of any Holders who collectively hold an
aggregate principal amount of Series A Notes in excess of 20% of the
aggregate principal amount of the outstanding Transfer Restricted
Securities (the "Requesting Holders"), enter into an underwriting agreement
on one occasion and make such representations and warranties and take all
such other actions as are reasonably customary in underwritten offerings in
order to expedite or facilitate the disposition of the Transfer Restricted
Securities pursuant to any applicable Registration Statement contemplated
by this Agreement as may be reasonably requested by the Requesting Holders
in connection with any sale or resale pursuant to any applicable
Registration Statement. In such connection, the Company and the Guarantors
shall:
(A) upon request of the Requesting Holders, furnish (or in
the case of paragraphs (2) and (3), use their reasonable best
efforts to cause to be furnished) to each Requesting Holder,
upon Consummation of the Exchange Offer or upon the
effectiveness of the Shelf Registration Statement, as the case
may be:
(1) a certificate, dated such date,
signed on behalf of the Company and each
Guarantor by (x) the President or any Vice
President and (y) a principal financial or
accounting officer of the Company and such
Guarantor, confirming, as of the date
thereof, the matters set forth in Sections
1(k), 5(b) and 5(e) of the Purchase Agreement
and such other similar matters as such
Holders may reasonably request;
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<PAGE>
(2) an opinion, dated the date of
Consummation of the Exchange Offer or the
date of effectiveness of the Shelf
Registration Statement, as the case may be,
of counsel for the Company and the Guarantors
covering matters similar to those set forth
in paragraph (c) of Section 5 of the Purchase
Agreement and such other matter as such
Holder may reasonably request, and in any
event including a statement to the effect
that such counsel has participated in
conferences with officers and other
representatives of the Company and the
Guarantors, representatives of the
independent public accountants for the
Company and the Guarantors and have
considered the matters required to be stated
therein and the statements contained therein,
although such counsel has not independently
verified the accuracy, completeness or
fairness of such statements; and that such
counsel advises that, on the basis of the
foregoing (relying as to materiality to the
extent such counsel deems appropriate upon
the statements of officers and other
representatives of the Company and the
Guarantors and without independent check or
verification), no facts came to such
counsel's attention that caused such counsel
to believe that the applicable Registration
Statement, at the time such Registration
Statement or any post-effective amendment
thereto became effective and, in the case of
the Exchange Offer Registration Statement, as
of the date of Consummation of the Exchange
Offer, contained an untrue statement of a
material fact or omitted to state a material
fact required to be stated therein or
necessary to make the statements therein not
misleading, or that the Prospectus contained
in such Registration Statement as of its date
and, in the case of the opinion dated the
date of Consummation of the Exchange Offer,
as of the date of Consummation, contained an
untrue statement of a material fact or
omitted to state a material fact necessary in
order to make the statements therein, in the
light of the circumstances under which they
were made, not misleading. Without limiting
the foregoing, such counsel may state further
that such counsel assumes no responsibility
for, and has not independently verified, the
accuracy, completeness or fairness of the
financial statements, notes and schedules and
other financial data included in any
Registration Statement contemplated by this
Agreement or the related Prospectus; and
(3) a customary comfort letter, dated
the date of Consummation of the Exchange
Offer, or as of the date of effectiveness of
the Shelf Registration Statement, as the case
may be, from the Company's independent
accountants, in the customary form and
covering matters of the type customarily
covered in comfort letters to underwriters in
connection with underwritten offerings, and
affirming the matters set forth in the
comfort letters delivered pursuant to Section
5(a) of the Purchase Agreement; and
(B) deliver such other documents and certificates as may be
reasonably requested by the selling Holders to evidence
compliance with the matters covered in clause (A) above and
with any customary conditions contained in any agreement
entered into by the Company and the Guarantors pursuant to
this clause (xi);
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<PAGE>
(v) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders and their counsel in
connection with the registration and qualification of the Transfer
Restricted Securities under the securities or Blue Sky laws of such
jurisdictions as the selling Holders may request and do any and all other
acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Transfer Restricted Securities covered by the
applicable Registration Statement; PROVIDED, HOWEVER, that neither the
Company nor any Guarantor shall be required to register or qualify as a
foreign corporation where it is not now so qualified or to take any action
that would subject it to the service of process in suits or to taxation,
other than as to matters and transactions relating to the Registration
Statement, in any jurisdiction where it is not now so subject;
(vi) in connection with any sale of Transfer Restricted Securities
that will result in such securities no longer being Transfer Restricted
Securities, cooperate with the Holders to facilitate the timely preparation
and delivery of certificates representing Transfer Restricted Securities to
be sold and not bearing any restrictive legends; and to register such
Transfer Restricted Securities in such denominations and such names as the
selling Holders may request at least two Business Days prior to such sale
of Transfer Restricted Securities;
(vii) use their respective best efforts to cause the disposition of
the Transfer Restricted Securities covered by the Registration Statement to
be registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof to
consummate the disposition of such Transfer Restricted Securities, subject
to the proviso contained in clause (v) above;
(viii) provide ISIN and CUSIP numbers, as applicable, for all
Transfer Restricted Securities not later than the effective date of a
Registration Statement covering such Transfer Restricted Securities and
provide the Trustee under the Indenture with printed certificates for the
Transfer Restricted Securities which are in a form eligible for deposit
with the Depository Trust Company;
(ix) otherwise use their respective best efforts to comply with all
applicable rules and regulations of the Commission, and make generally
available to its security holders with regard to any applicable
Registration Statement, as soon as practicable, a consolidated earnings
statement meeting the requirements of Rule 158 (which need not be audited)
covering a twelve-month period beginning after the effective date of the
Registration Statement (as such term is defined in paragraph (c) of Rule
158 under the Act);
(x) cause the Indenture to be qualified under the TIA not later
than the effective date of the first Registration Statement required by
this Agreement and, in connection therewith, cooperate with the Trustee and
the Holders to effect such changes to the Indenture as may be required for
such Indenture to be so qualified in accordance with the terms of the TIA;
and execute and use its best efforts to cause the Trustee to execute, all
documents that may be required to effect such changes and all other forms
and documents required to be filed with the Commission to enable such
Indenture to be so qualified in a timely manner; and
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<PAGE>
(xi) provide promptly to each Holder, upon request, each document
filed with the Commission pursuant to the requirements of Section 13 or
Section 15(d) of the Exchange Act.
(d) RESTRICTIONS ON HOLDERS. Each Holder agrees by acquisition of a
Transfer Restricted Security that, upon receipt of the notice referred to in
Section 6(c)(iii)(C) or any notice from the Company of the existence of any fact
of the kind described in Section 6(c)(iii)(D) hereof (in each case, a
"SUSPENSION NOTICE"), such Holder will forthwith discontinue disposition of
Transfer Restricted Securities pursuant to the applicable Registration Statement
until (i) such Holder has received copies of the supplemented or amended
Prospectus contemplated by Section 6(c)(iv) hereof, or (ii) such Holder is
advised in writing by the Company that the use of the Prospectus may be resumed,
and has received copies of any additional or supplemental filings that are
incorporated by reference in the Prospectus (in each case, the "RECOMMENCEMENT
DATE"). Each Holder receiving a Suspension Notice hereby agrees that it will
either (i) destroy any Prospectuses, other than permanent file copies, then in
such Holder's possession which have been replaced by the Company with more
recently dated Prospectuses or (ii) deliver to the Company (at the Company's
expense) all copies, other than permanent file copies, then in such Holder's
possession of the Prospectus covering such Transfer Restricted Securities that
was current at the time of receipt of the Suspension Notice. The time period
regarding the effectiveness of such Registration Statement set forth in Section
3 or 4 hereof, as applicable, shall be extended by a number of days equal to the
number of days in the period from and including the date of delivery of the
Suspension Notice to the date of delivery of the Recommencement Date.
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Company's and the Guarantors'
performance of or compliance with this Agreement will be borne by the Company,
regardless of whether a Registration Statement becomes effective, including
without limitation: (i) all registration and filing fees and expenses; (ii) all
fees and expenses of compliance with federal securities and state Blue Sky or
securities laws; (iii) all expenses of printing (including printing certificates
for the Series B Notes to be issued in the Exchange Offer and printing of
Prospectuses), messenger and delivery services and telephone; (iv) (A) all fees
and disbursements of counsel for the Company and the Guarantors and (B) one
counsel for the Holders of Transfer Restricted Securities in connection with an
underwritten offering; (v) all application and filing fees in connection with
listing the Series B Notes on a national securities exchange or automated
quotation system pursuant to the requirements hereof; and (vi) all fees and
disbursements of independent certified public accountants of the Company and the
Guarantors (including the expenses of any special audit and comfort letters
required by or incident to such performance).
The Company will, in any event, bear its and the Guarantors' internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expenses of
any annual audit and the fees and expenses of any Person, including special
experts, retained by the Company or the Guarantors.
(b) In connection with any Shelf Registration Statement required by
this Agreement, the Company and the Guarantors will reimburse the Initial
Purchasers and the Holders of Transfer Restricted Securities who are tendering
Series A Notes in the Exchange Offer and/or selling or
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<PAGE>
reselling Series A Notes or Series B Notes pursuant to the "Plan of
Distribution" contained in the Exchange Offer Registration Statement or the
Shelf Registration Statement, as applicable, for the reasonable fees and
disbursements of not more than one counsel, who shall be either Latham & Watkins
or Gardner, Carton & Douglas, who shall be chosen by the Initial Purchasers or,
if the Initial Purchasers are not Holders of Transfer Restricted Securities such
other firm as shall be chosen by the Requesting Holders for whose benefit such
Shelf Registration Statement is being prepared.
SECTION 8. INDEMNIFICATION
(a) The Company and the Guarantors agree, jointly and severally, to
indemnify and hold harmless each Holder, its directors, officers and each
Person, if any, who controls such Holder (within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act), from and against any and all losses,
claims, damages, liabilities, judgments (including without limitation, any legal
or other expenses incurred in connection with investigating or defending any
matter, including any action that could give rise to any such losses, claims,
damages, liabilities or judgments) caused by any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement,
preliminary prospectus or Prospectus (or any amendment or supplement thereto)
provided by the Company to any Holder for use in connection with the resale of
Series B Notes or registered Series A Notes, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages, liabilities or judgments are caused by an untrue
statement or omission or alleged untrue statement or omission that is based upon
information relating to any of the Holders furnished in writing to the Company
by any of the Holders.
(b) Each Holder of Transfer Restricted Securities agrees, severally
and not jointly, to indemnify and hold harmless the Company and the Guarantors,
and their respective directors and officers, and each person, if any, who
controls (within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act) the Company, or the Guarantors to the same extent as the foregoing
indemnity from the Company and the Guarantors set forth in Section (a) above,
but only with reference to information relating to such Holder furnished in
writing to the Company by such Holder expressly for use in any Registration
Statement. In no event shall any Holder, its directors, officers or any Person
who controls such Holder be liable or responsible for any amount in excess of
the amount by which the total amount received by such Holder with respect to its
sale of Transfer Restricted Securities pursuant to a Registration Statement
exceeds (i) the amount paid by such Holder for such Transfer Restricted
Securities and (ii) the amount of any damages that such Holder, its directors,
officers or any Person who controls such Holder has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission.
(c) In case any action shall be commenced involving any person in respect
of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"INDEMNIFIED PARTY"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "INDEMNIFYING PERSON") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all reasonable fees and expenses of such counsel, as incurred
(except that in the case of any action in respect of which indemnity may be
sought pursuant to both Sections 8(a) and
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<PAGE>
8(b), a Holder shall not be required to assume the defense of such action
pursuant to this Section 8(c), but may employ separate counsel and participate
in the defense thereof, but the fees and expenses of such counsel, except as
provided below, shall be at the expense of the Holder). Any indemnified party
shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of the indemnified party unless (i) the employment of
such counsel shall have been specifically authorized in writing by the
indemnifying party, (ii) the indemnifying party shall have failed to assume the
defense of such action or employ counsel reasonably satisfactory to the
indemnified party or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of the indemnified party). In any such case, the indemnifying party
shall not, in connection with any one action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
all indemnified parties and all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by a majority of
the Holders, in the case of the parties indemnified pursuant to Section 8(a),
and by the Company and Guarantors, in the case of parties indemnified pursuant
to Section 8(b). The indemnifying party shall indemnify and hold harmless the
indemnified party from and against any and all losses, claims, damages,
liabilities and judgments by reason of any settlement of any actio (i) effected
with its written consent or (ii) effected without its written consent if the
settlement is entered into more than 20 Business Days after the indemnifying
party shall have received a request from the indemnified party for reimbursement
for the fees and expenses of counsel (in any case where such fees and expenses
are at the expense of the indemnifying party) and, prior to the date of such
settlement, the indemnifying party shall have failed to comply with such
reimbursement request or given its good faith objection to such indemnification
request. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement or compromise of, or consent to the
entry of judgment with respect to, any pending or threatened action in respect
of which the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on claims that
are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(d) To the extent that the indemnification provided for in this
Section 8 is unavailable to an indemnified party in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or judgments (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company and
the Guarantors, on the one hand, and the Holders, on the other hand, from their
sale of Transfer Restricted Securities or (ii) if the allocation provided by
clause 8(d)(i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
8(d)(i) above but also the relative fault of the
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<PAGE>
Company and the Guarantors, on the one hand, and of the Holders, on the other
hand, in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative fault of the Company and the Guarantors,
on the one hand, and of the Holders, on the other hand, shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or such Guarantor, on the one
hand, or by the Holders, on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and judgments referred to above shall be
deemed to include, subject to the limitations set forth in Section 8(a), any
legal or other fees or expenses reasonably incurred by such party in connection
with investigating or defending any action or claim.
The Company, the Guarantors and each Holder agree that it would not be
just and equitable if contribution pursuant to this Section 8(d) were determined
by pro rata allocation (even if the Holders were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any matter, including any
action that could have given rise to such losses, claims, damages, liabilities
or judgments. Notwithstanding the provisions of this Section 8, no Holder, its
directors, its officers or any Person, if any, who controls such Holder shall be
required to contribute, in the aggregate, any amount in excess of the amount by
which the total received by such Holder with respect to the sale of Transfer
Restricted Securities pursuant to a Registration Statement exceeds (i) the
amount paid by such Holder for such Transfer Restricted Securities and (ii) the
amount of any damages which such Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Holders'
obligations to contribute pursuant to this Section 8(d) are several in
proportion to the respective principal amount of Transfer Restricted Securities
held by each Holder hereunder and not joint.
SECTION 9. RULE 144A AND RULE 144
The Company and each Guarantor agrees with each Holder, for so long as
any Transfer Restricted Securities remain outstanding and during any period in
which the Company or such Guarantor (i) is not subject to Section 13 or 15(d) of
the Exchange Act, to make available upon request of any Holder, to such Holder
or beneficial owner of Transfer Restricted Securities in connection with any
sale thereof and any prospective purchaser of such Transfer Restricted
Securities designated by such Holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Act in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144A, and (ii) is subject to
Section 13 or 15 (d) of the Exchange Act, to make all filings required thereby
in a timely manner in order to permit resales of such Transfer Restricted
Securities pursuant to Rule 144.
17
<PAGE>
SECTION 10. MISCELLANEOUS
(a) REMEDIES. The Company and the Guarantors acknowledge and agree
that any failure by the Company and/or the Guarantors to comply with their
respective obligations under Sections 3 and 4 hereof may result in material
irreparable injury to the Initial Purchasers or the Holders for which there is
no adequate remedy at law, that it will not be possible to measure damages for
such injuries precisely and that, in the event of any such failure, the Initial
Purchasers or any Holder may obtain such relief as may be required to
specifically enforce the Company's and the Guarantors' obligations under
Sections 3 and 4 hereof. The Company and the Guarantors further agree to waive
the defense in any action for specific performance that a remedy at law would be
adequate.
(b) NO INCONSISTENT AGREEMENTS. Neither the Company nor any
Guarantor will, on or after the date of this Agreement, enter into any agreement
with respect to its securities that is inconsistent with the rights granted to
the Holders in this Agreement or otherwise conflicts with the provisions hereof.
Neither the Company nor any Guarantor has previously entered into any agreement
granting any registration rights with respect to its securities to any Person.
The rights granted to the Holders hereunder do not in any way conflict with and
are not inconsistent with the rights granted to the holders of the Company's and
the Guarantors' securities under any agreement in effect on the date hereof.
(c) AMENDMENTS AND WAIVERS. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to or departures
from the provisions hereof may not be given unless (i) in the case of Section 5
hereof and this Section 10(c)(i), the Company has obtained the written consent
of Holders of all outstanding Transfer Restricted Securities and (ii) in the
case of all other provisions hereof, the Company has obtained the written
consent of Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities (excluding Transfer Restricted Securities held by the
Company or its Affiliates). Notwithstanding the foregoing, a waiver or consent
to departure from the provisions hereof that relates exclusively to the rights
of Holders whose Transfer Restricted Securities are being tendered pursuant to
the Exchange Offer, and that does not affect directly or indirectly the rights
of other Holders whose Transfer Restricted Securities are not being tendered
pursuant to such Exchange Offer, may be given by the Holders of a majority of
the outstanding principal amount of Transfer Restricted Securities subject to
such Exchange Offer.
(d) THIRD PARTY BENEFICIARY. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company and the
Guarantors, on the one hand, and the Initial Purchasers, on the other hand, and
shall have the right to enforce such agreements directly to the extent they may
deem such enforcement necessary or advisable to protect its rights or the rights
of Holders hereunder.
(e) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of the
Registrar under the Indenture, with a copy to the Registrar under the
Indenture; and
18
<PAGE>
(ii) if to the Company or the Guarantors:
Dura Operating Corp.
4508 IDS Center
Minneapolis, MN 55402
Telecopier No.: (612) 332-2012
Attention: Scott D. Rued
With a copy to:
Kirkland & Ellis
200 E. Randolph Drive
Chicago, IL 60601
Telecopier No.: (312) 861-2200
Attention: Dennis M. Myers
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next business day, if timely delivered
to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
Upon the date of filing of the Exchange Offer or a Shelf Registration
Statement, as the case may be, notice shall be delivered to the Initial
Purchasers in the form attached hereto as Exhibit A.
(f) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders; PROVIDED, that nothing herein shall be deemed to
permit any assignment, transfer or other disposition of Transfer Restricted
Securities in violation of the terms hereof or of the Purchase Agreement or the
Indenture. If any transferee of any Holder shall acquire Transfer Restricted
Securities in any manner, whether by operation of law or otherwise, such
Transfer Restricted Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Transfer Restricted Securities such
Person shall be conclusively deemed to have agreed to be bound by and to perform
all of the terms and provisions of this Agreement, including the restrictions on
resale set forth in this Agreement and, if applicable, the Purchase Agreement,
and such Person shall be entitled to receive the benefits hereof.
(g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
19
<PAGE>
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
(j) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
(k) ENTIRE AGREEMENT. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
20
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
DURA OPERATING CORP.
By: *
----------------------------------------
DURA AUTOMOTIVE SYSTEMS, INC.
By: *
----------------------------------------
DURA AUTOMOTIVE SYSTEMS, INC. COLUMN SHIFTER
OPERATIONS
By: *
----------------------------------------
DURA AUTOMOTIVE SYSTEMS CABLE OPERATIONS,
INC.
By: *
----------------------------------------
UNIVERSAL TOOL & STAMPING COMPANY INC.
By: *
----------------------------------------
ADWEST ELECTRONICS, INC.
By: *
----------------------------------------
ADWEST WESTERN AUTOMOTIVE, INC.
By: *
----------------------------------------
21
<PAGE>
X.E. CO.
By: *
----------------------------------------
EXCEL OF TENNESSEE L.P.
By: Excel Industries of Michigan, Inc.
Its: General Partner
By: *
----------------------------------------
EXCEL CORPORATION
By: *
----------------------------------------
EXCEL INDUSTRIES OF MICHIGAN, INC.
By: *
----------------------------------------
ANDERSON INDUSTRIES, INC.
By: *
----------------------------------------
ATWOOD INDUSTRIES, INC.
By: *
HYDRO FLAME CORPORATION
By: *
----------------------------------------
ATWOOD AUTOMOTIVE INC.
By: *
----------------------------------------
22
<PAGE>
MARK I MOLDED PLASTICS, INC.
By: *
----------------------------------------
MARK I MOLDED PLASTICS OF TENNESSEE, INC.
By: *
----------------------------------------
*/s/ David Bovee
- -------------------------
DAVID R. BOVEE, solely in his
capacity as attorney-in-fact pursuant
to power of attorney
23
<PAGE>
BANK OF AMERICA INTERNATIONAL
By: /s/ Stephen A. Fleming
-----------------------------------
Name: Stephen A. Fleming
Title: Managing Director
DONALDSON, LUFKIN & JENRETTE INTERNATIONAL
By: /s/ Michael Barnes
-----------------------------------
Name: Michael Barnes
Title: Vice President
24
<PAGE>
EXHIBIT A
NOTICE OF FILING OF
A/B EXCHANGE OFFER REGISTRATION STATEMENT
To: NationsBanc Montgomery Securities LLC
NationsBank Corporate Center
100 North Tryon Street
NC1-007-07-01
Charlotte, North Carolina 28255
Attention: Keith DeLeon (Legal Department)
Fax: (704) 386-6453
From: Dura Operating Corp.
9% Senior Subordinated Notes due 2009
Date: ___, 1999
For your information only (NO ACTION REQUIRED):
Today, ______, 1999, we filed [an Exchange Registration Statement/a Shelf
Registration Statement] with the Securities and Exchange Commission. We
currently expect this registration statement to be declared effective within
_____ business days of the date hereof.
25
<PAGE>
[LETTERHEAD]
August 9, 1999
Dura Operating Corp.
4508 IDS Center
Minneapolis, MN 55402
Re: Dura Operating Corp.
Registration Statement on Form S-4
Registration No. 333-81213
------------------------------
Ladies and Gentlemen:
We have acted as special counsel to Dura Operating Corp., a Delaware
corporation (the "Issuer"), and each of Dura Automotive Systems, Inc., Column
Shifter Operations, a Michigan corporation; Universal Tool & Stamping Company
Inc., an Indiana corporation; Dura Automotive Systems Cable Operations, Inc., a
Delaware corporation; Adwest Electronics, Inc., a Delaware corporation; Adwest
Western Automotive Inc., a Michigan corporation; X.E. Co., a Michigan
corporation; Dura Automotive Systems of Tennessee, L.P., a Tennessee limited
partnership; Dura Automotive Systems of Indiana, Inc., an Indiana corporation;
Anderson Industries, Inc., a Delaware corporation; Hydro Flame Corporation, a
Utah corporation; Atwood Industries, Inc., an Illinois corporation; Atwood
Automotive Inc., a Michigan corporation; Mark I Molded Plastics, Inc., a
Michigan corporation; and Mark I Molded Plastics of Tennessee, Inc., a Tennessee
corporation (collectively, the "Guarantors" and, together with the Issuer, the
"Registrants"), in connection with the proposed registration by the Issuer of up
to $300,000,000 in aggregate principal amount of the Issuer's 9% Senior
Subordinated Notes due 2009, Series B (the "Dollar Exchange Notes") and up to
[EURO] 100,000,000, in aggregate principal amount of the Issuer's 9% Senior
Subordinated Notes due 2009, Series B (the "Euro Exchange Notes" and, together
with the Dollar Exchange Notes, the "Exchange Notes"), pursuant to a
Registration Statement on Form S-4 (Registration No. 333-81213), originally
filed with the Securities and Exchange Commission on June 21, 1999, under the
Securities Act of 1933, as amended (the "Act") (such Registration Statement, as
amended or supplemented is hereinafter referred to as the "Registration
Statement").
<PAGE>
Dura Operating Corp.
August 9, 1999
Page 2
The obligations of the Issuer under the Exchange Notes will be
guaranteed by the Guarantors (the "Guarantees"). The Exchange Notes and the
Guarantees are to be issued pursuant to the Indentures (the "Indenture"), dated
as of April 22, 1999, by and among the Registrants and U.S. Bank Trust National
Association, as Trustee, in exchange for and in replacement of the Issuer's
outstanding 9% Senior Subordinated Notes due 2009 (the "Old Notes"). We have
been informed that $300,000,000 in aggregate principal amount of
dollar-denominated Old Notes and [EURO]100,000,000 in aggregate principal
amount of euro-denominated Old Notes were outstanding as of August 6, 1999.
In that connection, we have examined originals or copies certified or
otherwise identified to our satisfaction of such documents, corporate records
and other instruments as we have deemed necessary for the purposes of this
opinion, including (i) the certificate of incorporation, as amended, and the
bylaws, as amended, or limited partnership agreement, as applicable, of each of
the Registrants, (ii) minutes and records of the corporate or limited
partnership proceedings, as applicable, of the Registrants with respect to the
issuance of the Exchange Notes and the Guarantees, (iii) the Registration
Statement, (iv) the Registration Rights Agreement, dated as of April 22, 1999,
by and among the Registrants, NationsBanc Montgomery Securities LLC and
Donaldson, Lufkin & Jenrette Securities Corporation, and (iv) the Registration
Rights Agreement, dated as of April 22, 1999, by and among the Registrants, Bank
of America International Limited and Donaldson, Lufkin & Jenrette International.
For purposes of this opinion, we have assumed the authenticity of all
documents submitted to us as originals, the conformity to the originals of all
documents submitted to us as copies and the authenticity of the originals of all
documents submitted to us as copies. We have also assumed the genuineness of
the signatures of persons signing all documents in connection with which this
opinion is rendered, the authority of such persons signing on behalf of the
parties thereto other than the Registrants and the due authorization, execution
and delivery of all documents by the parties thereto other than the Registrants.
As to any facts material to the opinions expressed herein which we have not
independently established or verified, we have relied upon the statements and
representations of officers and other representatives of the Registrants and
others.
Our opinion expressed below is subject to the qualifications that we
express no opinion as to the applicability of, compliance with, or effect of (i)
any bankruptcy, insolvency, reorganization, fraudulent transfer, fraudulent
conveyance, moratorium or other similar law affecting the enforcement of
creditors' rights generally, (ii) general principle of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law), (iii)
public policy
<PAGE>
Dura Operating Corp.
August 9, 1999
Page 3
considerations which may limit the rights of parties to obtain certain remedies
and (iv) any laws except the laws of the State of New York, the General
Corporation Law of the State of Delaware and the federal laws of the United
States of America. We advise you that the issues addressed by this opinion may
be governed in whole or in part by other laws, and we express no opinion as to
whether any relevant difference exists between the laws upon which our opinion
is based and any other laws that may actually govern. We note that the
enforceability of the Guarantees may be governed in part by the laws of the
jurisdictions under which each of the Guarantors are formed. Because we are
not admitted to practice in each such jurisdiction, we have assumed for
purposes of our opinion that the laws of these jurisdictions with respect to
enforceability are not materially different than the laws of the State of New
York.
Based upon and subject to the assumptions, qualifications, exclusions
and other limitations contained in this letter, we are of the opinion that when
(i) the Registration Statement becomes effective, (ii) the Indentures have been
duly qualified under the Trust Indenture Act of 1939, as amended, (iii) the
Exchange Notes and the Guarantees have been duly executed and authenticated in
accordance with the provisions of the Indentures and duly delivered to the
purchasers thereof in exchange for the Old Notes, the Exchange Notes and the
Guarantees will be validly issued and binding obligations of the Registrants.
We hereby consent to the filing of this opinion with the Commission as
Exhibit 5.1 to the Registration Statement. We also consent to the reference to
our firm under the heading "Legal Matters" in the Registration Statement. In
giving this consent, we do not thereby admit that we are in the category of
persons whose consent is required under Section 7 of the Act or the rules and
regulations of the Commission.
This opinion is limited to the specific issues addressed herein, and
no opinion may be inferred or implied beyond that expressly stated herein. We
assume no obligation to revise or supplement this opinion should the present
laws of the States of New York or Delaware or the federal law of the United
States be changed by legislative action, judicial decision or otherwise.
This opinion is furnished to you in connection with the filing of the
Registration Statement and is not to be used, circulated, quoted or otherwise
relied upon for any other purpose.
Sincerely,
/s/ KIRKLAND & ELLIS
KIRKLAND & ELLIS
<PAGE>
[LETTERHEAD]
Exhibit 8.1
August 9, 1999
Dura Operating Corp.
4508 IDS Center
Minneapolis, MN 55402
Re: Dura Operating Corp.
Registration Statement on Form S-4
Registration No. 333-81213
--------------------------
Ladies and Gentlemen:
We are issuing this opinion letter in our capacity as special legal
counsel to Dura Operating Corp., a Delaware corporation (the "Issuer"), in
connection with the proposed offer by the Issuer (the "Exchange Offer") of up to
$550,000,000 in aggregate principal amount of the Issuer's 9% Series B Senior
Subordinated Notes due 2009 (the "Exchange Notes") in exchange for and in
replacement of the Issuer's outstanding 9% Senior Subordinated Notes due 2009
(the "Old Notes"), pursuant to a Registration Statement on Form S-4
(Registration No. 333-81213) originally filed with the Securities and Exchange
Commission (the "Commission") on June 21, 1999, under the Securities Act of
1933, as amended (the "Act") (such Registration Statement, as amended or
supplemented, is hereinafter referred to as the "Registration Statement").
You have requested our opinion as to certain United States federal
income tax consequences of the Exchange Offer. In preparing our opinion, we
have reviewed and relied upon the Issuer's Registration Statement and such other
documents as we have deemed necessary.
On the basis of the foregoing, it is our opinion that the exchange of
the Old Notes for the Exchange Notes pursuant to the Exchange Offer will not be
treated as an "exchange" for United States federal income tax purposes.
<PAGE>
Dura Operating Corp.
August 9, 1999
Page 2
The opinion set forth above is based upon the applicable provisions of
the Internal Revenue Code of 1986, as amended, the Treasury Regulations
promulgated or proposed thereunder, current positions of the Internal Revenue
Service (the "IRS") contained in published revenue rulings, revenue procedures
and announcements, existing judicial decisions and other applicable authorities.
No tax ruling has been sought from the IRS with respect to any of the matters
discussed herein. Unlike a ruling from the IRS, an opinion of counsel is not
binding on the IRS. Hence, no assurance can be given that the opinion stated in
this letter will not be successfully challenged by the IRS or by a court. We
express no opinion concerning any tax consequences of the Exchange Offer except
as expressly set forth above.
We hereby consent to the filing of this opinion as Exhibit 8.1 to
the Registration Statement. In giving this consent, we do not hereby admit
that we are in the category of persons whose consent is required under
Section 7 of the Act or the rules and regulations of the Commission
promulgated thereunder.
Sincerely,
/s/ KIRKLAND & ELLIS
Kirkland & Ellis
<PAGE>
EXHIBIT 12.1
DURA AUTOMOTIVE SYSTEMS, INC.
STATEMENT AND COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------------------------------------
1998
1994 1995 1996 1997 1998 PRO FORMA
--------- --------- --------- ------------ ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
EARNINGS:
Pre-tax income.................... $ 4,402 $12,738 $16,737 $28,312 $ 50,989 $ 73,209
Fixed charges..................... 3,773 5,229 3,597 10,528 27,447 98,634
Less: Preferred stock dividends.. - - - - (3,234) (4,144)
Less: Capitalized interest....... - - - - (262) (262)
--------- --------- --------- ------------ ----------- ----------
Net fixed charges.............. 3,773 5,229 3,597 10,528 23,951 94,228
--------- --------- --------- ------------ ----------- ----------
EARNINGS.......................... $ 8,175 $17,967 $20,334 $38,840 $ 74,940 $167,437
--------- --------- --------- ------------ ----------- ----------
--------- --------- --------- ------------ ----------- ----------
FIXED CHARGES:
Interest expense.................. $ 3,473 $ 4,822 $ 2,837 $ 9,330 $ 21,376 $ 90,066
Preferred stock dividends......... - - - - 3,234 4,144
Capitalized interest.............. - - - - 262 262
Amortization of debt costs........ - - 252 329 865 1,100
Interest factor of rental expense. 300 407 508 869 1,710 3,062
--------- --------- --------- ------------ ----------- ----------
TOTAL FIXED CHARGES............... $ 3,773 $ 5,229 $ 3,597 $10,528 $ 27,447 $ 98,634
--------- --------- --------- ------------ ----------- ----------
--------- --------- --------- ------------ ----------- ----------
RATIO OF EARNINGS TO FIXED CHARGES 2.2 3.4 5.7 3.7 2.7 1.7
--------- --------- --------- ------------ ----------- ----------
--------- --------- --------- ------------ ----------- ----------
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
--------------------------------------
1999
1998 1999 PRO FORMA
----------- ------------ -----------
<S> <C> <C> <C>
EARNINGS:
Pre-tax income.................... $ 7,926 $19,005 $ 26,469
Fixed charges..................... 3,364 8,559 25,955
Less: Preferred stock dividends.. (127) (1,018) (1,018)
Less: Capitalized interest....... - - -
----------- ----------- -----------
Net fixed charges.............. 3,237 7,541 24,937
----------- ----------- -----------
EARNINGS.......................... $11,163 $26,546 $ 51,406
----------- ----------- -----------
----------- ----------- -----------
FIXED CHARGES:
Interest expense.................. $ 2,938 $ 6,895 $ 23,896
Preferred stock dividends......... 127 1,018 1,018
Capitalized interest.............. - - -
Amortization of debt costs........ 82 216 275
Interest factor of rental expense. 217 430 766
----------- ----------- -----------
----------- ----------- -----------
TOTAL FIXED CHARGES............... $ 3,364 $ 8,559 $ 25,955
----------- ----------- -----------
----------- ----------- -----------
RATIO OF EARNINGS TO FIXED CHARGES 3.3 3.1 2.0
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
<PAGE>
LIST OF SUBSIDIARIES
Set forth below is a list of all of the subsidiaries of Dura Automotive
Systems, Inc. Unless otherwise indicated, all of the subsidiaries are wholly
owned. If indented, the company is a subsidiary of the company under which
it is listed.
<TABLE>
<CAPTION>
JURISDICTION OF
NAME FORMATION
- ----------------------------------------------------------------- -----------------
<S> <C>
Dura Operating Corp.............................................. Delaware
X.E. Co....................................................... Michigan
Dura Automotive Systems of Tennessee L.P.(1)............... Tennessee
Dura Automotive Systems of Indiana, Inc....................... Indiana
Anderson Industries, Inc...................................... Delaware
Autopartes Excel de Mexico S.A. de C.V.(2)................. Mexico
Atwood Automotive, Inc..................................... Michigan
Atwood Industries, Inc..................................... Illinois
Mark I Molded Plastics, Inc............................. Michigan
Mark I Molded Plastics of Tennessee, Inc................ Tennessee
Hydro Flame Corporation................................. Utah
Excel Global, Inc............................................. Barbados
Thixotech Inc.(3)............................................. Canada
Excel Industries Germany GmbH................................. Germany
Schade GmbH & Co. KG(4).................................... Germany
Schade Plettenberg Leisten und Blenden GmbH............. Germany
Schade Selbecke Leisten und Blenden GmbH................ Germany
Schade Herne Karosserle GmbH............................ Germany
Schade Plettenberg Glasmodule GmbH...................... Germany
Schade Plettenberg Kunststoffteile GmbH................. Germany
Schade Plettenberg Werkzeugbau Werksehaltung GmbH....... Germany
Schade Plettenberg Entwicktungs und Vertriebs GmbH...... Germany
Schade Handels-und Beteiligumgs GmbH.................... Germany
Schade GmbH Projektges............................... Germany
Schade s.r.o......................................... Czech Republic
S-G, Ges. s.r.o...................................... Czech Republic
Schade Deco-Systems GmbH............................. Germany
Schade UK Ltd........................................ UK
Schade Automocion S.A................................ Spain
Schade Portuguesa Lda................................ Portugal
Schade Design Automotiv Engineering GmbH(5).......... Germany
Schade Geschaftsfuhrungesellschaft mbH..................... Germany
Dura/Excel do Brasil LTDA..................................... Brazil
Pollone S.A. Industria E Comercio(6)....................... Brazil
<PAGE>
JURISDICTION OF
NAME FORMATION
- ----------------------------------------------------------------- -----------------
<S> <C>
Dura Asia-Pacific Pty LTD..................................... Australia
Dura UK Limited............................................... UK
Dura Automotive Acquisition Limited........................ UK
Dura Automotive Ltd. UK
Rearsby Group Ltd.................................... UK
Adwest Driver Systems Ltd......................... UK
Adwest Bowden TSK Ltd(7)............................. UK
Adwest Steering Ltd.................................. UK
Adwest International Ltd............................. UK
Adwest Heidemann do Brasil(8)..................... Brazil
Adwest Electronics Inc............................ Delaware
Adwest Western Automotive Inc.................. Michigan
Adwest Horndraulic Australia...................... Australia
Adwest Heidemann Iberica SA....................... Spain
Adwest France SA.................................. France
Adwest Bowden France SA........................ France
Systeco SA..................................... France
Sermeca SA.................................. France
Adwest OCI SA............................... France
Adwest Dauphinoise Thomson SA.................. France
Adwest (Germany) Autoteile GmbH................... Germany
Adwest Heidemann Gruppe GmbH & Co KG........... Germany
HGV Heidemann Grundstuckverwaltung GmbH..... Germany
Adwest Heidemann Einbeck GmbH............... Germany
Adwest Heidemann Rotenberg GmbH.......... Germany
Adwest Kohler GmbH....................... Germany
Heidemann Oberflachentechnik GmbH........ Germany
Adwest Properties Ltd................................ UK
Adwest Western Thomson Ltd........................... UK
Western Thomson India(9).......................... India
Trident Automotive plc..................................... UK
Spicebright Limited..................................... UK
Moblan Investments, B.V.............................. The Netherlands
Dura Holdings France S.A.......................... France
Dura Automotive Systems France, S.A............ France
Dura Automotive Systemes S.A................... France
ANR S.A.(10)................................ France
Dura Holding Brasil Ltda.......................... Brazil
Industrias e Metalurgica Liebau................ Brazil
Dura Automotive Systems Cable Operations Canada,
Inc............................................. Ontario, Canada
Dura Automotive Systems Cable Operations, Inc.. Delaware
-2-
<PAGE>
JURISDICTION OF
NAME FORMATION
- ----------------------------------------------------------------- -----------------
<S> <C>
Trident Automotive Limited.................. Ontario, Canada
Trident Automotive L.P. (11)................ Delaware
Trident Automotive Canada Co............. Nova Scotia
Trident Automotive L.L.C................. Delaware
Dura Automotive Systems Limited......................... UK
Dura Automotive Systems, Inc., Column Shifter Operations...... Michigan
Dura Automotive Systems (Canada) Ltd.................... Ontario, Canada
Universal Tool & Stamping Company, Inc........................ Indiana
DURA Automotive Systems (Europe) GmbH......................... Germany
DURA Deutschland GmbH...................................... Germany
Trident Automotive Germany GmbH......................... Germany
Dura Automotive Systems (espana) S.A....................... Spain
Dura de Mexico, S.A. de C.V................................... Mexico
Dura Automotive Systems Export, Inc........................... Barbados
</TABLE>
(1) X.E. Co. owns 99% of the limited partnership interest and Dura
Operating Corp. owns a 1% general partnership interest.
(2) Atwood Industries, Inc. owns 99% and Atwood Automotive, Inc. owns 1% of
the outstanding equity interests.
(3) 19% owned by Dura Operating Corp.
(4) 70% owned by Excel Industries Germany GmbH.
(5) 22.5% owned by Schade Handels-und Beteiligumgs GmbH
(6) 51% owned by Dura/Excel do Brasil LTDA.
(7) 65% owned by Dura Automotive Ltd.
(8) 95% owned by Adwest International Ltd and 5% owned by Adwest Automotive
plc.
(9) 49% owned by Adwest Western Thomson Ltd.
(10) 19% owned by Dura Automotive Systemes S.A.
(11) Dura Automotive Systems Cable Operations Canada, Inc. owns 99% of the
limited partnership interest and Trident Automotive Limited owns the 1%
general partnership interest.
-3-
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
reports and to all references to our Firm included in or made a part of this
registration statement.
ARTHUR ANDERSEN LLP
Minneapolis, Minnesota,
August 5, 1999
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
reports and to all references to our Firm included in or made a part of this
registration statement.
ARTHUR ANDERSEN LLP
Grand Rapids, Michigan,
August 5, 1999
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
reports and to all references to our Firm included in or made a part of this
registration statement.
ARTHUR ANDERSEN LLP
Stamford, Connnecticut,
August 5, 1999
<PAGE>
EXHIBIT 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in the registration statement on Form S-4 dated
August 9, 1999 of Dura Automotive Systems, Inc. of our report dated 7 September
1998, in respect of the consolidated balance sheets of Adwest Automotive Plc and
its subsidiaries at 30 June 1998 and 30 June 1997, and the related consolidated
profit and loss accounts, reconciliations of movements in shareholders' funds
and consolidated cash flow statements for each of the years in the three year
period ended 30 June 1998 and to the reference to our firm under the heading
"Experts" in the Form S-4 dated August 9, 1999.
KPMG Audit Plc
August 6, 1999
<PAGE>
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
U.S. BANK TRUST NATIONAL ASSOCIATION
(Exact name of Trustee as specified in its charter)
United States 41-0257700
(State of Incorporation) (I.R.S. Employer
Identification No.)
U.S. Bank Trust Center
180 East Fifth Street
St. Paul, Minnesota 55101
(Address of Principal Executive Offices) (Zip Code)
DURA AUTOMOTIVE SYSTEMS, INC.*
(Exact name of Registrant as specified in its charter)
Delaware 38-3185711
(State of Incorporation) (I.R.S. Employer
Identification No.)
DURA OPERATING CORP.*
(Exact name of Registrant as specified in its charter)
Delaware 38-2961431
(State of Incorporation) (I.R.S. Employer
Identification No.)
4508 IDS Center
Minneapolis, Minnesota 55402
(Address of Principal Executive Offices) (Zip Code)
9% SENIOR SUBORDINATED NOTES DUE 2009
(Title of the Indenture Securities)
<PAGE>
GENERAL
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
2. AFFILIATIONS WITH OBLIGOR AND UNDERWRITERS If the obligor or any
underwriter for the obligor is an affiliate of the Trustee, describe each
such affiliation.
None
See Note following Item 16.
Items 3-15 are not applicable because to the best of the Trustee's
knowledge the obligor is not in default under any Indenture for which the
Trustee acts as Trustee.
16. LIST OF EXHIBITS List below all exhibits filed as a part of this
statement of eligibility and qualification.
1. Copy of Articles of Association.*
2. Copy of Certificate of Authority to Commence Business.*
3. Authorization of the Trustee to exercise corporate trust powers
(included in Exhibits 1 and 2; no separate instrument).*
4. Copy of existing By-Laws.*
5. Copy of each Indenture referred to in Item 4. N/A.
6. The consents of the Trustee required by Section 321(b) of the act.
7. Copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or examining
authority is incorporated by reference to Registration Number 333-70709.
* Incorporated by reference to Registration Number 22-27000.
<PAGE>
NOTE
The answers to this statement insofar as such answers relate to what
persons have been underwriters for any securities of the obligors within three
years prior to the date of filing this statement, or what persons are owners of
10% or more of the voting securities of the obligors, or affiliates, are based
upon information furnished to the Trustee by the obligors. While the Trustee
has no reason to doubt the accuracy of any such information, it cannot accept
any responsibility therefor.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, U.S. Bank Trust National Association, an Association organized and
existing under the laws of the United States, has duly caused this statement of
eligibility and qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, and its seal to be hereunto affixed and attested, all
in the City of Saint Paul and State of Minnesota on the 3rd day of August, 1999.
U.S. BANK TRUST NATIONAL ASSOCIATION
/s/ Laurie Howard
--------------------
Laurie Howard
Vice President
/s/ Gloria Kessler
- --------------------
Gloria Kessler
Assistant Secretary
<PAGE>
EXHIBIT 6
CONSENT
In accordance with Section 321(b) of the Trust Indenture Act of 1939, the
undersigned, U.S. BANK TRUST NATIONAL ASSOCIATION hereby consents that reports
of examination of the undersigned by Federal, State, Territorial or District
authorities may be furnished by such authorities to the Securities and Exchange
Commission upon its request therefor.
Dated: August 3, 1999
U.S. BANK TRUST NATIONAL ASSOCIATION
/s/ Laurie Howard
---------------------
Laurie Howard
Vice President
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER FOR EXCHANGE
9% SENIOR SUBORDINATED NOTES DUE 2009
OF
DURA OPERATING CORP.
PURSUANT TO THE PROSPECTUS DATED AUGUST 9, 1999
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON SEPTEMBER 8, 1999 UNLESS EXTENDED (THE EXPIRATION DATE).
- --------------------------------------------------------------------------------
PLEASE READ CAREFULLY THE ATTACHED INSTRUCTIONS
If you desire to accept the Exchange Offer, this Letter of Transmittal should be
completed, signed and submitted to the Exchange Agent:
<TABLE>
<S> <C>
BY MAIL: OVERNIGHT COURIER:
U.S. Bank Trust National Association U.S. Bank Trust National Association
180 E. 5(th) Street 180 E. 5(th) Street
St. Paul, Minnesota 55101 St. Paul, Minnesota 55101
Attention: Specialized Finance Department Attention: Specialized Finance Department
BY HAND: FACSIMILE TRANSMISSION:
U.S. Bank Trust National Association (651) 244-1537
180 E. 5(th) Street CONFIRM BY TELEPHONE:
St. Paul, Minnesota 55101 (651) 244-1572
Attention: Specialized Finance Department
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OR FACSIMILE NUMBER
OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
FOR ANY QUESTIONS REGARDING THIS LETTER OF TRANSMITTAL OR FOR ANY ADDITIONAL
INFORMATION, YOU MAY CONTACT THE EXCHANGE AGENT BY TELEPHONE AT (651) 244-1572,
OR BY FACSIMILE AT (651) 244-1537.
The undersigned hereby acknowledges receipt of the Prospectus dated August
9, 1999 (the "Prospectus") of Dura Operating Corp., a Delaware corporation
("Company"), and this Letter of Transmittal (the "Letter of Transmittal"), that
together constitute the Company's offer (the "Exchange Offer") to exchange: (i)
$1,000 in principal amount of its Series B 9% Senior Subordinated Notes due 2009
(the "Dollar Exchange Notes"), which have been registered under the Securities
Act of 1933, as amended (the "Securities Act"), pursuant to a Registration
Statement, for each $1,000 in principal amount of its outstanding 9% Senior
Subordinated Notes due 2009 (the "Old Dollar Notes"); and (ii) [EURO]1,000 in
principal amount of its Series B 9% Senior Subordinated Notes due 2009 (the
"Euro Exchange Notes" and, together with the Dollar Exchange Notes, the
"Exchange Notes"), which have been registered under the Securities, pursuant to
a Registration Statement, for each [EURO]1,000 in principal amount of its
outstanding 9% Senior Subordinated Notes due 2009 (the "Old Euro Notes" and,
together with the Old Dollar Notes, the "Notes") . Capitalized terms used but
not defined herein have the meanings ascribed to them in the Prospectus.
The undersigned hereby tenders the Notes described in Box 1 below (the
"Tendered Notes") pursuant to the terms and conditions described in the
Prospectus and this Letter of Transmittal. The undersigned is the registered
owner of all the Tendered Notes and the undersigned represents that it has
received from each beneficial owner of the Tendered Notes ("Beneficial Owners")
a duly completed and executed form of "INSTRUCTION TO REGISTERED HOLDER AND/OR
BOOK-ENTRY TRANSFER FACILITY PARTICIPANT FROM BENEFICIAL OWNER" accompanying
this Letter of Transmittal, instructing the undersigned to take the action
described in this Letter of Transmittal.
Subject to, and effective upon, the acceptance for exchange of the Tendered
Notes, the undersigned hereby exchanges, assigns and transfers to, or upon the
order of, the Company all right, title, and interest in, to and under the
Tendered Notes.
Please issue the Exchange Notes exchanged for Tendered Notes in the name(s)
of the undersigned. Similarly, unless otherwise indicated under "SPECIAL
DELIVERY INSTRUCTIONS" below (Box 3), please send or cause to be sent the
<PAGE>
certificates for the Exchange Notes (and accompanying documents, as appropriate)
to the undersigned at the address shown below in Box 1.
The undersigned hereby irrevocably constitutes and appoints the Exchange
Agent as the true and lawful agent and attorney in fact of the undersigned with
respect to the Tendered Notes, with full power of substitution (such power of
attorney being deemed to be an irrevocable power coupled with an interest), to
(i) deliver the Tendered Notes to the Company or cause ownership of the Tendered
Notes to be transferred to, or upon the order of, the Company, on the books of
the registrar for the Notes and deliver all accompanying evidences of transfer
and authenticity to, or upon the order of, the Company upon receipt by the
Exchange Agent, as the undersigned's agent, of the Exchange Notes to which the
undersigned is entitled upon acceptance by the Company of the Tendered Notes
pursuant to the Exchange Offer, and (ii) receive all benefits and otherwise
exercise all rights of beneficial ownership of the Tendered Notes, all in
accordance with the terms of the Exchange Offer.
The undersigned understands that tenders of Notes pursuant to the procedures
described under the caption "The Exchange Offer" 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, subject only to withdrawal of such tenders on the terms set forth in the
Prospectus under the caption "The Exchange Offer-- Procedures for
Tendering--Withdrawal of Tenders of Notes Deposited with DTC." All authority
herein conferred or agreed to be conferred shall survive the death or incapacity
of the undersigned and any Beneficial Owner(s), and every obligation of the
undersigned or any Beneficial Owner(s) hereunder shall be binding upon the
heirs, representatives, successors, and assigns of the undersigned and such
Beneficial Owner(s).
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, exchange, assign, and transfer the Tendered Notes
and that the Company will acquire good and unencumbered title thereto, free and
clear of all liens, restrictions, charges, encumbrances, and adverse claims when
the Tendered Notes are acquired by the Company as contemplated herein. The
undersigned and each Beneficial Owner will, upon request, execute and deliver
any additional documents reasonably requested by the Company or the Exchange
Agent as necessary or desirable to complete and give effect to the transactions
contemplated hereby.
The undersigned hereby represents and warrants that the information set
forth in Box 2 is true and correct.
By accepting the Exchange Offer, the undersigned hereby represents and
warrants that (i) the Exchange Notes to be acquired by the undersigned and any
Beneficial Owner(s) in connection with the Exchange Offer are being acquired by
the undersigned and any Beneficial Owner(s) in the ordinary course of business
of the undersigned and any Beneficial Owner(s), (ii) the undersigned and each
Beneficial Owner are not participating, do not intend to participate, and have
no arrangement or understanding with any person to participate, in the
distribution of the Exchange Notes, (iii) except as otherwise disclosed in
writing herewith, neither the undersigned nor any Beneficial Owner is an
"affiliate," as defined in Rule 405 under the Securities Act, of the Company,
and (iv) the undersigned and each Beneficial Owner acknowledge and agree that
any person participating in the Exchange Offer with the intention or for the
purpose of distributing the Exchange Notes must comply with the registration and
prospectus delivery requirements of the Securities Act of 1933, as amended
(together with the rules and regulations promulgated thereunder, the "Securities
Act"), in connection with a secondary resale of the Exchange Notes acquired by
such person and cannot rely on the position of the Staff of the Securities and
Exchange Commission (the "Commission") set forth in the no-action letters that
are discussed in the section of the Prospectus entitled "The Exchange Offer." In
addition, by accepting the Exchange Offer, the undersigned hereby (i) represents
and warrants that, if the undersigned or any Beneficial Owner of the Notes is a
Participating Broker-Dealer, such Participating Broker-Dealer acquired the Notes
for its own account as a result of market-making activities or other trading
activities and has not entered into any arrangement or understanding with the
Company or any "affiliate" of the Company (within the meaning of Rule 405 under
the Securities Act) to distribute the Exchange Notes to be received in the
Exchange Offer, and (ii) acknowledges that, by receiving Exchange Notes for its
own account in exchange for Notes, where such Notes were acquired as a result of
market-making activities or other trading activities, such Participating
Broker-Dealer will deliver a prospectus meeting the requirements of the
Securities Act in connection with any resale of such Exchange Notes.
<PAGE>
/ / CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED HEREWITH.
/ / CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY DELIVERED TO THE EXCHANGE AGENT AND COMPLETE
"USE OF GUARANTEED DELIVERY" BELOW (Box 4).
/ / CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE BOOK-ENTRY
TRANSFER FACILITY AND COMPLETE "USE OF BOOK-ENTRY TRANSFER" BELOW (Box 5).
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING THE BOXES
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
BOX 1
DESCRIPTION OF NOTES TENDERED
(ATTACH ADDITIONAL SIGNED PAGES, IF NECESSARY)
- ---------------------------------------------------------------------------------------------------
AGGREGATE
NAME(S) AND ADDRESS(ES) OF REGISTERED NOTE PRINCIPAL AGGREGATE
HOLDER(S), EXACTLY AS NAME(S) APPEAR(S) ON NOTE CERTIFICATE AMOUNT PRINCIPAL
CERTIFICATE(S) NUMBER(S) OF REPRESENTED BY AMOUNT
(PLEASE FILL IN, IF BLANK) NOTES* CERTIFICATE(S) TENDERED**
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
TOTAL
- ---------------------------------------------------------------------------------------------------
* Need not be completed by persons tendering by book-entry transfer.
** The minimum permitted tender is $1,000, in the case of Old Dollar Notes, or [EURO]1,000, in the
case of Old Euro Notes, in principal amount of Notes. All other tenders must be in integral
multiples of $1,000 or [EURO]1,000, as the case may be, of principal amount. Unless otherwise
indicated in this column, the principal amount of all Note Certificates identified in this Box
1 or delivered to the Exchange Agent herewith shall be deemed tendered. See Instruction 4.
- ---------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
- -------------------------------------------------
BOX 2
BENEFICIAL OWNER(S)
- -------------------------------------------------
STATE OF PRINCIPAL RESIDENCE OF EACH PRINCIPAL AMOUNT OF TENDERED NOTES
BENEFICIAL OWNER OF TENDERED NOTES HELD FOR ACCOUNT OF BENEFICIAL OWNER
- --------------------------------------------------
- --------------------------------------------------
- --------------------------------------------------
- --------------------------------------------------
- --------------------------------------------------
- --------------------------------------------------
- --------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
BOX 3
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 5, 6 AND 7)
TO BE COMPLETED ONLY IF EXCHANGE NOTES EXCHANGED FOR NOTES AND UNTENDERED
NOTES ARE TO BE SENT TO SOMEONE OTHER THAN THE UNDERSIGNED, OR TO THE
UNDERSIGNED AT AN ADDRESS OTHER THAN THAT SHOWN ABOVE.
Mail Exchange Note(s) and any untendered Notes to:
Name(s):
____________________________________________________________________________
(PLEASE PRINT)
Address:
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
Tax Identification or
Social Security No.:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BOX 4
USE OF GUARANTEED DELIVERY
(SEE INSTRUCTION 2)
TO BE COMPLETED ONLY IF NOTES ARE BEING TENDERED BY MEANS OF A NOTICE OF
GUARANTEED DELIVERY.
Name(s) of Registered Holder(s):
____________________________________________________________________________
Date of Execution of Notice of Guaranteed Delivery: ________________________
Name of Institution which Guaranteed Delivery: _____________________________
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
BOX 5
USE OF BOOK-ENTRY TRANSFER
(SEE INSTRUCTION 1)
TO BE COMPLETED ONLY IF DELIVERY OF TENDERED NOTES IS TO BE MADE BY BOOK-
ENTRY TRANSFER.
Name of Tendering Institution: _____________________________________________
Account Number: ____________________________________________________________
Transaction Code Number: ___________________________________________________
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
- ------------------------------------------------
BOX 6
TENDERING HOLDER SIGNATURE
(SEE INSTRUCTIONS 1 AND 5)
IN ADDITION, COMPLETE SUBSTITUTE FORM W-9
- ------------------------------------------------
X Signature Guarantee
X (If required by Instruction 5)
(SIGNATURE OF REGISTERED HOLDER(S) Authorized Signature
OR AUTHORIZED SIGNATORY)
Note: The above lines must be signed by the X
registered holder(s) of Notes as their name(s) Name:
appear(s) on the Notes or by persons(s) (PLEASE PRINT)
authorized to become registered holder(s) Title:
(evidence of such authorization must be Name of Firm:
transmitted with this Letter of Transmittal). If (MUST BE AN ELIGIBLE INSTITUTION AS
signature is by a trustee, executor, DEFINED IN INSTRUCTION 2)
administrator, guardian, attorney-in-fact,
officer, or other person acting in a fiduciary
or representative capacity, such person must set
forth his or her full title below. See
Instruction 5.
Name(s): Address:
Capacity: (INCLUDE ZIP CODE)
Area Code and Telephone Number:
Street Address:
Dated:
(INCLUDE ZIP CODE)
Area Code and Telephone Number:
Tax Identification or Social Security Number:
- ------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
BOX 7
BROKER-DEALER STATUS
----------------------------------------------------------------------------
/ / Check this box if the Beneficial Owner of the Notes is a Participating
Broker-Dealer and such Participating Broker-Dealer acquired the Notes
for its own account as a result of market-making activities or other
trading activities. IF THIS BOX IS CHECKED, PLEASE SEND A COPY OF THIS
LETTER OF TRANSMITTAL TO DURA OPERATING CORP., ATTENTION CHIEF
FINANCIAL OFFICER, FACSIMILE (248) 299-7518.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------
PAYORS' NAMES: DURA OPERATING CORP.
- ------------------------------------------------------------------------------------------------
Name (if joint names, list first and circle the name of the person or entity
whose number you enter in Part 1 below. See instructions if your name has
changed.)
- ------------------------------------------------------------------------------------------------
Address
- ------------------------------------------------------------------------------------------------
SUBSTITUTE City, State and ZIP Code
- ------------------------------------------------------------------------------------------------
FORM W-9 List account number(s) here (optional)
- ------------------------------------------------------------------------------------------------
Department of the PART 1--PLEASE PROVIDE YOUR TAXPAYER IDENTIFICATION Social Security Number
Treasury NUMBER ("TIN") IN THE BOX AT RIGHT AND CERTIFY BY or TIN
Internal Revenue SIGNING AND DATING BELOW
Service
- ------------------------------------------------------------------------------------------------
PART 2--Check the box if you are NOT subject to backup withholding under the
provisions of section 3406(a)(1)(C) of the Internal Revenue Code because (1)
you have not been notified that you are subject to backup withholding as a
result of failure to report all interest or dividends or (2) the Internal
Revenue Service has notified you that you are no longer subject to backup
withholding. / /
- ------------------------------------------------------------------------------------------------
CERTIFICATION--UNDER THE PENALTIES OF PERJURY, I PART 3--
CERTIFY THAT THE INFORMATION PROVIDED ON THIS FORM IS Awaiting TIN / /
TRUE, CORRECT AND COMPLETE.
SIGNATURE DATE
- ------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE EXCHANGE OFFER. PLEASE
REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
<PAGE>
DURA OPERATING CORP.
INSTRUCTIONS TO LETTER OF TRANSMITTAL
FORMING PART OF THE TERMS AND CONDITIONS
OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND NOTES. A properly completed
and duly executed copy of this Letter of Transmittal, including Substitute Form
W-9, and any other documents required by this Letter of Transmittal must be
received by the Exchange Agent at its address set forth herein, and either
certificates for Tendered Notes must be received by the Exchange Agent at its
address set forth herein or such Tendered Notes must be transferred pursuant to
the procedures for book-entry transfer described in the Prospectus under the
caption "EXCHANGE OFFER--PROCEDURES FOR TENDERING OUTSTANDING NOTES DEPOSITED
WITH DTC" (and a confirmation of such transfer received by the Exchange Agent),
in each case prior to 5:00 p.m., New York City time, on the Expiration Date. The
method of delivery of certificates for Tendered Notes, this Letter of
Transmittal and all other required documents to the Exchange Agent is at the
election and risk of the tendering 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.
Instead of delivery by mail, it is recommended that the Holder use an overnight
or hand delivery service. In all cases, sufficient time should be allowed to
assure timely delivery. No Letter of Transmittal or Notes should be sent to the
Company. Neither the Company nor the registrar is under any obligation to notify
any tendering holder of the Company's acceptance of Tendered Notes prior to the
closing of the Exchange Offer.
2. GUARANTEED DELIVERY PROCEDURES. Holders who wish to tender their Notes
but whose Notes are not immediately available, and who cannot deliver their
Notes, this Letter of Transmittal or any other documents required hereby to the
Exchange Agent prior to the Expiration Date must tender their Notes according to
the guaranteed delivery procedures set forth below, including completion of Box
4. Pursuant to such procedures: (i) such tender must be made by or through a
firm which is a member of a recognized Medallion Program approved by the
Securities Transfer Association Inc. (an "Eligible Institution") and the Notice
of Guaranteed Delivery must be signed by the holder; (ii) prior to the
Expiration Date, the Exchange Agent must have received from the holder and the
Eligible Institution a properly completed and duly executed Notice of Guaranteed
Delivery (by mail, hand delivery or facsimile transmission) setting forth the
name and address of the holder, the certificate number(s) of the Tendered Notes
and the principal amount of Tendered Notes, stating that the tender is being
made thereby and guaranteeing that, within five New York Stock Exchange trading
days after the Expiration Date, this Letter of Transmittal together with the
certificate(s) representing the Notes and any other required documents will be
deposited by the Eligible Institution with the Exchange Agent; and (iii) such
properly completed and executed Letter of Transmittal, as well as all other
documents required by this Letter of Transmittal and the certificate(s)
representing all Tendered Notes in proper form for transfer, must be received by
the Exchange Agent within five New York Stock Exchange trading days after the
Expiration Date. Any holder who wishes to tender Notes pursuant to the
guaranteed delivery procedures described above must ensure that the Exchange
Agent receives the Notice of Guaranteed Delivery relating to such Notes prior to
5:00 p.m., New York City time, on the Expiration Date. Failure to complete the
guaranteed delivery procedures outlined above will not, of itself, affect the
validity or effect a revocation of any Letter of Transmittal form properly
completed and executed by an Eligible Holder who attempted to use the guaranteed
delivery process.
3. BENEFICIAL OWNER INSTRUCTIONS TO REGISTERED HOLDERS. Only a holder in
whose name Tendered Notes are registered on the books of the registrar (or the
legal representative or attorney-in-fact of such registered holder) may execute
and deliver this Letter of Transmittal. Any Beneficial Owner of Tendered Notes
who is not the registered holder must arrange promptly with the registered
holder to execute and deliver this Letter of Transmittal on his or her behalf
through the execution and delivery to the registered holder of the INSTRUCTIONS
TO REGISTERED HOLDER AND/OR BOOK-ENTRY TRANSFER FACILITY PARTICIPANT FROM
BENEFICIAL OWNER form accompanying this Letter of Transmittal.
4. PARTIAL TENDERS. Tenders of Notes will be accepted only in integral
multiples of $1,000, in the case of Old Dollar Notes, and [EURO]1,000, in the
case of Old Euro Notes, in principal amount. If less than the entire principal
amount of Notes held by the holder is tendered, the tendering holder should fill
in the principal amount tendered in the column labeled "Aggregate Principal
Amount Tendered" of the box entitled "Description of Notes Tendered" (Box 1)
above. The entire principal amount of Notes delivered to the Exchange Agent will
be deemed to have been tendered unless otherwise indicated. If the entire
principal amount of all Notes held by the holder is not tendered, then Notes for
the principal amount of Notes not tendered and Exchange Notes issued in exchange
for any Notes tendered and accepted will be sent to the Holder at his or her
registered address, unless a different address is provided in the appropriate
box on this Letter of Transmittal, as soon as practicable following the
Expiration Date.
5. SIGNATURES ON THE LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS;
GUARANTEE OF SIGNATURES. If this Letter of Transmittal is signed by the
registered holder(s) of the Tendered Notes, the signature must correspond with
the name(s) as written on the face of the Tendered Notes without alteration,
enlargement or any change whatsoever.
<PAGE>
If any of the Tendered Notes are owned of record by two or more joint
owners, all such owners must sign this Letter of Transmittal. If any Tendered
Notes are held in different names, it will be necessary to complete, sign and
submit as many separate copies of the Letter of Transmittal as there are
different names in which Tendered Notes are held.
If this Letter of Transmittal is signed by the registered holder(s) of
Tendered Notes, and Exchange Notes issued in exchange therefor are to be issued
(and any untendered principal amount of Notes is to be reissued) in the name of
the registered holder(s), then such registered holder(s) need not and should not
endorse any Tendered Notes, nor provide a separate bond power. In any other
case, such registered holder(s) must either properly endorse the Tendered Notes
or transmit a properly completed separate bond power with this Letter of
Transmittal, with the signature(s) on the endorsement or bond power guaranteed
by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of any Tendered Notes, such Tendered Notes must be endorsed
or accompanied by appropriate bond powers, in each case, signed as the name(s)
of the registered holder(s) appear(s) on the Tendered Notes, with the
signature(s) on the endorsement or bond power guaranteed by an Eligible
Institution.
If this Letter of Transmittal or any Tendered Notes or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations, or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing and, unless waived by the
Company, evidence satisfactory to the Company of their authority to so act must
be submitted with this Letter of Transmittal.
Endorsements on Tendered Notes or signatures on bond powers required by this
Instruction 5 must be guaranteed by an Eligible Institution.
Signatures on this Letter of Transmittal must be guaranteed by an Eligible
Institution unless the Tendered Notes are tendered (i) by a registered holder
who has not completed the box set forth herein entitled "Special Delivery
Instructions" (Box 3) or (ii) by an Eligible Institution.
6. SPECIAL DELIVERY INSTRUCTIONS. Tendering holders should indicate, in
the applicable box (Box 3), the name and address to which the Exchange Notes
and/or substitute Notes for principal amounts not tendered or not accepted for
exchange are to be 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 Tendered Notes pursuant to the Exchange Offer. If,
however, a transfer tax is imposed for any reason other than the transfer and
exchange of Tendered Notes pursuant to the Exchange Offer, then the amount of
any such transfer taxes (whether imposed on the registered holder or on any
other person) 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 Tendered Notes listed in this Letter of
Transmittal.
8. TAX IDENTIFICATION NUMBER. Federal income tax law requires that the
holder(s) of any Tendered 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, the Holder
may be subject to backup withholding and a $50 penalty imposed by the Internal
Revenue Service. (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 holder of Tendered Notes must provide
such holder's correct TIN by completing the Substitute Form W-9 set forth
herein, certifying that the TIN provided is correct (or that such holder is
awaiting a TIN), and that (i) the holder has not been notified by the Internal
Revenue Service that such holder is subject to backup withholding as a result of
failure to report all interest or dividends or (ii) the Internal Revenue Service
has notified the holder that such holder is no longer subject to backup
withholding. If the Tendered Notes are registered in more than one name or are
not in the name of the actual owner, consult the "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), acceptance
<PAGE>
and withdrawal of Tendered 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 Notes not validly tendered or any 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
Notes as to any ineligibility of any holder who seeks to tender 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 Notes must be cured within such
time as the Company shall determine. Neither the Company, the Exchange Agent nor
any other person shall be under any duty to give notification of defects or
irregularities with respect to tenders of Notes, nor shall any of them incur any
liability for failure to give such notification. Tenders of Notes will not be
deemed to have been made until such defects or irregularities have been cured or
waived. Any Notes received by the Exchange Agent that are not properly tendered
and as to which the defects or irregularities have not been cured or waived will
be returned by the Exchange Agent to the tendering holders, unless otherwise
provided in this Letter of Transmittal, as soon as practicable following the
Expiration Date.
10. WAIVER OF CONDITIONS. The Company reserves the absolute right to
amend, waive or modify any of the conditions in the Exchange Offer in the case
of any Tendered Notes.
11. NO CONDITIONAL TENDER. No alternative, conditional, irregular, or
contingent tender of Notes or transmittal of this Letter of Transmittal will be
accepted.
12. MUTILATED, LOST, STOLEN OR DESTROYED NOTES. Any tendering Holder whose
Notes have been mutilated, lost, stolen or destroyed should contact the Exchange
Agent at the address indicated herein for further instructions.
13. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests
for assistance and requests for additional copies of the Prospectus or this
Letter of Transmittal may be directed to the Exchange Agent at the address
indicated herein. Holders may also contact their broker, dealer, commercial
bank, trust company or other nominee for assistance concerning the Exchange
Offer.
14. ACCEPTANCE OF TENDERED NOTES AND ISSUANCE OF NOTES; RETURN OF
NOTES. Subject to the terms and conditions of the Exchange Offer, the Company
will accept for exchange all validly tendered Notes as soon as practicable after
the Expiration Date and will issue Exchange Notes therefor as soon as
practicable thereafter. For purposes of the Exchange Offer, the Company shall be
deemed to have accepted tendered Notes when, as and if the Company has given
written or oral notice (immediately followed in writing) thereof to the Exchange
Agent. If any Tendered Notes are not exchanged pursuant to the Exchange Offer
for any reason, such unexchanged Notes will be returned, without expense, to the
undersigned at the address shown in Box 1 or at a different address as may be
indicated herein under "Special Delivery Instructions" (Box 3).
15. WITHDRAWAL. Tenders may be withdrawn only pursuant to the procedures
set forth in the Prospectus under the caption "The Exchange Offer--Procedures
for Tendering--Withdrawal of Tenders of Notes Deposited with DTC."
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER FOR EXCHANGE
9% SENIOR SUBORDINATED NOTES DUE 2009
OF
DURA OPERATING CORP.
PURSUANT TO THE PROSPECTUS DATED AUGUST 9, 1999
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK
TIME, ON SEPTEMBER 8, 1999 UNLESS EXTENDED (THE "EXPIRATION DATE").
- --------------------------------------------------------------------------------
PLEASE READ CAREFULLY THE ATTACHED INSTRUCTIONS
THE PRINCIPAL EXCHANGE AGENT FOR THIS EXCHANGE OFFER IS U.S. BANK TRUST NATIONAL
ASSOCIATION
<TABLE>
<CAPTION>
<S> <C>
REGISTERED OR CERTIFIED MAIL: BY OVERNIGHT COURIER OR HAND:
U.S. Bank Trust National Association U.S. Bank Trust National Association
180 E. 5(th) Street 180 E. 5(th) Street
St. Paul, Minnesota 55101 St. Paul, Minnesota 55101
Attn: Specialized Finance Department Attn: Specialized Finance Department
TO CONFIRM BY TELEPHONE OR FOR INFORMATION: BY FACSIMILE TRANSMISSION:
(651) 244-1572 (651) 244-1537
</TABLE>
THE EXCHANGE AGENT IN LUXEMBOURG IS THE INDUSTRIAL BANK OF JAPAN (LUXEMBOURG)
S.A.
<TABLE>
<CAPTION>
<S> <C>
REGISTERED OR CERTIFIED MAIL: BY OVERNIGHT COURIER OR HAND:
The Industrial Bank of Japan (Luxembourg) S.A. The Industrial Bank of Japan (Luxembourg) S.A.
6 Rue Jean Monnet 6 Rue Jean Monnet
P.O. Box 68 P.O. Box 68
L-2010 Luxembourg L-2010 Luxembourg
Attn: Securities Agent Group Attn: Securities Agent Group
TO CONFIRM BY TELEPHONE OR FOR INFORMATION: BY FACSIMILE TRANSMISSION:
352 42 16 17 550 362 42 16 17 448
</TABLE>
FOR QUESTIONS REGARDING THIS LETTER OF TRANSMITTAL OR FOR OTHER INFORMATION, YOU
MAY CONTACT EITHER OF THE EXCHANGE AGENTS.
The recipient of this Letter of Transmittal hereby acknowledges receipt of
the Prospectus dated August 9, 1999 (as it may be supplemented and amended from
time to time, the "PROSPECTUS") of Dura Operating Corp. (the "ISSUER"), and this
Letter of Transmittal (the "LETTER OF TRANSMITTAL"), which together constitute
the Issuer's offer (the "EXCHANGE OFFER") to exchange [EURO]1,000 in principal
amount of its 9% Senior Subordinated Notes due 2009 (the "EXCHANGE NOTES"),
which have been registered under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), pursuant to a Registration Statement, for each [EURO]1,000 in
principal amount of its outstanding 9% Senior Subordinated Notes due 2009 (the
"OLD NOTES"). Capitalized terms used but not defined herein have the meaning
ascribed to them in the Prospectus.
Upon the terms and subject to the conditions of the Exchange Offer, the
acceptance for exchange of Old Notes validly tendered and not withdrawn and the
issuance of the Exchange Notes will be made on the Exchange Date. For the
purposes of the Exchange Offer, the Issuer shall be deemed to have accepted for
exchange validly tendered Old Notes when, as and if the Issuer has given written
notice thereof to the Exchange Agent.
In connection with the Exchange Offer by the Issuer, Book-Entry Interests in
the depository interests in the Old Notes ("OLD BOOK-ENTRY INTERESTS") may be
tendered in exchange for Book-Entry Interests in the depository interests in the
Exchange Notes which are traded through the facilities of Morgan Guaranty Trust
Company of New York, Brussels office, as operator of Euroclear System
("EUROCLEAR") and CedelBank, Societe Anonyme ("CEDELBANK" and, together with
Euroclear, each a "BOOK-ENTRY TRANSFER FACILITY"). References herein to Old
Notes include Old Book-Entry Interests and references to Exchange Notes include
Exchange Book-Entry Interests.
<PAGE>
An electronic instruction relating to the Exchange Offer must be sent to a
Book-Entry Transfer Facility in accordance with their procedures in order to
tender Old Notes. All deliveries of Old Notes must be made in accordance with
their procedures and pursuant to the procedures set forth in the Prospectus.
Upon receipt of an electronic transfer from a holder of Old Notes (a
"TENDERING HOLDER"), the Book-Entry Transfer Facility will block the position of
Old Notes that the Tendering Holder of the Old Notes has requested to exchange
and upon completion of the Exchange Offer and upon confirmation of receipt of
the Exchange Notes, the Book-Entry Transfer Facility will simultaneously
transfer the Old Notes out of the participant's accounts and replace them with
an equivalent amount of Exchange Notes. By sending such electronic instruction,
the holder of the Old Notes acknowledges and agrees to be bound by the terms of
this Letter of Transmittal, the respective participant of the Book-Entry
Transfer Facility confirms on behalf of itself and the beneficial owners of such
Old Notes all provisions of the Letter of Transmittal applicable to it and such
beneficial owners as fully as if it had completed the information required
herein and executed and transmitted this Letter of Transmittal to the Exchange
Agent.
The Instructions included with this Letter of Transmittal must be followed
in their entirety. Questions and requests for assistance or for additional
copies of this Prospectus or this Letter of Transmittal may be directed to the
Exchange Agent, at the address listed above.
EACH PARTICIPANT IN A BOOK-ENTRY TRANSFER FACILITY TRANSMITTING AN
INSTRUCTION TO EXCHANGE OLD NOTES FOR EXCHANGE NOTES THROUGH A BOOK-ENTRY
TRANSFER FACILITY, ON BEHALF OF ITSELF AND THE BENEFICIAL OWNER OF THE OLD NOTES
TENDERED THEREBY, ACKNOWLEDGES RECEIPT OF THE PROSPECTUS AND THIS LETTER OF
TRANSMITTAL AND AGREES TO BE BOUND BY THE TERMS AND CONDITIONS OF THE EXCHANGE
OFFER AS SET FORTH IN THE PROSPECTUS AND THIS LETTER OF TRANSMITTAL.
LADIES AND GENTLEMEN:
The Tendering Holder of Old Notes wishing to accept the Exchange Offer
hereby irrevocably constitutes and appoints the Exchange Agent as the true and
lawful agent and attorney in fact of the Tendering Holder with respect to the
Old Notes, with full power of substitution (such power of attorney being deemed
to be an irrevocable power coupled with an interest), to (i) cause ownership of
the Old Notes to be canceled upon acceptance by the Issuer of the Old Notes
pursuant to the Exchange Offer, and (ii) receive all benefits and otherwise
exercise all rights of beneficial ownership of the Old Notes, all in accordance
with the terms of the Exchange Offer.
The Tendering Holder understands that tenders of Old Notes pursuant to the
procedures described under the caption "The Exchange Offer" in the Prospectus
and in the instructions hereto will constitute a binding agreement between the
Tendering Holder and the Issuer upon the terms and subject to the conditions of
the Exchange Offer, subject only to withdrawal of such tenders on the terms set
forth in the Prospectus under the caption "The Exchange Offer--Procedures for
Tendering--Withdrawal of Tenders of Euro Notes Deposited with Euroclear." All
authority herein conferred or agreed to be conferred shall survive the death or
incapacity of the Tendering Holder and any beneficial owner(s), and every
obligation of the Tendering Holder or any beneficial owner(s) hereunder shall be
binding upon the heirs, representatives, successors, and assigns of the
Tendering Holder and such beneficial owner(s).
The Tendering Holder hereby represents and warrants that the Tendering
Holder has full power and authority to tender, exchange, assign, and transfer
the Old Notes and that the Issuer will acquire good and unencumbered title
thereto, free and clear of all liens, restrictions, charges, encumbrances, and
adverse claims when the Old Notes are acquired by the Issuer as contemplated
herein. The Tendering Holder and each beneficial owner will, upon request,
execute and deliver any additional documents reasonably requested by the Issuer
or the Exchange Agent as necessary or desirable to complete and give effect to
the transactions contemplated hereby.
The Tendering Holder also acknowledges that this Exchange Offer is being
made by the Issuer in reliance on an interpretation by the staff of the
Securities and Exchange Commission (the "SEC"), as set forth in no-action
letters issued to third parties, that the Exchange Notes issued in exchange for
the Old Notes pursuant to the Exchange Offer may be offered for resale, resold
and otherwise transferred by holders thereof (other than a broker-dealer, as set
forth below, or any such Tendering Holder that is an "affiliate" of the Issuer
within the meaning of Rule 405 under the Securities Act of 1933, as amended (the
"SECURITIES ACT")) without compliance with the registration and prospectus
delivery provisions of the Securities Act, provided that such Exchange Notes are
acquired in the ordinary course of such Tendering Holder's business and such
Tendering Holders have no arrangement with any person to participate in the
distribution (within the meaning of the Securities Act) of such Exchange Notes.
By tendering, each Tendering Holder of Old Notes represents to the Issuer that
(i) the Exchange Notes acquired pursuant to the Exchange Offer are being
obtained in the ordinary course of business of the person receiving such
Exchange Notes, whether or not
2
<PAGE>
such person is such Tendering Holder, (ii) neither the Tendering Holder of Old
Notes nor any such other person is engaged in or intends to participate in a
distribution of such Exchange Notes (iii) if the Tendering Holder is not a
broker-dealer or is a broker-dealer but will not receive Exchange Notes for its
own account in exchange for Old Notes, neither the Tendering Holder nor any such
other person is engaged in or intends to participate in a distribution of such
Exchange Notes and (iv) neither the Tendering Holder nor any such other person
is an "affiliate" of the issuer within the meaning of Rule 405 under the
Securities Act. By tendering, such Tendering Holder that is a broker-dealer
(whether or not it is also an "affiliate") that will receive Exchange Notes for
its own account pursuant to the Exchange Offer, represents that the Old Notes to
be exchanged for the Exchange Notes were acquired by it as a result of
market-making activities or other trading activities, and acknowledges that it
will deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such Exchange Notes; however, by so acknowledging
and by delivering a prospectus, such Tendering Holder will not he deemed to
admit that it is an "underwriter" within the meaning of the Securities Act. The
Tendering Holder acknowledges that in reliance on an interpretation by the staff
of the SEC, a broker-dealer may fulfill his prospectus deliver requirements with
respect to the Exchange Notes (other than a resale of an unsold allotment from
the original sale of the Old Notes) with the Prospectus which constitutes part
of this Exchange Offer.
IMPORTANT: THE ELECTRONIC TENDER OF OLD NOTES THROUGH THE ELECTRONIC TENDER
SYSTEMS OF EUROCLEAR AND/OR CEDEL, AS APPLICABLE, MUST BE RECEIVED BY EUROCLEAR
AND/ OR CEDELBANK BY THE TIME SPECIFIED IN THE BOOK-ENTRY TRANSFER FACILITY
PROCEDURES FOR FORWARDING BY THE BOOK-ENTRY TRANSFER FACILITY PRIOR TO 5:00 P.M.
NEW YORK TIME, ON THE EXPIRATION DATE.
3
<PAGE>
DURA OPERATING CORP.
INSTRUCTIONS TO LETTER OF TRANSMITTAL
FORMING PART OF THE TERMS AND CONDITIONS
OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL. This Letter of Transmittal is to be
read by the beneficial owners of Old Notes who wish to exchange their Old
Notes pursuant to the Exchange Offer. For a Tendering Holder to properly
tender Old Notes pursuant to the Exchange Offer, a properly completed
electronic tender message sent to Euroclear and/or CedelBank, must be
received pursuant to Euroclear and/or CedelBank procedures on a date certain
before the Expiration date for transmittal by Euroclear and/or CedelBank
prior to 5:00 p.m., New York time, on the Expiration Date. Neither the
Issuer nor the Exchange Agent is under any obligation to notify any
tendering holder of the Issuer's acceptance of Old Notes prior to the
closing of the Exchange Offer. In addition, U.S. Tendering Holders must
complete and return an Internal Revenue Service Form W-9(an "IRS FORM W-9").
See Instruction 4. Delivery of the Old Notes will be deemed made only when
actually received or confirmed by the Exchange Agent.
2. PARTIAL TENDERS. Tenders of Old Notes will be accepted only in integral
multiples of [EURO]1,000 in principal amount. If less than the entire
principal amount of Old Notes held by the Tendering Holder is tendered, the
Tendering Holder should fill out the applicable items in the electronic
tender message sent to Euroclear and/or CedelBank. The entire principal
amount of Old Notes delivered to the Exchange Agent will be deemed to have
been tendered unless otherwise indicated.
3. TRANSFER TAXES. The Issuer will pay all transfer taxes, if any, applicable
to the exchange of Old Notes pursuant to the Exchange Offer. If, however, a
transfer tax is imposed for any reason other than the transfer and exchange
of Old Notes pursuant to the Exchange Offer, then the amount of any such
transfer taxes (whether imposed on the registered holder or on any other
person) will be payable by the Tendering Holder. If satisfactory evidence of
payment of such taxes or exemption therefrom is not submitted with the
electronic message sent to Euroclear and/or CedelBank, the amount of such
transfer taxes will be billed directly to such Tendering Holder.
4. U.S. BACKUP TAX WITHHOLDING AND INTERNAL REVENUE SERVICE FORM W-9. Under the
United States federal income tax laws, payments made to United States
persons on account of Exchange Notes issued pursuant to the Exchange Offer
may be subject to backup withholding at a rate of 31%. In order to avoid
such backup withholding, a Tendering Holder that is a United States person
may be required to complete and sign an IRS Form W-9 and provide it to [U.S.
BANK TRUST NATIONAL ASSOCIATION,] as payor. Certain holders (including,
among others, corporation and certain foreign individuals) are not subject
to these backup withholding and reporting requirements. In order for a
foreign individual to qualify as an exempt recipient, such Tendering Holder
must submit an IRS Form W-9 to the payor, signed under penalties of perjury
and must attest to that individual's exempt status.
5. VALIDITY OF TENDERS. All questions as to the validity, form, eligibility
(including time of receipt), acceptance and withdrawal of Old Notes will be
determined by the Issuer in its sole discretion, which determination will be
final and binding. The Issuer reserves the right to reject any and all Old
Notes not validly tendered or any Old Notes the Issuer's acceptance of which
would, in the opinion of the Issuer or its counsel, be unlawful. The Issuer
also reserves the right to waive any conditions of the Exchange Offer or
defects or irregularities in tenders of Old Notes or as to any ineligibility
of any holder who seeks to tender Old Notes in the Exchange Offer. The
interpretation of the terms and conditions of the Exchange Offer (including
this Letter of Transmittal and the instructions hereto) by the Issuer shall
be final and binding on all parties. Unless waived, any defects or
irregularities in connection with tenders of Old Notes must be cured within
such time as the Issuer shall determine. Neither the Issuer, the Exchange
Agent nor any other person shall be under any duty to give notification of
defects or irregularities with respect to tenders of Old Notes, nor shall
any of them incur any liability for failure to give such notification.
Tenders of Old Notes will not be deemed to have been made until such defects
or irregularities have been cured or waived. Any Old Notes received by the
Exchange Agent that are not properly tendered and as to which the defects or
irregularities have not been cured or waived will be returned by the
Exchange Agent to the Tendering Holders, unless otherwise provided in this
Letter of Transmittal, as soon as practicable following the Expiration Date.
6. WAIVER OF CONDITIONS. The Issuer reserves the absolute right to amend, waive
or modify any of the conditions in the Exchange Offer in the case of any Old
Notes.
7. NO CONDITIONAL TENDER. No alternative, conditional, irregular, or contingent
tender of Old Notes will be accepted.
4
<PAGE>
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests for
assistance and requests for additional copies of the Prospectus or this
Letter of Transmittal may be directed to the Exchange Agent at the address
indicated herein. Tendering Holders may also contact their broker, dealer,
commercial bank, trust company or other nominee for assistance concerning
the Exchange Offer.
9. ACCEPTANCE OF OLD NOTES AND ISSUANCE OF STERLING EXCHANGE NOTES; RETURN OF
OLD NOTES. Subject to the terms and conditions of the Exchange Offer, the
Issuers will accept for exchange all validly tendered Old Notes as soon as
practicable after the Expiration Date and will issue Exchange Notes therefor
as soon as practicable thereafter. For purposes of the Exchange Offer, the
Issuer shall be deemed to have accepted Old Notes when, as and if the Issuer
has given written or oral notice (immediately followed in writing) thereto
the Exchange Agent.
10. WITHDRAWAL. Tenders may be withdrawn only pursuant to the procedures set
forth in the Prospectus under the caption "The Exchange Offer--Procedures
for Tendering--Withdrawal of Tenders of Euro Notes Deposited with
Euroclear."
11. INCORPORATION OF LETTER OF TRANSMITTAL. This Letter of Transmittal shall be
deemed to be incorporated in and acknowledged and accepted by any tender
through procedures established by a Book-Entry Transfer Facility by any
participant in the Book-Entry Transfer Facility on behalf of itself and the
beneficial owners of any Old Notes so tendered.
5
<PAGE>
NOTICE OF GUARANTEED DELIVERY
WITH RESPECT TO
9% SENIOR SUBORDINATED NOTES DUE 2009
OF
DURA OPERATING CORP.
PURSUANT TO THE PROSPECTUS DATED AUGUST 9, 1999
This form must be used by a holder of 9% Senior Subordinated Notes due 2009
(the "Notes") of Dura Operating Corp., a Delaware corporation (the "Company"),
who wishes to tender Notes to the Exchange Agent pursuant to the guaranteed
delivery procedures described in "The Exchange Offer--Procedures for
Tendering--Guaranteed Delivery Procedures for Notes Deposited with DTC" of the
Company's Prospectus, dated August 9, 1999 (the "Prospectus") and in Instruction
2 to the related Letter of Transmittal. Any holder who wishes to tender Notes
pursuant to such guaranteed delivery procedures must ensure that the Exchange
Agent receives this Notice of Guaranteed Delivery prior to the Expiration Date
of the Exchange Offer. Capitalized terms used but not defined herein have the
meanings ascribed to them in the Prospectus or the Letter of Transmittal.
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON SEPTEMBER 8, 1999 UNLESS EXTENDED (THE "EXPIRATION DATE").
U.S. BANK TRUST NATIONAL ASSOCIATION
(the "Exchange Agent")
<TABLE>
<CAPTION>
<S> <C>
BY MAIL: OVERNIGHT COURIER:
U.S. Bank Trust National Association U.S. Bank Trust National Association
180 E. 5(th) Street 180 E. 5(th) Street
St. Paul, Minnesota 55101 St. Paul, Minnesota 55101
Attention: Specialized Finance Department Attention: Specialized Finance Department
BY HAND: FACSIMILE TRANSMISSION:
U.S. Bank Trust National Association (651) 244-1537
180 E. 5(th) Street
St. Paul, Minnesota 55101 CONFIRM BY TELEPHONE:
Attention: Specialized Finance Department (651) 244-1572
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT
CONSTITUTE A VALID DELIVERY.
<PAGE>
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal 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 signature box on the Letter of Transmittal.
Ladies and Gentlemen:
The undersigned hereby tenders to the Company, upon the terms and subject to
the conditions set forth in the Prospectus and the related Letter of
Transmittal, receipt of which is hereby acknowledged, the principal amount of
Notes set forth below pursuant to the guaranteed delivery procedures set forth
in the Prospectus and in Instruction 2 of the related Letter of Transmittal.
The undersigned hereby tenders the Notes listed below:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
<S> <C> <C>
AGGREGATE AGGREGATE
PRINCIPAL PRINCIPAL
CERTIFICATE NUMBER(S) (IF KNOWN) OF NOTES OR AMOUNT AMOUNT
ACCOUNT NUMBER AT THE BOOK-ENTRY FACILITY REPRESENTED TENDERED
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
PLEASE SIGN AND COMPLETE
<S> <C>
- -------------------------------------------------------------------------------------------
Signatures of Registered Holder(s) or
Authorized Signatory: Date: , 1999
Address:
Name(s) of Registered Holder(s): Area Code and Telephone No.
- -------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
This Notice of Guaranteed Delivery must be signed by the Holder(s) exactly
as their name(s) appear on certificates for Notes or on a security position
listing as the owner of Notes, or by person(s) authorized to become 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): ___________________________________________________________________
________________________________________________________________________________
- --------------------------------------------------------------------------------
3
<PAGE>
- --------------------------------------------------------------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm which is a member of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
or is a commercial bank or trust company having an office or correspondent in
the United States, or is otherwise an "eligible guarantor institution" within
the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as
amended, guarantees deposit with the Exchange Agent of the Letter of Transmittal
(or facsimile thereof), together with the Notes tendered hereby in proper form
for transfer (or confirmation of the book-entry transfer of such Notes into the
Exchange Agent's account at the Book-Entry Transfer Facility described in the
Prospectus under the caption "The Exchange Offer--Procedures for
Tendering--Guaranteed Delivery Procedures for Notes Deposited with DTC" and in
the Letter of Transmittal) and any other required documents, all by 5:00 p.m.,
New York City time, on the fifth New York Stock Exchange trading day following
the Expiration Date.
<TABLE>
<CAPTION>
<S> <C>
Name of firm:
(Authorized Signature)
Address: Name:
(Please Print)
Title:
(Include Zip Code)
Area Code and Tel. No. Dated: , 1999
</TABLE>
- --------------------------------------------------------------------------------
DO NOT SEND SECURITIES WITH THIS FORM. ACTUAL SURRENDER OF SECURITIES MUST
BE MADE PURSUANT TO, AND BE ACCOMPANIED BY, AN EXECUTED LETTER OF TRANSMITTAL.
4
<PAGE>
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
related 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 Notes referred
to herein, the signature must correspond with the name(s) written on the face of
the 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 Notes, the signature must correspond with the name shown on the security
position listing as the owner of the Notes.
If this Notice of Guaranteed Delivery is signed by a person other than the
registered holder(s) of any 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 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.
5
<PAGE>
INSTRUCTIONS
TO REGISTERED HOLDER AND/OR
BOOK-ENTRY TRANSFER FACILITY PARTICIPANT FROM BENEFICIAL OWNER
OF
DURA OPERATING CORP.
9% SENIOR SUBORDINATED NOTES DUE 2009
To Registered Holder and/or Participant of the Book-Entry Transfer Facility:
The undersigned hereby acknowledges receipt of the Prospectus, dated August
9, 1999 (the "Prospectus") of Dura Operating Corp., a Delaware corporation (the
"Company"), and the accompanying Letter of Transmittal (the "Letter of
Transmittal"), that together constitute the Company's offer (the "Exchange
Offer"). Capitalized terms used but not defined herein have the meanings
ascribed to them in the Prospectus.
This will instruct you, the registered holder and/or book-entry transfer
facility participant, as to action to be taken by you relating to the Exchange
Offer with respect to the 9% Senior Subordinated Notes due 2009 (the "Notes")
held by you for the account of the undersigned.
The aggregate face amount of the Notes held by you for the account of the
undersigned is (FILL IN AMOUNT):
$ of the 9% Senior Subordinated Notes due 2009 or
[EURO] of the 9% Senior Subordinated Notes due 2009
With respect to the Exchange Offer, the undersigned hereby instructs you
(CHECK APPROPRIATE BOX):
/ / TO TENDER the following Notes held by you for the account of the
undersigned (INSERT PRINCIPAL AMOUNT OF NOTES TO BE TENDERED, IF ANY):
$ of the 9% Senior Subordinated Notes due 2009
[EURO] of the 9% Senior Subordinated Notes due 2009
/ / NOT TO TENDER any Notes held by you for the account of the undersigned.
If the undersigned instruct you to tender the Notes held by you for the
account of the undersigned, it is understood that you are authorized to make, on
behalf of the undersigned (and the undersigned, by its signature below, hereby
makes to you), the representation and warranties contained in the Letter of
Transmittal that are to be made with respect to the undersigned as a beneficial
owner, including but not limited to the representations that the undersigned's
principal residence is in the state of (FILL IN STATE) , (i) the
undersigned is acquiring the notes to be received in the Exchange Offer (the
"Exchange Notes") in the ordinary course of business of the undersigned, (ii)
the undersigned is not participating, does not participate, and has no
arrangement or understanding with any person to participate in the distribution
of the Exchange Notes, (iii) the undersigned acknowledges that any person
participating in the Exchange Offer for the purpose of distributing the Exchange
Notes must comply with the registration and prospectus delivery requirements of
the Securities Act of 1933, as amended (the "Act"), in connection with a
secondary resale transaction of the Exchange Notes acquired by such person and
cannot rely on the position of the Staff of the Securities and Exchange
Commission set forth in no-action letters that are discussed in the section of
the Prospectus entitled "The Exchange Offer;" and (iv) the undersigned is not an
"affiliate," as defined in Rule 405 under the Act, of the Company or any
Subsidiary Guarantor; (b) to agree, on behalf of the undersigned, as set forth
in the Letter of Transmittal; and (c) to take such other action as necessary
under the Prospectus or the Letter of Transmittal to effect the valid tender of
such Notes.
<TABLE>
<S> <C>
Check this box if the Beneficial Owner of the Notes is a Participating
Broker-Dealer and such Participating Broker-Dealer acquired the Notes for its own
/ / account as a result of market-making activities or other trading activities. IF
THIS BOX IS CHECKED, PLEASE SEND A COPY OF THESE INSTRUCTIONS TO DURA OPERATING
CORP., ATTENTION CHIEF FINANCIAL OFFICER, FACSIMILE (248) 299-7518.
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
SIGN HERE
Name of beneficial owner(s): _______________________________________________
Signature(s): ______________________________________________________________
Name (PLEASE PRINT): _______________________________________________________
Address: ___________________________________________________________________
_____________________________________
_____________________________________
Telephone number: __________________________________________________________
Taxpayer Identification or Social Security Number: _________________________
Date: ______________________________________________________________________
- --------------------------------------------------------------------------------
<PAGE>
INSTRUCTIONS
TO BOOK-ENTRY TRANSFER PARTICIPANT FROM OWNER
OF
DURA OPERATING CORP.
9% SENIOR SUBORDINATED NOTES DUE 2009
To Participant of the Book-Entry Transfer Facility:
The undersigned hereby acknowledges receipt of the Prospectus, dated August
9, 1999 (the "Prospectus") of Dura Operating Corp., a Delaware corporation (the
"Company"), and the accompanying Letter of Transmittal (the "Letter of
Transmittal"), that together constitute the Company's offer (the "Exchange
Offer"). Capitalized terms used but not defined herein have the meanings
ascribed to them in the Prospectus.
This will instruct you, the book-entry transfer facility participant, as to
action to be taken by you relating to the Exchange Offer with respect to the 9%
Senior Subordinated Notes due 2009 (the "Notes") held by you for the account of
the undersigned.
The aggregate face amount of the Notes held by you for the account of the
undersigned is (FILL IN AMOUNT):
[EURO] of the 9% Senior Subordinated Notes due 2009
With respect to the Exchange Offer, the undersigned hereby instructs you
(CHECK APPROPRIATE BOX):
/ / TO TENDER the following Notes held by you for the account of the
undersigned (INSERT PRINCIPAL AMOUNT OF NOTES TO BE TENDERED, IF ANY):
[EURO] of the 9% Senior Subordinated Notes due 2009
/ / NOT TO TENDER any Notes held by you for the account of the undersigned.
If the undersigned instruct you to tender the Notes held by you for the
account of the undersigned, it is understood that you are authorized to make, on
behalf of the undersigned (and the undersigned, by its signature below, hereby
makes to you), the representation and warranties contained in the Letter of
Transmittal that are to be made with respect to the undersigned as a beneficial
owner, including but not limited to the representations that the undersigned is
acquiring the notes to be received in the Exchange Offer (the "Exchange Notes")
in the ordinary course of business of the undersigned, the undersigned is not
participating, does not participate, and has no arrangement or understanding
with any person to participate in the distribution of the Exchange Notes, the
undersigned acknowledges that any person participating in the Exchange Offer for
the purpose of distributing the Exchange Notes must comply with the registration
and prospectus delivery requirements of the Securities Act of 1933, as amended
(the "Act"), in connection with a secondary resale transaction of the Exchange
Notes acquired by such person and cannot rely on the position of the Staff of
the Securities and Exchange Commission set forth in no-action letters that are
discussed in the section of the Prospectus entitled "The Exchange Offer;" and
(iv) the undersigned is not an "affiliate," as defined in Rule 405 under the
Act, of the Company or any Subsidiary Guarantor; (b) to agree, on behalf of the
undersigned, as set forth in the Letter of Transmittal; and (c) to take such
other action as necessary under the Prospectus or the Letter of Transmittal to
effect the valid tender of such Notes.
<TABLE>
<S> <C>
Check this box if the Beneficial Owner of the Notes is a Participating
Broker-Dealer and such Participating Broker-Dealer acquired the Notes for its own
/ / account as a result of market-making activities or other trading activities. IF
THIS BOX IS CHECKED, PLEASE SEND A COPY OF THESE INSTRUCTIONS TO DURA OPERATING
CORP., ATTENTION CHIEF FINANCIAL OFFICER, FACSIMILE (248) 299-7518.
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
SIGN HERE
Name of beneficial owner(s): _______________________________________________
Signature(s): ______________________________________________________________
Name (PLEASE PRINT): _______________________________________________________
Address: ___________________________________________________________________
_____________________________________
_____________________________________
Telephone number: __________________________________________________________
Taxpayer Identification or Social Security Number: _________________________
Date: ______________________________________________________________________
- --------------------------------------------------------------------------------
