<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 25, 1997
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
HAYES WHEELS INTERNATIONAL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
(STATE OF INCORPORATION)
3714
(PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER)
13-3384636
(I.R.S. EMPLOYER IDENTIFICATION NUMBER)
38481 HURON RIVER DRIVE, ROMULUS, MICHIGAN 48174, (313) 941-2000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
HAYES WHEELS INTERNATIONAL -- CALIFORNIA, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
(STATE OF INCORPORATION)
3714
(PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER)
33-0042337
(I.R.S. EMPLOYER IDENTIFICATION NUMBER)
14500 FIRESTONE BLVD., LA MIRADA, CALIFORNIA, (714) 994-0150
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
HAYES WHEELS INTERNATIONAL -- GEORGIA, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
(STATE OF INCORPORATION)
3312
(PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER)
58-2046122
(I.R.S. EMPLOYER IDENTIFICATION NUMBER)
1215 PALMOUR DRIVE, GAINESVILLE, GEORGIA 30501, (770) 535-6783
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
HAYES WHEELS INTERNATIONAL -- INDIANA, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
(STATE OF INCORPORATION)
3714
(PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER)
62-1240825
(I.R.S. EMPLOYER IDENTIFICATION NUMBER)
1870 RIVERFORK DRIVE, HUNTINGTON, INDIANA 46750, (219) 356-7001
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
HAYES WHEELS INTERNATIONAL -- MEXICO, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
(STATE OF INCORPORATION)
3714
(PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER)
38-3281831
(I.R.S. EMPLOYER IDENTIFICATION NUMBER)
38481 HURON RIVER DRIVE, ROMULUS, MICHIGAN 48174, (313) 941-2000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
HAYES WHEELS INTERNATIONAL -- MICHIGAN, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MICHIGAN
(STATE OF INCORPORATION)
3714
(PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER)
38-1799246
(I.R.S. EMPLOYER IDENTIFICATION NUMBER)
2440 HIGHLAND ROAD, HOWELL, MICHIGAN 48843, (517) 546-3441
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
MOTOR WHEEL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
OHIO
(STATE OF INCORPORATION)
3714
(PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER)
38-1741793
(I.R.S. EMPLOYER IDENTIFICATION NUMBER)
38481 HURON RIVER DRIVE, ROMULUS, MICHIGAN 48174, (313) 941-2000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
MWC ACQUISITION SUB, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
(STATE OF INCORPORATION)
3599
(PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER)
38-3086380
(I.R.S. EMPLOYER IDENTIFICATION NUMBER)
38481 HURON RIVER DRIVE, ROMULUS, MICHIGAN 48174, (313) 941-2000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
DANIEL M. SANDBERG, ESQ.
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
HAYES WHEELS INTERNATIONAL, INC.
38481 HURON RIVER DRIVE, ROMULUS, MICHIGAN 48174, (313) 941-2000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPY TO:
ROBERT B. PINCUS, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
ONE RODNEY SQUARE, WILMINGTON, DELAWARE 19801, (302) 651-3000
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the Registration Statement becomes effective.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=================================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PER SECURITY(1) OFFERING PRICE(1) REGISTRATION FEE(1)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
9 1/8% Series B Senior Subordinated Notes Due
2007........................................ $250,000,000 100% $250,000,000 $ 75,757.57
- ---------------------------------------------------------------------------------------------------------------------------------
9 1/8% Series B Senior Subordinated Notes Due
2007........................................ $150,000,000 100% $150,000,000 $ 45,454.54
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Guarantees of the 9 1/8% Series B
Subordinated Notes Due 2007(2).............. -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Total..................................... $400,000,000 100% $400,000,000 $121,212.11
=================================================================================================================================
</TABLE>
(1) Determined in accordance with Rule 457(f) promulgated under the Securities
Act of 1933, as amended.
(2) No separate consideration will be received for the Guarantees, and,
therefore, no additional registration fee is required.
------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
================================================================================
<PAGE> 2
HAYES WHEELS INTERNATIONAL, INC.
FORM S-4
CROSS-REFERENCE SHEET
<TABLE>
<CAPTION>
ITEM NUMBER AND CAPTION HEADING IN PROSPECTUS
----------------------- ---------------------
<C> <S> <C>
A. INFORMATION ABOUT THE TRANSACTION
1. Forepart of Registration Statement and
Outside Front Cover Page of Prospectus.... Registration Statement Cover; Outside Front Cover
Page of Prospectus
2. Inside Front and Outside Back Cover Pages of
Prospectus................................ Inside Front and Outside Back Cover Pages of
Prospectus; Incorporation of Certain Documents by
Reference; Available Information
3. Risk Factors, Combined Ratio of Earnings to
Fixed Charges and Other Information....... Prospectus Summary; Risk Factors
4. Terms of the Transaction.................... Prospectus Summary; The Exchange Offer; Description
of the Notes; Certain Federal Income Tax
Considerations
5. Pro Forma Financial Information............. Prospectus Summary
6. Material Contacts With the Company Being
Acquired.................................. *
7. Additional Information Required For
Reoffering by Persons and Parties Deemed
to be Underwriters........................ *
8. Interests of Named Experts and Counsel...... Legal Matters; Experts
9. Disclosure of Commission Position on
Indemnification For Securities Act
Liabilities............................... *
B. INFORMATION ABOUT THE REGISTRANT
10. Information with Respect to S-3
Registrants............................... Incorporation of Certain Documents by Reference;
Prospectus Summary
11. Incorporation of Certain Information by
Reference................................. Incorporation of Certain Documents by Reference;
Available Information
12. Information with Respect to S-2 or S-3
Registrants............................... *
13. Incorporation of Certain Information by
Reference................................. *
14. Information With Respect to Registrants
Other Than S-3 or S-2 Registrants......... *
C. INFORMATION ABOUT THE COMPANY BEING ACQUIRED
15. Information With Respect to S-3 Companies... *
16. Information with Respect to S-2 or S-3
Companies................................. *
17. Information With Respect to Companies Other
Than S-2 or S-3 Companies................. *
D. VOTING AND MANAGEMENT INFORMATION
18. Information of Proxies, Consents or
Authorizations Are to be Solicited........ *
19. Information if Proxies, Consents or
Authorizations Are Not to be Solicited, or
in an Exchange Offer...................... Incorporation of Certain Documents by Reference;
Available Information
</TABLE>
- ---------------------------
* Omitted as inapplicable.
<PAGE> 3
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE
WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE
SECURITIES LAWS OF ANY SUCH JURISDICTION.
SUBJECT TO COMPLETION, DATED AUGUST 25, 1997
PROSPECTUS
[HAYES WHEELS INTERNATIONAL, INC. LOGO]
OFFER FOR ALL OUTSTANDING
9 1/8% SENIOR SUBORDINATED NOTES DUE 2007 IN EXCHANGE FOR
9 1/8% SERIES B SENIOR SUBORDINATED NOTES DUE 2007
OF
HAYES WHEELS INTERNATIONAL, INC.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.
NEW YORK CITY TIME, ON , 1997, UNLESS EXTENDED
Hayes Wheels International, Inc., a Delaware corporation (the "Company"),
hereby offers, upon the terms and subject to the conditions set forth in this
Prospectus and the accompanying Letter of Transmittal (which together constitute
the "Exchange Offer"), to exchange an aggregate principal amount of up to (i)
$250,000,000 outstanding 9 1/8% Series B Senior Subordinated Notes due 2007 (the
"New June Notes") of the Company for a like principal amount of the issued and
outstanding 9 1/8% Senior Subordinated Notes due 2007 that were issued by the
Company in an offering under Rule 144A of the Securities Act of 1933, as amended
(the "Securities Act"), which closed June 30, 1997 (the "Old June Notes"), and
(ii) $150,000,000 outstanding 9 1/8% Series B Senior Subordinated Notes due 2007
(the "New July Notes" and, collectively with the New June Notes, the "New
Notes") for a like principal amount of the issued and outstanding 9 1/8% Senior
Subordinated Notes due 2007 that were issued by the Company in an offering under
Rule 144A of the Securities Act which closed July 22, 1997 (the "Old July Notes"
and, collectively with the Old June Notes, the "Old Notes"), from the respective
holders thereof (the "Holders"). The terms of the New Notes are identical in all
material respects to the Old Notes, except that the New Notes do not include
transfer restrictions, registration rights and Additional Interest (as defined
herein) provisions included in the Old Notes. As used in this Prospectus, unless
the context requires otherwise, references to the "Notes" refer to the Old Notes
and the New Notes, references to the "June Notes" refer to the Old June Notes
and the New June Notes, and references to the "July Notes" refer to the Old July
Notes and the New July Notes.
The Old Notes are, and the New Notes will be, general unsecured obligations
of the Company, subordinated in right of payment to all existing and future
Senior Indebtedness (as defined herein) of the Company. The Old Notes are, and
the New Notes will be, unconditionally guaranteed, on an unsecured senior
subordinated basis, as to payment of principal, premium, if any, and interest,
jointly, and severally, by certain of the Company's material domestic
subsidiaries (the "Guarantors"). As of April 30, 1997, after giving effect to
the consummation of the Lemmerz Transactions (as defined herein), the Company
and the Guarantors would have had approximately $322.7 million of Senior
Indebtedness outstanding.
Interest on the New June Notes will accrue from (A) the later of (i) the
last interest payment date on which interest was paid on the Old June Notes
surrendered in exchange therefor or, (ii) if the Old June Notes are surrendered
for exchange on a date in a period which includes the record date for an
interest payment date to occur on or after the date of such exchange and as to
which interest will be paid, the date of such interest payment date or (B) if no
interest has been paid on the Old June Notes, from June 30, 1997.
Interest on the New July Notes will accrue from (A) the later of (i) the
last interest payment date on which interest was paid on the Old July Notes
surrendered in exchange therefor or, (ii) if the Old July Notes are surrendered
for exchange on a date in a period which includes the record date for an
interest payment date to occur on or after the date of such exchange and as to
which interest will be paid, the date of such interest payment date or (B) if no
interest has been paid on the Old July Notes, from July 22, 1997.
(continued on page 2)
SEE "RISK FACTORS" ON PAGE 15 OF THIS PROSPECTUS FOR A DESCRIPTION OF
CERTAIN RISKS TO BE CONSIDERED BY HOLDERS WHO TENDER THEIR OLD NOTES IN THE
EXCHANGE OFFER.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is , 1997.
<PAGE> 4
(Continued from front cover page)
The New Notes are being offered hereunder in order to satisfy certain
obligations of the Company contained in the Registration Rights Agreement dated
as of June 30, 1997, by and among the Company, the Guarantors and CIBC Woody
Gundy Securities Corp. ("CIBC"), Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch"), Bear, Stearns & Co. Inc., Morgan Stanley & Co.
Inc. and Salomon Brothers Inc (collectively, the "Initial Purchasers of the Old
June Notes"), and the Registration Rights Agreement dated as of July 22, 1997,
by and among the Company, the Guarantors, CIBC and Merrill Lynch (the "Initial
Purchasers of the Old July Notes" and, together with the Initial Purchasers of
the Old June Notes, the "Initial Purchasers"). Based on interpretations by the
staff of the Securities and Exchange Commission (the "Commission"), as set forth
in no-action letters issued to third parties, the Company believes that the New
Notes issued pursuant to the Exchange Offer in exchange for the Old Notes may be
offered for resale, resold and otherwise transferred by Holders thereof (other
than any such Holder which is an "affiliate" of the Company within the meaning
of Rule 405 under the Securities Act ), without compliance with the registration
and prospectus delivery provisions of the Securities Act, provided that such New
Notes are acquired in the ordinary course of such Holders' business and such
Holders have no arrangement with any person to participate in the distribution
(within the meaning of the Securities Act) of such New Notes. The Company,
however, does not intend to request the Commission to consider, and the
Commission has not considered, the Exchange Offer in the context of a no-action
letter and there can be no assurance that the staff of the Commission would make
a similar determination with respect to the Exchange Offer as in such other
circumstances. Each Holder, other than a broker-dealer, must acknowledge that it
is not engaged in, does not intend to engage in, and has no arrangement or
understanding with any person to participate in, the distribution of New Notes.
If any Holder is an affiliate of the Company, is engaged in or intends to engage
in or has any arrangement with any person to participate in the distribution of
the New Notes to be acquired pursuant to the Exchange Offer, such Holder (i)
could not rely on the applicable interpretations of the staff of the Commission
and (ii) must comply with the registration and prospectus delivery requirements
of the Securities Act in connection with any resale transaction. Each
broker-dealer that receives New Notes for its own account pursuant to the
Exchange Offer must acknowledge that it will deliver a prospectus in connection
with any resale of the New Notes. The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a broker-dealer will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
This Prospectus, as it may be amended or supplemented from time to time, may be
used by a broker-dealer in connection with resales of New Notes received in
exchange for Old Notes where such Old Notes were acquired by such broker-dealer
as a result of market making activities or other trading activities. The Company
has agreed that, for a period of 180 days after the Expiration Date (as defined
herein), it will make this Prospectus, as amended or supplemented, available to
any broker-dealer for use in connection with any such resale. See "Plan of
Distribution."
The Company will not receive any proceeds from the Exchange Offer. The
Company will pay all of the expenses incident to the Exchange Offer. Tenders of
Old Notes pursuant to the Exchange Offer may be withdrawn at any time prior to
the Expiration Date. If the Company terminates the Exchange Offer and does not
accept for exchange any Old Notes, the Company will promptly return Old Notes to
the Holders thereof. See "The Exchange Offer."
The Old Notes are eligible for trading in the Private Offerings, Resales
and Trading through Automated Linkages ("PORTAL") market. Prior to the Exchange
Offer, there has been no public market for the Old Notes or New Notes. Although
the Initial Purchasers have informed the Company that they intend to make a
market in the New Notes, they are not obligated to do so and any such market
making may be discontinued at any time without notice. If a market for the New
Notes should develop, the New Notes could trade at a discount from their
principal value. The Company does not currently intend to list the New Notes on
any securities exchange or to seek approval for quotations through any automated
quotation systems. There can be no assurance that a market for the New Notes
will develop.
Until (90 days after the date of this Prospectus), dealers
affecting transactions in the New Notes, whether or not participating in the
Exchange Offer, may be required to deliver a Prospectus. This obligation is in
addition to the obligation of dealers to deliver a Prospectus when acting as
underwriters and with respect to their unsold allotments or subscriptions.
<PAGE> 5
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company incorporates by reference herein the following documents filed
with the Commission pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act"):
I. The Company's Annual Report on Form 10-K for the fiscal year ended
January 31, 1997;
II. The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended April 30, 1997;
III. The Company's Current Reports on Form 8-K dated June 6, 1997, June 20,
1997, June 30, 1997 and July 16, 1997;
IV. The Company's Proxy Statement for the 1997 Annual Meeting of
Stockholders, dated September , 1997; and
V. The Company's Registration Statement on Form S-3, File No. 333-31669,
as amended.
All documents and reports filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and
prior to the termination of the Exchange Offer, shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
dates of filing of such documents or reports. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document deemed to be incorporated by reference herein modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
Each Guarantor is a wholly owned, direct or indirect, subsidiary of the
Company. The Guarantors have fully and unconditionally guaranteed the Notes on a
joint and several basis. No separate financial statements of the Guarantors have
been included or incorporated by reference herein because management of the
Company and each Guarantor has determined that such information is not material
to investors.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON REQUEST, WHICH
SHOULD BE DIRECTED TO HAYES WHEELS INTERNATIONAL, INC., 38481 HURON RIVER DRIVE,
ROMULUS, MICHIGAN 48174, ATTENTION: DIRECTOR OF INVESTOR RELATIONS, TELEPHONE
(313) 942-8716. IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST
SHOULD BE MADE NO LESS THAN FIVE BUSINESS DAYS PRIOR TO THE EXPIRATION OF THE
EXCHANGE OFFER.
------------------------
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange
Act and in accordance therewith files reports, proxy statements and other
information with the Commission. The reports, proxy statements and other
information filed by the Company with the Commission can be inspected and copied
at the public reference facilities of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and are available at the Commission's Regional Offices
at Seven World Trade Center, 13th Floor, New York, New York 10048, and
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661, and copies of such materials may be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Commission also maintains a Web site at
http://www.sec.gov that contains reports, proxy statements and other
information. While any Notes remain outstanding, the Company will make
available, upon request, to any holder and any prospective purchaser of the
Notes the information required by Rule 144A(d)(4) under the Securities Act
during any period in which the Company is not subject to Section 13 or 15(d) of
the Exchange Act. Any such requests should be mailed to Hayes Wheels
International, Inc., 38481 Huron River Drive, Romulus, Michigan 48174,
Attention: Director of Investor Relations, telephone (313) 942-8716.
The Company and the Guarantors have filed with the Commission a
registration statement on Form S-4 (the "Registration Statement") (of which this
Prospectus is a part) under the Securities Act for registration of the New Notes
offered hereby. This Prospectus does not contain all the information set forth
in the
2
<PAGE> 6
Registration Statement and the exhibits thereto, certain parts of which are
omitted in accordance with the Rules and Regulations of the Commission.
Reference is hereby made to the Registration Statement and related exhibits for
further information with respect to the Company and the securities offered
hereby. For information with respect to the Company and the securities offered
by this Prospectus, reference is made to the Registration Statement and the
exhibits filed or incorporated as a part thereof, which are on file at the
offices of the Commission and may be obtained upon payment of the fee prescribed
by the Commission, or may be examined without charge at the offices of the
Commission. Statements contained in this Prospectus, or in any document
incorporated in this Prospectus by reference, as to the contents of any contract
or other document referred to herein or therein are not necessarily complete,
and in each instance reference is made to the copy of such contract or other
document filed as an exhibit to the Registration Statement or such other
document, each such statement being qualified in all respects by such reference.
------------------------
THIS PROSPECTUS CONTAINS AND INCORPORATES BY REFERENCE CERTAIN FORWARD
LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995 WITH RESPECT TO THE FINANCIAL CONDITION, RESULTS OF
OPERATIONS AND BUSINESS OF THE COMPANY. THESE FORWARD LOOKING STATEMENTS INVOLVE
CERTAIN RISKS AND UNCERTAINTIES. NO ASSURANCE CAN BE GIVEN THAT ANY OF SUCH
MATTERS WILL BE REALIZED. FACTORS THAT MAY CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE CONTEMPLATED BY SUCH FORWARD LOOKING STATEMENTS INCLUDE,
AMONG OTHERS, THE FOLLOWING POSSIBILITIES: (1) EXPECTED COST SAVINGS FROM THE
LEMMERZ ACQUISITION (AS DEFINED HEREIN) CANNOT BE FULLY REALIZED; (2)
COMPETITIVE PRESSURE IN THE COMPANY'S INDUSTRY INCREASES SIGNIFICANTLY; (3)
COSTS OR DIFFICULTIES RELATED TO THE INTEGRATION OF THE BUSINESSES OF THE
COMPANY ARE GREATER THAN EXPECTED; AND (4) GENERAL ECONOMIC CONDITIONS ARE LESS
FAVORABLE THAN EXPECTED. FURTHER INFORMATION ON OTHER FACTORS WHICH COULD AFFECT
THE FINANCIAL RESULTS OF THE COMPANY AND SUCH FORWARD LOOKING STATEMENTS IS
INCLUDED IN THE SECTION HEREIN ENTITLED "RISK FACTORS" AND IN THE ANNUAL REPORT
ON FORM 10-K, THE QUARTERLY REPORT ON FORM 10-Q AND THE CURRENT REPORTS ON FORM
8-K, OF THE COMPANY, INCORPORATED HEREIN BY REFERENCE.
------------------------
Unless otherwise indicated, financial information in this Prospectus with
respect to Lemmerz (as defined herein) is expressed in dollars or in Deutsche
Mark ("marks" or "DM"). Amounts stated in dollars, unless otherwise indicated,
have been translated from marks in accordance with GAAP (as defined herein) and
should not be construed as representations that the mark amounts actually
represent such dollar amounts or could have been converted into dollars at the
rate indicated. Assets and liabilities denominated in marks are translated at
the rate of exchange in effect on the balance sheet date and income and expenses
are translated at the average rates of exchange prevailing during the year.
3
<PAGE> 7
PROSPECTUS SUMMARY
The following is a summary of certain information contained elsewhere in
this Prospectus or in the documents incorporated herein by reference. Reference
is made to, and this summary is qualified in its entirety by, the more detailed
information contained elsewhere in this Prospectus or in the documents
incorporated herein by reference. All references to fiscal years of the Company
in this Prospectus or in the documents incorporated herein by reference refer to
years commencing on February 1 of such year and ending January 31 of the
following year. Unless the context otherwise requires, the term the "Company"
refers to Hayes Wheels International, Inc. and its subsidiaries on a combined
basis after giving effect to the Lemmerz Acquisition (as defined herein), the
term "Lemmerz" refers to Lemmerz Holding GmbH and its subsidiaries, which was
acquired by the Company on June 30, 1997, and the term "Hayes" refers to Hayes
Wheels International, Inc. and its subsidiaries before the Lemmerz Acquisition.
The term "Motor Wheel" refers to Motor Wheel Corporation, a wholly owned
subsidiary of the Company, and the term "Motor Wheel Transactions" refers to the
series of related transactions which were consummated on July 2, 1996, pursuant
to which Motor Wheel became a subsidiary of Hayes.
THE COMPANY
The Company is the world's largest manufacturer of automotive wheels,
supplying approximately 30% and 23% of the automotive wheels in North America
and Europe, respectively, and also is the largest global supplier of wheels to
original equipment manufacturers ("OEMs") of passenger cars, light trucks and
commercial highway vehicles. The Company's principal customers for wheel and
brake products consist of every major OEM in North America, Europe and Japan,
including General Motors, Ford, Chrysler (the three of which comprised
approximately 57% of the Company's pro forma combined 1996 net sales), BMW,
Renault, Fiat, Volkswagen, Porsche, Mercedes-Benz, Audi, Volvo, Citroen, Toyota,
Mazda, Nissan, Honda, Mitsubishi, Suzuki and Isuzu. The Company also has over
300 commercial highway vehicle customers in North America and Europe, including
Trailmobile, Dana/Mack, Mercedes-Benz, Iveco, Strick, Great Dane Trailers,
Freightliner, PACCAR, Volvo/GM, Renault and Western Star. The Company also
produces a variety of non-wheel cast aluminum products for the automotive,
heating equipment and construction industries. Sales of automotive wheel and
brake products comprised approximately 76% of the Company's pro forma combined
net sales in fiscal 1996 (69% wheels and 7% brake components), with the
remaining 24% comprised of commercial highway wheel and brake products (18%) and
non-wheel aluminum castings (6%).
The Company is the #1 or #2 independent manufacturer of its primary
products in the following markets in which it competes. The following table sets
forth the Company's estimated pro forma combined market position in North
America and Europe in 1996:
<TABLE>
<CAPTION>
MARKET
POSITION
--------
<S> <C>
NORTH AMERICA
Automotive Steel Wheels - Including Production by OEMs...... #1
Automotive Cast Aluminum Wheels............................. #2
Automotive Fabricated Aluminum Wheels....................... #1
Automotive Brake Rotors and Drums - Excluding Production by
OEMs...................................................... #2
Commercial Highway Wheels................................... #2
Commercial Highway Brake Hubs and Drums..................... #1
EUROPE
Automotive Steel Wheels - Including Production by OEMs...... #2
Automotive Cast Aluminum Wheels............................. #1
Commercial Highway Wheels................................... #2
</TABLE>
The Company has been active in developing strategic alliances around the
world. These include a 58% owned subsidiary in the Czech Republic and strategic
manufacturing joint ventures in Mexico, Brazil,
4
<PAGE> 8
Venezuela, Portugal, Canada, India, Turkey, Thailand and the United States. The
Company also maintains technical relationships in Thailand and South Africa and
a sales and engineering office in Japan.
As automotive suppliers continue to consolidate worldwide, the Company
intends to strengthen and expand its leadership position in meeting the global
sourcing, quality and engineering requirements of its customers. The Company's
acquisition of Lemmerz, which was consummated on June 30, 1997 (the "Lemmerz
Acquisition") has created significant growth opportunities for the Company,
resulting from the following: (i) the combination of Hayes' strengths in steel
and aluminum wheel manufacturing in North America and Europe with Lemmerz's
steel and cast aluminum wheel manufacturing expertise in Europe; (ii) the
complementary nature of Hayes' and Lemmerz's respective customer bases; (iii)
the combination of Hayes' commercial highway vehicle business in North America
with Lemmerz's in Europe; and (iv) the expansion of the Company's full product
line resulting from the ability to share innovative products and processes
across passenger cars, light trucks and commercial highway vehicles worldwide.
In addition to revenue enhancement, management believes that the Lemmerz
Acquisition will result in annual cost savings of at least $21 million,
primarily as a result of capacity optimization, raw material purchasing savings
and overhead savings. These anticipated Lemmerz Acquisition-related cost savings
are in addition to the $42 million savings related to the rationalization
efforts anticipated to be realized as part of the Motor Wheel Transactions, of
which $13 million have been realized through the end of the first quarter of
fiscal 1997.
BUSINESS STRATEGY
The Company believes that it is well-positioned to realize growth in sales
and net income. The Company will continue to build upon its position as a
leading full-line supplier of wheels and brake components to the global
transportation industry, and expects to enhance this position by integrating the
European operations of Lemmerz. In addition to creating significant anticipated
cost savings and other efficiencies, the Company believes that the Lemmerz
Acquisition provides it with the opportunity to materially extend its automotive
and commercial highway wheel and brake product offerings in Europe. The Company
expects to maintain its leadership position by continuing to offer innovative
new products to increase sales and enhance operating results. The Company
expects to continue its growth and enhance its market leadership by continuing
to implement a strategy based on the following elements:
- ENHANCING STRONG RELATIONSHIPS WITH OEMS AND PURSUING NEW
CONTRACTS. The Company has developed and intends to continue to build upon
strong relationships with its OEM customers which enable it to identify
business opportunities in the early stages of vehicle design. The Company
has established a leadership position as an OEM supplier of automotive and
commercial highway wheels and brakes by maintaining an excellent reputation
for quality, service and innovation. The Company believes that its early
involvement in the design and engineering of new wheel and brake products
as a Tier I supplier has afforded it a competitive advantage in securing
new business and will continue to do so in the future. The Company has
obtained significant firm orders on a number of high-volume vehicle
platforms for periods 1997 through 2000 for incremental new business in
North America and Europe. The Company's enhanced global presence resulting
from the Lemmerz Acquisition should strengthen its ability to offer
worldwide sourcing options to its customers.
- CONTINUING FOCUS ON NEW PRODUCT INNOVATION. The Company believes
that it has an established reputation for developing product and
manufacturing process innovations. For example, the Company is the leading
producer of fabricated aluminum wheels, which are 20% lighter than cast
aluminum wheels. The Company has also recently introduced Full Face Cast
("FFC(TM)") wheels, which are lightweight, highly styled wheels that
combine a cast aluminum face with a fabricated aluminum rim. The Company is
also responsible for several steel wheel product and process innovations,
including the development and introduction of a lightweight steel wheel,
which is 10% to 15% lighter than a traditional steel wheel. The Company
intends to continue its efforts to develop innovative wheel and brake
products and manufacturing processes to better serve customers globally and
improve the Company's product mix with higher margin wheel and brake
products.
5
<PAGE> 9
- CAPITALIZING ON COMPLEMENTARY NATURE OF BUSINESSES. The Lemmerz
Acquisition provides the Company with the opportunity to expand sales and
increase market penetration due to the complementary nature of Hayes' and
Lemmerz's businesses. The Company intends to improve its future performance
by: (i) utilizing Lemmerz's complementary customer relationships to
increase the sales of Hayes' innovative products in Europe; (ii) utilizing
Lemmerz's expertise in lightweight steel wheels in North America; (iii)
drawing on Hayes' expertise in the design and manufacture of lightweight
aluminum wheels to bring greater efficiencies to Lemmerz's aluminum wheel
operations; (iv) capitalizing on Lemmerz's leadership position in the
design and manufacture of wheels for commercial highway vehicles in the
European market to increase Hayes' sales of such products in both Europe
and North America; (v) attaining additional automotive wheel and brake
component sales to OEMs worldwide by building on the Company's existing
relationships and enhanced global position; and (vi) reducing costs of
materials through further economies of scale.
- BENEFITTING FROM CONTINUED INDUSTRY CONSOLIDATION. The worldwide
wheel manufacturing industry is fragmented, particularly in Europe, where
independent producers dominate. The Company believes that as OEMs continue
to outsource and reduce the number of suppliers, there will be
opportunities for further consolidation of this industry. The Company
believes that, through its established presence in these markets,
especially as a result of the Lemmerz Acquisition, it is in a favorable
position to take advantage of future industry consolidation. The Company
intends to pursue selected acquisition opportunities compatible with its
business strategy in North America, Europe, South America and Asia that
would further expand its product offerings or geographical reach.
- ENHANCING PRESENCE IN EMERGING MARKETS. Having established a
leadership position in North America and Europe, the Company plans to
enhance its market position in emerging markets. In October 1996, Hayes
increased its ownership in Hayes Wheels Autokola NH, a.s. ("Autokola"), a
strategic low-cost manufacturing joint venture in the Czech Republic, from
45% to 58%. The Company believes that its Autokola facility will increase
the Company's flexibility and improve its economies in serving its expanded
European steel wheel customers. The Company maintains additional strategic
manufacturing joint ventures in Mexico, Brazil, Venezuela, the United
States, Thailand, India, Canada, Turkey and Portugal, as well as technical
relationships in Thailand and South Africa. The Company believes that its
expanded worldwide manufacturing and strategic joint venture presence
resulting from the Lemmerz Acquisition will enhance its ability to meet the
global sourcing needs of its customers.
- CAPITALIZING ON COST-SAVING OPPORTUNITIES. The Company has
aggressively pursued facility rationalization programs and other
cost-saving opportunities, including the closure of the Mendota, Illinois
and Ypsilanti, Michigan facilities, which were announced prior to the Motor
Wheel Transactions. Subsequent to the Motor Wheel Transactions, the Company
identified further cost rationalization programs, including the closing of
Motor Wheel's former headquarters in Okemos, Michigan and the Company's
Romulus, Michigan wheel plant. The savings related to the Motor Wheel
Transactions, including those initially targeted and subsequently
identified, total $42 million, approximately $13 million of which have been
realized through the end of the first quarter of fiscal 1997. Management
expects the remaining $29 million of such savings to be fully reflected in
the Company's fiscal 1998 financial results. In addition, management
expects actions undertaken in connection with the Lemmerz Acquisition to
result in annual cost savings of at least $21 million, which are
anticipated to be fully reflected in the Company's fiscal 1999 financial
results. The Company will continue to optimize the use of its manufacturing
capacity and seek further cost savings.
THE LEMMERZ ACQUISITION
On June 30, 1997, Hayes acquired Lemmerz, which, prior to its acquisition
by Hayes, was the leading full-line designer and manufacturer of steel and
aluminum wheels for passenger cars, light trucks and commercial highway vehicles
in Europe. Hayes acquired Lemmerz in exchange for the payment to the
shareholders of Lemmerz (the "Lemmerz Shareholders") of (i) $200 million in cash
(the "Cash Consideration") and (ii) a total of five million shares of the
Company's Series A Convertible Participating Preferred
6
<PAGE> 10
Stock, par value $.01 per share (the "Series A Preferred Stock"), which, upon
receipt of stockholder approval at the Company's Annual Meeting of Stockholders
currently scheduled to be held on October 22, 1997 (the "1997 Annual Meeting"),
will automatically convert (the "Conversion") into five million shares of the
common stock, par value $.01 per share, of the Company (the "Common Stock").
Stockholders who currently hold approximately 58% of the outstanding Common
Stock have delivered irrevocable proxies to Mr. Horst Kukwa-Lemmerz, one of the
Lemmerz Shareholders who has agreed to vote such shares in favor of the
Conversion at the 1997 Annual Meeting. Immediately after the Conversion, the
shares of Common Stock received by the Lemmerz Shareholders in the Conversion
will constitute approximately 16.6% of the then outstanding Common Stock. As
used herein, "Lemmerz Transactions" means (i) the Lemmerz Acquisition, (ii) the
financing thereof, including the execution of the Amended Credit Agreement (as
defined herein) and the issuance of the Old June Notes (the proceeds of which
were used to finance the Lemmerz Acquisition and refinance certain indebtedness
under the Amended Credit Agreement), (iii) the issuance of the Old July Notes
(the proceeds of which were used to refinance certain indebtedness under the
Amended Credit Agreement) and (iv) the public offering of an aggregate of
3,779,502 shares of Common Stock (excluding the over-allotment options granted
by the Company to the underwriters of such offering) by the Company and certain
selling stockholders, which was consummated on August 26, 1997 (the "Equity
Offering").
In connection with the Lemmerz Acquisition, the Company has proposed to
change its name to Hayes Lemmerz International, Inc. This proposal will be
submitted to the Company's stockholders at the 1997 Annual Meeting.
RECENT DEVELOPMENTS
On July 25, 1997, the Company announced that it had agreed to purchase the
assets of Bosch Braking Systems Corporation's heavy-duty hub-and-drum and
medium- and heavy-duty steel wheel businesses. These two businesses had combined
1996 sales of approximately $44 million. The Company believes that this
acquisition, which is expected to close during the third quarter of 1997, will
complement its commercial highway vehicle wheel and brake business.
7
<PAGE> 11
THE EXCHANGE OFFER
Securities Offered......... Up to (i) $250,000,000 principal amount of New June
Notes and (ii) $150,000,000 principal amount of
New July Notes. The terms of the New Notes are
identical in all material respects with the terms
of the Old Notes, except that the terms of the
New Notes do not include certain transfer
restrictions, registration rights and Additional
Interest provisions, as summarized below under
"Description of the Notes -- Registration
Rights."
The Exchange Offer......... The New June Notes and New July Notes are being
offered in exchange for a like principal amount
of Old June Notes and Old July Notes,
respectively, that are properly tendered and
accepted. The issuance of the New Notes is
intended to satisfy obligations of the Company
contained in the Registration Rights Agreements
(as defined herein). For procedures for
tendering, see "The Exchange Offer."
Tenders, Expiration Date;
Withdrawal............... The Exchange Offer will expire at 5:00 p.m., New
York City time, on , 1997, or such
later date and time to which it is extended (the
"Expiration Date"). Each Holder tendering Old
Notes must acknowledge that it is not engaging
in, nor intends to engage in, a distribution of
the New Notes. The tender of Old Notes pursuant
to the Exchange Offer may be withdrawn at any
time prior to the Expiration Date. Any Old Notes
not accepted for exchange for any reason will be
returned without expense to the tendering Holder
thereof as promptly as practicable after the
expiration or termination of the Exchange Offer.
Federal Income Tax
Consequences............. The exchange of Old Notes for New Notes pursuant to
the Exchange Offer will not result in any income,
gain or loss for federal income tax purposes. See
"Certain Federal Income Tax Considerations."
Use of Proceeds............ There will be no proceeds to the Company from the
exchange pursuant to the Exchange Offer. The net
proceeds to the Company from the sale of the Old
Notes were used to partially fund the Lemmerz
Acquisition and to refinance certain Indebtedness
under the Amended Credit Agreement.
Exchange Agent............. The Bank of New York is serving as the Exchange
Agent in connection with the Exchange Offer (the
"Exchange Agent").
CONSEQUENCES OF EXCHANGING OLD NOTES PURSUANT TO THE EXCHANGE OFFER
Based on interpretations by the staff of the Commission in no-action
letters issued to third parties, generally Holders of Old Notes (other than any
Holder which is an "affiliate" of the Company within the meaning of Rule 405
under the Securities Act) who exchange their Old Notes for New Notes pursuant to
the Exchange Offer may offer such New Notes for resale, resell such New Notes,
and otherwise transfer such New Notes without compliance with the registration
and prospectus delivery provisions of the Securities Act; provided that such New
Notes are acquired in the ordinary course of the Holders' business and such
Holders, other than brokers-dealers, are not engaged in, do not intend to engage
in, and have no arrangement or understanding with any person to participate in,
a distribution of such New Notes. The Company, however, does not intend to
request the Commission to consider, and the Commission has not considered, the
Exchange Offer in the context of a no-action letter and there can be no
assurance that the staff of the Commission would make a similar determination
with respect to the Exchange Offer as in such other circumstances.
8
<PAGE> 12
Each broker-dealer that receives New Notes for its own account in exchange
for Old Notes must acknowledge that such Old Notes were acquired by such
broker-dealer as a result of market making activities or other trading
activities and that it will deliver a prospectus in connection with any resale
of such New Notes. See "Plan of Distribution."
To comply with the securities laws of certain jurisdictions, it may be
necessary to qualify for sale or register thereunder the New Notes prior to
offering or selling such New Notes. The Company and the Guarantors have agreed
to use their best efforts, pursuant to the Registration Rights Agreements and
subject to certain specified limitations therein, to register or qualify the New
Notes held by broker-dealers for offer or sale under the securities or blue sky
laws of such jurisdictions as any such holder of such New Notes reasonably
requests in writing. Unless the Company is so requested, the Company does not
intend to register or qualify the sale of the New Notes in any such
jurisdictions.
If a Holder of Old Notes does not exchange such Old Notes for New Notes
pursuant to the Exchange Offer, such Old Notes will continue to be subject to
provisions of the Indenture (as defined herein) governing such Old Notes
regarding transfer and exchange of the Old Notes and the restrictions on
transfer contained in the legend on the Old Notes. In general, Old Notes may not
be offered or sold unless registered under the Securities Act, except pursuant
to an exemption from, or in a transaction not subject to, the Securities Act and
applicable state securities laws. The Company does not currently anticipate that
it will take any action to register Old Notes under the Securities Act. See "The
Exchange Offer -- Consequences of Failure to Exchange" and "Description of the
Notes -- Registration Rights."
9
<PAGE> 13
SUMMARY DESCRIPTION OF THE NEW NOTES
The terms of the New Notes and the Old Notes are identical in all material
respects, except that the New Notes do not include certain transfer
restrictions, registration rights and Additional Interest provisions included in
the Old Notes. See "Description of the Notes -- Registration Rights." Except as
described below, the New June Notes and the New July Notes are identical in all
material respects.
Securities Offered......... $250,000,000 principal amount of 9 1/8% Series B
Senior Subordinated Notes due 2007 and
$150,000,000 principal amount of 9 1/8% Series B
Senior Subordinated Notes due 2007.
Maturity Date.............. July 15, 2007.
Interest Rate.............. The New Notes will bear interest at a rate of
9 1/8% per annum.
Interest Payment Dates..... Interest will be payable semiannually on each
January 15 and July 15, commencing on January 15,
1998.
Ranking.................... The New Notes will be general unsecured obligations
of the Company subordinate in right of payment to
all existing and future Senior Indebtedness (as
defined herein) of the Company, including
indebtedness under the Amended Credit Agreement
and senior in right of payment to all other
subordinated indebtedness of the Company. The New
Notes will rank pari passu with the Old Notes and
the $250 million principal amount of 11% Notes
(as defined herein). At April 30, 1997, after
giving pro forma effect to the Lemmerz
Transactions, the Company and the Guarantors
would have had approximately $322.7 million of
Senior Indebtedness outstanding.
Guarantees................. The New Notes will be unconditionally guaranteed,
on a senior subordinated basis, as to the payment
of principal, premium, if any, and interest,
jointly and severally (the "Guarantees"), by the
Guarantors which will consist of certain of the
Company's material domestic subsidiaries. The
Guarantees will be subordinate to all Senior
Indebtedness of the respective Guarantors.
Optional Redemption........ The New Notes will be redeemable at the option of
the Company, in whole or in part, at any time on
or after July 15, 2002 at the redemption prices
set forth herein, together with accrued and
unpaid interest thereon to the date of
redemption. In addition, the Company, at its
option, may redeem in the aggregate up to 35% of
the original principal amount of June Notes
and/or July Notes at any time prior to July 15,
2000, at a redemption price equal to 109.125% of
the principal amount thereof, plus accrued and
unpaid interest thereon to the redemption date,
with the Net Cash Proceeds (as defined herein) of
one or more Equity Offerings (as defined herein);
provided, however, that at least (i) $162.5
million aggregate principal amount of June Notes
and (ii) $97.5 million aggregate principal amount
of July Notes, as the case may be, remain
outstanding and that such redemption occurs
within 60 days following the closing of any such
Equity Offering.
Change of Control.......... In the event of a Change of Control (as defined
herein), the Company will be required to make an
offer to purchase all outstanding Notes at a
price equal to 101% of the principal amount
thereof, plus accrued and unpaid interest to the
date of purchase. See "Description of the Notes
-- Change of Control Offer." There can be no
assurance that
10
<PAGE> 14
the Company will have sufficient funds or will be
contractually permitted by outstanding Senior
Indebtedness to pay the required purchase price
for all Notes tendered by holders upon a Change
of Control.
Certain Covenants.......... The Indentures contain covenants for the benefit of
the holders of the Notes that, among other
things, restrict the ability of the Company and
its Restricted Subsidiaries (as defined herein)
to: (i) incur additional Indebtedness; (ii) pay
dividends and make distributions; (iii) issue
stock of subsidiaries; (iv) make certain
investments; (v) repurchase stock; (vi) create
liens; (vii) enter into transactions with
affiliates; (viii) merge or consolidate the
Company or the Guarantors; and (ix) transfer or
sell assets. These covenants are subject to a
number of important exceptions. See "Description
of the Notes -- Certain Covenants."
Use of Proceeds............ The Company will not receive any proceeds from the
Exchange Offer. The net proceeds from the sale of
the Old Notes were used to partially fund the
Lemmerz Acquisition and to repay outstanding
Indebtedness under the Amended Credit Agreement.
For more complete information regarding the New Notes, including the
definitions of certain capitalized terms used above, see "Description of the
Notes."
RISK FACTORS
Prospective purchasers of the New Notes should carefully consider the
information set forth under the caption "Risk Factors," and all other
information set forth in this Prospectus, in evaluating an investment in the New
Notes.
11
<PAGE> 15
SUMMARY HISTORICAL FINANCIAL INFORMATION
The following summary historical financial information is derived from the
consolidated historical financial statements of Hayes and Lemmerz and the
unaudited pro forma financial information is derived from the pro forma combined
condensed financial data of the Company incorporated by reference herein. The
historical consolidated financial statements of Hayes for each year in the
three-year period ended January 31, 1997 were audited by KPMG Peat Marwick LLP.
The historical consolidated financial statements of Lemmerz for each year in the
two-year period ended December 31, 1996 were audited by KPMG Deutsche
Treuhand-Gesellschaft Aktiengesellschaft Wirtschaftsprufungsgesellschaft. The
financial information of Hayes for the three-month periods ended April 30, 1997
and 1996, and the financial information of Lemmerz for the three-month period
ended March 31, 1997, is unaudited, but in the opinion of management, reflects
all adjustments necessary for a fair presentation of such information. The
information provided below should be read in conjunction with the consolidated
financial statements and notes thereto of Hayes and Lemmerz, which are
incorporated by reference herein.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEAR ENDED JANUARY 31, APRIL 30,
------------------------------------------- ------------------
PRO FORMA
HAYES 1995 1996 1997 1997 (A) 1996 1997
----- ---- ---- ---- --------- ---- ----
(UNAUDITED)
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales....................................... $537.6 $611.1 $ 778.2 $ 913.1 $156.2 $ 250.2
Cost of goods sold (b).......................... 441.4 513.4 675.2 795.9 133.6 212.2
Marketing, general and administration (c)....... 28.6 29.7 35.9 43.6 7.8 11.2
Engineering and product development (c)......... 5.1 4.7 7.2 8.1 1.8 2.3
Depreciation and amortization................... 29.6 32.7 44.4 50.9 8.8 14.8
Other income, net............................... (0.8) (1.5) (4.5) (5.3) (0.5) (0.7)
Interest expense, net (d)....................... 13.4 15.0 48.5 73.6 3.6 18.4
Net income (loss)............................... 29.9 28.4 (72.9) (88.2) 6.1 3.8
OTHER DATA:
EBITDA (e)(f)................................... $ 92.9 $ 97.5 $ 120.7 $ 133.6 $ 22.3 $ 40.0
Capital expenditures............................ 39.9 43.4 71.4 73.3 23.4 16.7
Ratio of earnings to fixed charges (g).......... 4.2x 3.6x -- -- 3.3x 1.3x
BALANCE SHEET DATA (AT END OF PERIOD):
Total assets.................................... $589.6 $633.9 $1,183.1 $1,183.1 $648.9 $1,153.4
Total debt...................................... 123.0 133.1 715.8 715.8 153.8 711.6
Stockholders' equity (deficit).................. 216.4 245.4 (41.1) (41.1) 251.1 (40.1)
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS YEAR ENDED THREE MONTHS
DECEMBER 31, ENDED DECEMBER 31, ENDED
------------------ MARCH 31, ---------------------- MARCH 31,
LEMMERZ 1995 1996 1997 1995 1996 1997
------- ---- ---- ---- ---- ---- ----
(UNAUDITED) (UNAUDITED)
(U.S. GAAP AND DM IN MILLIONS) (U.S. GAAP AND DOLLARS (H) IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales................................. $671.2 $691.4 $179.5 $468.1 $459.8 $108.2
Cost of goods sold........................ 545.8 567.9 146.0 380.7 377.7 88.0
Marketing, general and administration..... 82.6 75.5 17.4 57.6 50.2 10.5
Engineering and product development....... 12.8 12.6 3.3 8.9 8.4 2.0
Depreciation and amortization............. 44.3 44.0 10.8 30.9 29.3 6.5
Interest expense, net..................... 11.2 8.0 1.8 7.8 5.3 1.1
Net income................................ 23.8 13.8 5.5 16.6 9.2 3.3
OTHER DATA:
EBITDA (e)................................ $ 91.9 $ 87.7 $ 26.0 $ 64.1 $ 58.3 $ 15.7
Capital expenditures...................... 70.4 44.2 10.6 42.8 25.0 6.4
BALANCE SHEET DATA (AT END OF PERIOD):
Total assets.............................. $649.8 $641.8 $651.5 $453.3 $412.8 $392.8
Total debt................................ 120.3 130.8 124.7 83.9 84.1 75.2
Shareholders' equity...................... 163.1 170.4 173.2 113.8 109.6 104.4
</TABLE>
(see footnotes on the following page)
12
<PAGE> 16
- -------------------------
(a) Represents full year results assuming the Motor Wheel Transactions occurred
on February 1, 1996.
(b) Pro forma data includes a $4.6 million adjustment as a result of the
acquisition of Motor Wheel related to the effects of purchase accounting
adjustments and adjustments to reflect adoption of Hayes' accounting
policies and pension and post-retirement benefit cost assumptions.
(c) Pro forma data includes a $0.4 million adjustment related to savings from
personnel reductions at Motor Wheel's Okemos, Michigan corporate
headquarters announced and implemented prior to the consummation of the
Motor Wheel Transactions and the effects of purchase accounting adjustments.
(d) Pro forma data reflects the pro forma interest expense assuming the Motor
Wheel Transactions occurred on February 1, 1996.
(e) EBITDA should not be construed as a substitute for income from operations,
net income or cash flow from operating activities, for the purpose of
analyzing the Company's operating performance, financial position and cash
flows. The Company has presented EBITDA because it is commonly used by
investors to analyze and compare companies on the basis of operating
performance and to determine a company's ability to service debt. See
"Description of the Notes -- Certain Definitions."
(f) Pro forma data includes a $3.1 million adjustment related to savings from
personnel reductions at Motor Wheel's Okemos, Michigan corporate
headquarters announced and implemented prior to the consummation of the
Motor Wheel Transactions and the effects of purchase accounting adjustments.
(g) The ratio of earnings to fixed charges for the fiscal years ended January
31, 1993 and 1994 were 1.2x and 3.9x, respectively. For the fiscal year
ended January 31, 1997, earnings were insufficient to cover fixed charges by
$102.0 million. On a pro forma basis for the fiscal year ended January 31,
1997, earnings were insufficient to cover fixed charges by $122.6 million.
(h) Statement of Operations and Other Data were translated using the average
DM/U.S. dollar exchange rate for the respective year or three-month period
(1.4338 for 1995; 1.5037 for 1996; 1.6586 for 1997). Balance Sheet Data were
translated using the ending DM/U.S. dollar exchange for the respective year
or three-month period (1.4335 for 1995; 1.5548 for 1996; 1.6779 for 1997).
13
<PAGE> 17
SUMMARY UNAUDITED PRO FORMA FINANCIAL DATA
The following table sets forth certain unaudited pro forma financial data
for the Company for the year ended January 31, 1997 and for the three-month
period ended April 30, 1997, which are presented to reflect the pro forma effect
of the Lemmerz Transactions and the Motor Wheel Transactions. The unaudited pro
forma statement of operations data give effect to the Lemmerz Transactions and
the Motor Wheel Transactions as if they had occurred on February 1, 1996. The
unaudited pro forma balance sheet data give effect to the Lemmerz Transactions
as if they had occurred on April 30, 1997. The unaudited pro forma combined
financial data do not purport to be indicative of the results of operations or
financial position of the Company that would have actually been obtained had the
Lemmerz Transactions and the Motor Wheel Transactions been completed as of
February 1, 1996, or which may be obtained in the future. The unaudited pro
forma combined financial data (i) have been derived from and should be read in
conjunction with the pro forma combined condensed financial data and the notes
thereto incorporated by reference in this Prospectus and (ii) should be read in
conjunction with the separate historical consolidated financial statements of
Hayes and Lemmerz and the notes thereto and Management's Discussion and Analysis
of Financial Condition and Results of Operations incorporated by reference
herein.
<TABLE>
<CAPTION>
COMPANY PRO FORMA COMPANY PRO FORMA
YEAR ENDED THREE MONTHS ENDED
JANUARY 31, 1997 (A) APRIL 30, 1997(A)
-------------------- ------------------
(DOLLARS IN MILLIONS)
<S> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales................................................... $1,372.9 $ 358.4
Cost of goods sold.......................................... 1,158.7 297.3
Marketing, general and administration....................... 98.5 22.9
Engineering and product development......................... 16.5 4.3
Depreciation and amortization............................... 70.0 19.6
Interest expense, net....................................... 96.3 24.1
Net income (loss)........................................... (68.1) 6.3
OTHER DATA:
EBITDA (b).................................................. $ 191.9 $ 55.7
Cash interest expense, net.................................. 90.2 22.4
Capital expenditures........................................ 98.3 23.1
BALANCE SHEET DATA (AT END OF PERIOD):
Total assets......................................................................... $1,783.1
Total debt........................................................................... 972.7
Stockholders' equity................................................................. 115.3
</TABLE>
- -------------------------
(a) The pro forma financial data do not reflect (i) any cost savings related to
or synergies that are expected to result from the Lemmerz Acquisition, (ii)
future unrealized cost savings related to, or synergies that are expected to
result from, the Motor Wheel Transactions or (iii) any cost savings related
to the closing of Hayes' Romulus facility.
(b) EBITDA should not be construed as a substitute for income from operations,
net income or cash flow from operating activities, for the purpose of
analyzing the Company's operating performance, financial position and cash
flows. The Company has presented EBITDA because it is commonly used by
investors to analyze and compare companies on the basis of operating
performance and to determine a company's ability to service debt. See
"Description of the Notes -- Certain Definitions."
14
<PAGE> 18
RISK FACTORS
Holders of Old Notes should consider carefully all of the information set
forth and incorporated by reference herein. See "Available Information" and
"Incorporation of Documents By Reference." Holders should particularly evaluate
the following risks before tendering their Old Notes in the Exchange Offer,
although the risk factors set forth below (other than the first two risk
factors) are generally applicable to the New Notes as well as the Old Notes.
CONSEQUENCES OF FAILURE TO EXCHANGE
Issuance of the New Notes in exchange for the Old Notes pursuant to the
Exchange Offer will be made following the prior satisfaction, or waiver, of the
conditions set forth in "The Exchange Offer -- Certain Conditions to the
Exchange Offer" and only after a timely receipt by the Exchange Agent of such
Old Notes and a properly completed and duly executed Letter of Transmittal in
respect of such Old Notes and all other required documents. Therefore, Holders
of Old Notes desiring to tender such Old Notes in exchange for New Notes should
allow sufficient time to ensure timely delivery. Neither the Exchange Agent nor
the Company is under any duty to give notification of defects or irregularities
with respect to the tenders of Old Notes for exchange. Old 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 provisions of the Indenture
regarding transfer and exchange of such Old Notes, the existing restrictions
upon transfer thereof set forth in the legend on the Old Notes and in the
Offering Memorandums dated June 19, 1997 and July 16, 1997, as the case may be,
relating to the Old June Notes and the Old July Notes (the "Offering
Memorandums"). Except in certain limited circumstances with respect to certain
types of Holders of Old Notes, the Company will have no further obligation to
provide for the registration under the Securities Act of such Old Notes. In
general, Old Notes, unless registered under the Securities Act, may not be
offered or sold except pursuant to an exemption from, or in a transaction not
subject to, the Securities Act and applicable state securities laws. The Company
does not currently anticipate that it will take any action to register the Old
Notes under the Securities Act or blue sky laws.
REQUIREMENTS FOR TRANSFER OF NEW NOTES
Based on interpretations by the staff of the Commission, as set forth in
no-action letters issued to third parties, the Company believes that the New
Notes issued in exchange for the Old Notes pursuant to the Exchange Offer may be
offered for resale, resold or otherwise transferred by Holders thereof (other
than any such Holder which is an "affiliate" of the Issuer within the meaning of
Rule 405 under the Securities Act) without compliance with the registration and
prospectus delivery provisions of the Securities Act, provided that such New
Notes are acquired in the ordinary course of such Holders' business and such
Holders have no arrangement with any person to participate in the distribution
(within the meaning of the Securities Act) of such New Notes. Each Holder, other
than a broker-dealer, must acknowledge that 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 New Notes. If any Holder is an affiliate of
the Company, is engaged in or intends to engage in or has any arrangement or
understanding with respect to the distribution of the New Notes to be acquired
pursuant to the Exchange Offer, such Holder (i) could not rely on the applicable
interpretations of the staff of the Commission and (ii) must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transactions. Each broker-dealer that receives New
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 New Notes.
The Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This Prospectus, as it
may be amended or supplemented from time to time, may be used by a broker-dealer
in connection with resales of New Notes received in exchange for Old Notes where
such Old Notes were acquired by such broker-dealer as a result of market making
activities or other trading activities. The Company has agreed that starting on
the Expiration Date and ending on the close of business of the 180th day
following the Expiration Date, it will make this Prospectus available to any
broker-dealer for use in connection with any such resale. See "Plan of
Distribution." However, to comply with the
15
<PAGE> 19
securities laws of certain jurisdictions, if applicable, the New Notes may not
be offered or sold unless they have been registered or qualified for sale in
such jurisdictions or an exemption from registration or qualification is
available and is complied with. The Company has agreed, pursuant to the
Registration Rights Agreements and subject to certain specified limitations
therein, to use its best efforts to register or qualify the New Notes for offer
or sale under the securities or blue sky laws of such jurisdiction as any holder
of the New Notes reasonably requests in writing. Unless the Company is so
requested, the Company does not intend to take any action to register or qualify
the sale of the New Notes in any such jurisdictions. See "The Exchange
Offer -- Consequences of Failure to Exchange."
SIGNIFICANT INDEBTEDNESS
At April 30, 1997, the Company's long-term debt was $972.7 million and its
total stockholders' equity was $115.3 million on a pro forma basis after giving
effect to the Lemmerz Transactions. The Company's high degree of leverage may
have important consequences for the Company, including that: (i) the ability of
the Company to obtain additional financing for acquisitions, working capital,
capital expenditures or other purposes, if necessary, may be impaired or such
financing may not be available on terms favorable to the Company; (ii) a
substantial portion of the Company's cash flow will be used to pay the Company's
interest expense and debt amortization, which will reduce the funds that would
otherwise be available to the Company for its operations and future business
opportunities; (iii) a substantial decrease in net operating cash flows or an
increase in expenses of the Company could make it difficult for the Company to
meet its debt service requirements and force it to modify its operations; (iv)
the Company may be more highly leveraged than its competitors, which may place
it at a competitive disadvantage; and (v) the Company's high degree of leverage
may make it more vulnerable to a downturn in its business or the economy
generally. Any inability of the Company to service its indebtedness or obtain
additional financing, as needed, would have a material adverse effect on the
Company.
RESTRICTIVE DEBT COVENANTS
The Company's Amended Credit Agreement, the Indentures and the indenture
governing the Company's 11% Senior Subordinated Notes due 2006 (the "11% Notes")
(collectively, the "Debt Instruments") contain a number of significant covenants
that, among other things, restrict the ability of the Company to (i) declare
dividends or redeem or repurchase capital stock, (ii) prepay, redeem or purchase
debt, including the Notes, (iii) incur liens and engage in sale-leaseback
transactions, (iv) make loans and investments, (v) incur additional
indebtedness, (vi) amend or otherwise alter debt and other material agreements,
(vii) make capital expenditures, (viii) engage in mergers, acquisitions and
asset sales, (ix) enter into transactions with affiliates and (x) alter the
business it conducts. The indebtedness outstanding under the Amended Credit
Agreement is guaranteed by all of the Company's material domestic subsidiaries
and is secured by a first priority lien on substantially all of the properties
and assets of the Company and its respective domestic subsidiaries, now owned or
acquired later, including a pledge of all of the shares of the Company's
respective existing and future domestic subsidiaries and up to 65% of the shares
of the Company's existing and future foreign subsidiaries which are owned by the
Company or one of its domestic subsidiaries. In addition, under the Amended
Credit Agreement, the Company is also required to comply with financial
covenants with respect to (i) a maximum leverage ratio, (ii) a minimum interest
coverage ratio and (iii) a minimum fixed charge coverage ratio. If the Company
were unable to borrow under its Amended Credit Agreement due to a default or
failure to meet certain specified borrowing base prerequisites for borrowing, it
could be left without sufficient liquidity.
SUBORDINATION
The New Notes will be unsecured and subordinated to the prior payment in
full of all Senior Indebtedness whether currently existing or hereafter
incurred. In addition, the New Notes will rank pari passu in right of payment
with the 11% Notes and the Old Notes. At April 30, 1997, on a pro forma basis
and after giving effect to the Lemmerz Transactions, the aggregate outstanding
principal amount of all Senior Indebtedness would have been approximately $322.7
million. In the event of a bankruptcy, liquidation or reorganization of the
Company, the assets of the Company will be available to pay obligations on the
New
16
<PAGE> 20
Notes only after all Senior Indebtedness has been paid in full, and there may
not be sufficient assets remaining to pay amounts due on any or all of the New
Notes. In addition, the Company may not pay principal or premium, if any, or
interest on the New Notes if any Senior Indebtedness is not paid when due or any
other default on any Senior Indebtedness occurs and the maturity of such Senior
Indebtedness is accelerated in accordance with its terms, unless, in either
case, such amount has been paid in full or the default has been cured or waived
and such acceleration has been rescinded. Further, if any default occurs with
respect to certain Senior Indebtedness and certain other conditions are
satisfied, the Company may not make any payments on the New Notes for a
designated period of time. Finally, if any judicial proceeding is pending with
respect to any such default in payment on any Senior Indebtedness, or other
default with respect to certain Senior Indebtedness, or if the maturity of the
New Notes is accelerated because of a default under the Indentures and such
default constitutes a default with respect to any Senior Indebtedness, the
Company may not make any payment on the New Notes.
INCREASE IN VARIABLE INTEREST RATES; CURRENCY FLUCTUATIONS
A significant portion of the indebtedness of the Company bears interest at
variable rates. Although the Company has entered into interest rate protection
agreements to limit its exposure to increases in such interest rates, such
agreements do not eliminate such exposure to variable rates. Any increase in the
interest rates on the Company's indebtedness will reduce funds available to the
Company for its operations and future business opportunities and will exacerbate
the consequences of the Company's leveraged capital structure.
As a result of the Lemmerz Acquisition, the Company is likely to experience
increased foreign currency exchange gains and losses in the ordinary course of
its business due to the increase in its operations outside the United States. As
a result, fluctuations in the exchange rate between the U.S. dollar, the DM and
the currencies of other countries, in which the Company conducts its business,
may have a material impact on the Company's financial condition or results of
operations. While the Company engages in foreign currency hedging transactions
which moderate the overall effect of such currency exchange rate fluctuations,
the Company expects that such fluctuations will continue, and there can be no
assurance that the Company will be successful in its hedging activities or that
such exchange rate fluctuations will not otherwise have a material adverse
effect on the Company's financial condition or results of operations, or cause
significant fluctuations in quarterly results of operations.
DEPENDENCE ON MAJOR CUSTOMERS
The Company derived approximately 57% of its pro forma combined 1996 net
sales from General Motors, Ford and Chrysler. The Company has been a supplier to
these companies for many years, and continually engages in efforts to improve
and expand on its relations with each of such companies. There can be no
assurance, however, that the Company will maintain or improve these
relationships or that the Company will continue to supply these customers at
current levels. The loss of a significant portion of sales to General Motors,
Ford or Chrysler could have a material adverse effect on the Company's business.
Furthermore, General Motors and Ford manufacture a significant portion of their
own steel wheel requirements and Ford, to a limited extent, manufactures
aluminum wheels for its own use. Although General Motors and Ford have indicated
that they will continue to rely on outside suppliers, they may increase their
internal production of wheels, which could reduce the market for the Company's
products and have an adverse effect on the Company.
CYCLICAL NATURE OF INDUSTRY
The principal operations of the Company are directly related to domestic
and foreign automotive and commercial highway vehicle production. Industry sales
and production are cyclical and can be affected by the strength of the economy
generally, or in specific regions such as North America or Europe, by prevailing
interest rates and by other factors which may have an effect on the level of the
Company's sales.
17
<PAGE> 21
LABOR RELATIONS
At April 30, 1997, approximately 28% of the Company's employees in the
United States were represented by the United Auto Workers ("UAW") or United
Steel Workers ("USW"). Collective bargaining agreements with the UAW or USW
affecting these employees expire at various times through 1997 and 1998. As is
common in many European jurisdictions, substantially all of the Company's
employees in Europe are covered by country-wide collective bargaining
agreements, expiring at various times through 1998. Certain employees of the
Company's major customers are unionized. While the Company believes that its
relations with its employees are satisfactory, a dispute between the Company and
its employees, or between any of its major customers and such customers'
employees, could have a material adverse effect on the Company.
CHALLENGES OF BUSINESS INTEGRATION
The full benefits of the Lemmerz Acquisition will require the integration
of each company's administrative, finance, sales and marketing organizations,
the coordination of each company's sales efforts, and the implementation of
appropriate operations, financial and management systems and controls in order
to capture the efficiencies and the cost reductions that are expected to result
therefrom. This will require substantial attention from the Company's management
team. The diversion of management attention, as well as any other difficulties
which may be encountered in the transition and integration process, could have
an adverse impact on the revenue and operating results of the Company. There can
be no assurance that the Company will be able to integrate the operations of
Hayes and Lemmerz successfully.
On June 10, 1997, the Company filed a notification with the German Federal
Cartel Office regarding the Lemmerz Acquisition. On or about July 11, 1997, the
Federal Cartel Office notified the Company that it intended to conduct a more
detailed examination of the Lemmerz Acquisition. In connection therewith, the
Federal Cartel Office has requested from the Company additional information
regarding the Company's markets and sales, and has also requested related
information from certain of the Company's competitors and customers. All of the
information requested from the Company was submitted on August 15, 1997.
Thereafter, the Federal Cartel Office may elect to conduct additional inquiries
regarding this matter. In the event the Federal Cartel Office elects at that
time to proceed with this matter, there can be no assurances that any actions
taken or required to be taken by the Federal Cartel Office will not have a
material adverse effect on the Company.
LIMITED RECOURSE TO SELLERS
The Company's recourse to the Lemmerz Shareholders under the
indemnification provisions of the Lemmerz Acquisition agreement is extremely
limited. Accordingly, unanticipated events or liabilities related to the Lemmerz
business could materially and adversely affect the Company.
POTENTIAL EXPOSURE TO ENVIRONMENTAL LIABILITIES
The Company's operations are subject to various foreign, federal, state and
local environmental laws, ordinances, and regulations, including those governing
discharges into the air and water, the storage, handling and disposal of solid
and hazardous wastes, the remediation of soil and groundwater contaminated by
petroleum products or hazardous substances or wastes, and the health and safety
of employees ("Environmental Laws"). Under certain Environmental Laws a current
or previous owner or operator of property may be liable for the costs of removal
or remediation of certain hazardous substances or petroleum products on, under
or in such property, without regard to whether the owner or operator knew of, or
caused, the presence of the contaminants, and regardless of whether the
practices that resulted in the contamination were legal at the time they
occurred. The presence of, or failure to remediate properly such substances may
adversely affect the ability to sell or rent such property or to borrow using
such property as collateral. Persons who generate, arrange for the disposal or
treatment of, or dispose of hazardous substances may be liable for the costs of
investigation, remediation or removal of such hazardous substances at or from
the disposal or treatment facility, regardless of whether the such facility is
owned or operated by such person. Additionally, the owner of a site may be
subject to common law claims by third parties based on damages and costs
resulting from
18
<PAGE> 22
environmental contamination emanating from a site. Compliance with Environmental
Laws, stricter interpretations of or amendments to such laws, or more vigorous
enforcement policies by regulatory agencies with respect to them may require
material expenditures by the Company. The nature of the Company's current and
former operations and the history of industrial uses at some of its facilities
expose the Company to the risk of liabilities or claims with respect to
environmental and worker health and safety matters which could have a material
adverse effect on the Company's financial condition or results of operations.
LACK OF A PUBLIC MARKET FOR THE NOTES; RESTRICTIONS ON TRANSFERABILITY
The New Notes will constitute a new issue of securities with no established
trading market. Although the Initial Purchasers have informed the Company that
they currently intend to make a market in the New Notes, they are not obligated
to do so and any such market making may be discontinued at any time without
notice. Accordingly, there can be no assurance as to the development or
liquidity of any market for the Notes. The New Notes are expected to be eligible
for trading by qualified buyers in the PORTAL market. The Company does not
intend to apply for listing of the New Notes on any securities exchange or for
quotation through the National Association of Securities Dealers Automated
Quotation System ("NASDAQ"). The Exchange Offer is not conditioned upon any
minimum or maximum aggregate principal amount of Notes being tendered for
exchange. No assurance can be given as to the liquidity of the trading market
for the Notes, or, in the case of non-tendering holders of Old Notes, the
trading market for the Old Notes following the new exchange offer.
The liquidity of, and trading market for, the New Notes also may be
adversely affected by general declines in the market for similar securities.
Such a decline may adversely affect such liquidity and trading markets
independent of the financial performance of, and prospects for, the Company.
19
<PAGE> 23
THE EXCHANGE OFFER
TERMS OF THE EXCHANGE OFFER; PERIOD FOR TENDERING OLD NOTES
The Old June Notes were sold by the Company to the Initial Purchasers of
the Old June Notes on June 30, 1997 (the "June Issue Date") pursuant to a
Purchase Agreement, dated June 19, 1997, and the Old July Notes were sold by the
Company to the Initial Purchasers of the Old July Notes on July 22, 1997 (the
"July Issue Date") pursuant to a Purchase Agreement, dated July 16, 1997. Upon
the terms and subject to the conditions set forth in this Prospectus and in the
accompanying Letter of Transmittal (which together constitute the Exchange
Offer), the Company will accept for exchange Old Notes which are properly
tendered on or prior to the Expiration Date and not withdrawn as permitted
below. As used herein, the term "Expiration Date" means 5:00 p.m., New York City
time, on , 1997; provided, however, that if the Company, in its
sole discretion, has extended the period of time for which the Exchange Offer is
open, the term "Expiration Date" means the latest time and date to which the
Exchange Offer is extended.
As of the date of this Prospectus, $250,000,000 aggregate principal amount
of the Old June Notes is outstanding and $150,000,000 aggregate principal amount
of the Old July Notes is outstanding. This Prospectus, together with the Letter
of Transmittal, is first being sent on or about the date of this Prospectus, to
all Holders of Old Notes known to the Company. The Company's obligation to
accept Old Notes for exchange pursuant to the Exchange Offer is subject to
certain conditions as set forth under "-- Certain Conditions to the Exchange
Offer."
The Company expressly reserves the right, at any time or from time to time
and subject to its obligations under the Registration Rights Agreements, to
extend the period of time during which the Exchange Offer is open, and thereby
delay acceptance for exchange of any Old Notes, by giving oral or written notice
of such extension to the Holders thereof. During any such extension, all Old
Notes previously tendered will remain subject to the Exchange Offer and may be
accepted for exchange by the Company. Any Old Notes not accepted for exchange
for any reason will be returned without expense to the tendering Holder thereof
as promptly as practicable after the expiration or termination of the Exchange
Offer.
Old Notes tendered in the Exchange Offer must be in denominations of
principal amount of $1,000 and any integral multiple thereof.
The Company expressly reserves the right to amend or terminate the Exchange
Offer, and not to accept for exchange any Old Notes not theretofore accepted for
exchange, upon the occurrence of any of the conditions of the Exchange Offer
specified below under "Certain Conditions to the Exchange Offer." The Company
will give oral or written notice of any extension, amendment, non-acceptance or
termination to the Holders of the Old Notes as promptly as practicable, such
notice in the case of any extension to be issued by means of a press release or
other public announcement no later than 9:00 a.m., New York City time, on the
next business day after the previously scheduled Expiration Date.
PROCEDURES FOR TENDERING OLD NOTES
The tender to the Company of Old Notes by a Holder thereof as set forth
below and the acceptance thereof by the Company will constitute a binding
agreement between the tendering Holder and the Company upon the terms and
subject to the conditions set forth in this Prospectus and in the accompanying
Letter of Transmittal. Except as set forth below, a Holder (which term, for
purposes of the Exchange Offer, includes any participant in the Book-Entry
Transfer Facility (as defined herein) system whose name appears on a security
position listing as the Holder of such Old Notes) who wishes to tender Old Notes
for exchange pursuant to the Exchange Offer must transmit a Letter of
Transmittal, properly completed and duly executed, including all other documents
required by such Letter of Transmittal or (in the case of a book-entry transfer)
an Agent's Message (as defined herein) in lieu of such Letter of Transmittal to
the Exchange Agent at the address set forth below under "-- Exchange Agent" on
or prior to the Expiration Date. In addition, either (i) certificates for such
Old Notes must be received by the Exchange Agent along with the Letter of
Transmittal, (ii) a timely confirmation of a book-entry transfer (a "Book-Entry
Confirmation") of such Old Notes, if such procedure is available, into the
Exchange Agent's account at DTC (as defined herein) (the
20
<PAGE> 24
"Book-Entry Transfer Facility") pursuant to the procedure for book-entry
transfer described below, must be received by the Exchange Agent prior to the
Expiration Date along with the Letter of Transmittal or an Agent's Message in
lieu of a Letter of Transmittal, or (iii) the Holder must comply with the
guaranteed delivery procedures described below. The term "Agent's Message" means
a message, transmitted by the Book-Entry Transfer Facility to and received by
the Exchange Agent and forming a part of a Book-Entry Confirmation, which states
that the Book-Entry Transfer Facility has received an express acknowledgment
from the tendering Participant (as defined herein), which acknowledgment states
that such Participant has received and agrees to be bound by, and make the
representations and warranties contained in, the Letter of Transmittal and that
the Company may enforce such Letter of Transmittal against such Participant.
THE METHOD OF DELIVERY OF OLD NOTES AND THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE HOLDERS. IF SUCH
DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL, PROPERLY INSURED,
WITH RETURN RECEIPT REQUESTED, BE USED. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ASSURE TIMELY DELIVERY. NO LETTER OF TRANSMITTAL OR OLD NOTES SHOULD
BE SENT TO THE COMPANY.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed unless the Old Notes surrendered for exchange
pursuant thereto are tendered (i) by a Holder of the Old Notes who has not
completed the box entitled "Special Issuance Instructions" or "Special Delivery
Instructions" on the Letter of Transmittal or (ii) for the account of an
Eligible Institution (as defined herein). In the event that signatures on a
Letter of Transmittal or a notice of withdrawal, as the case may be, are
required to be guaranteed, such guarantees must be by a firm which is a member
of a registered national securities exchange or a member of the National
Association of Securities Dealers, Inc. or by a commercial bank or trust company
having an office or correspondent in the United States or by such other Eligible
Institution within the meaning of Rule 17(A)(d)-15 of the Exchange Act
(collectively, "Eligible Institutions"). If Old Notes are registered in the name
of a person other than a signer of the Letter of Transmittal, the Old Notes
surrendered for exchange must be endorsed by, or be accompanied by a written
instrument or instruments of transfer, or exchange, in satisfactory form as
determined by the Company in its sole discretion, duly executed by the
registered Holder with the signature thereon guaranteed by an Eligible
Institution.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of Old Notes tendered for exchange will be determined by
the Company in its sole discretion, which determination shall be final and
binding. The Company reserves the absolute right to reject any and all tenders
of any particular Old Note not properly tendered or to not accept any particular
Old Note which acceptance might, in the judgment of the Company or its counsel,
be unlawful. The Company also reserves the absolute right to waive any defects
or irregularities or conditions of the Exchange Offer as to any particular Old
Note either before or after the Expiration Date (including the right to waive
the 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 as
to any particular Old Note either before or after the Expiration Date (including
the Letter of Transmittal and the instructions thereto) by the Company shall be
final and binding on all parties. Unless waived, any defects or irregularities
in connection with tenders of Old Notes for exchange must be cured within such
reasonable period of 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 any defect or irregularity with respect to any tender of Old
Notes for exchange, nor shall any of them incur any liability for failure to
give such notification.
If a Letter of Transmittal is signed by a person or persons other than the
registered Holder or Holders of Old Notes, such Old Notes must be endorsed or
accompanied by appropriate powers of attorney, in either case signed exactly as
the name or names of the registered Holder or Holders that appear on the Old
Notes.
If a Letter of Transmittal or any Old Notes or powers of attorney are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and, unless waived by
the Company, proper evidence satisfactory to the Company of their authority to
so act must be submitted with the Letter of Transmittal.
21
<PAGE> 25
By tendering, each Holder will represent to the Company that, among other
things, the New Notes acquired pursuant to the Exchange Offer are being obtained
in the ordinary course of business of the person receiving such New Notes,
whether or not such person is the Holder, that neither the Holder nor any such
other person has an arrangement or understanding with any person to participate
in the distribution of such New Notes and that neither the Holder nor any such
other person is an "affiliate," as defined under Rule 405 of the Securities Act,
of the Company. If any Holder is an affiliate of the Company, is engaged in or
intends to engage in or has any arrangement with any person to participate in
the distribution of the New Notes to be acquired pursuant to the Exchange Offer,
such Holders (i) could not rely on the applicable interpretations of the staff
of the Commission and (ii) must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any resale
transaction. Each broker-dealer that receives New 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 New Notes. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
ACCEPTANCE OF OLD NOTES FOR EXCHANGE; DELIVERY OF NEW NOTES
Upon satisfaction or waiver of all of the conditions to the Exchange Offer,
the Company will accept, promptly after the Expiration Date, all Old
Notes properly tendered, issue the New Notes promptly after acceptance of the
Old Notes and cause the New Notes to be authenticated by the Trustee. See "--
Certain Conditions to the Exchange Offer" below. For purposes of the Exchange
Offer, the Company shall be deemed to have accepted properly tendered Old Notes
for exchange when, as and if the Company has given oral (promptly confirmed in
writing) or written notice thereof to the Exchange Agent.
For each Old June Note or Old July Note accepted for exchange, the Holder
of such Old Note will receive a New June Note or New July Note, as the case may
be, having a principal amount equal to that of the surrendered Old Note.
Interest on the New June Notes will accrue from (A) the later of (i) the
last interest payment date on which interest was paid on the Old June Notes
surrendered in exchange therefor or, (ii) if the Old June Notes are surrendered
for exchange on a date in a period which includes the record date for an
interest payment date to occur on or after the date of such exchange and as to
which interest will be paid, the date of such interest payment date or (B) if no
interest has been paid on the Old June Notes, from June 30, 1997.
Interest on the New July Notes will accrue from (A) the later of (i) the
last interest payment date on which interest was paid on the Old July Notes
surrendered in exchange therefor or, (ii) if the Old July Notes are surrendered
for exchange on a date in a period which includes the record date for an
interest payment date to occur on or after the date of such exchange and as to
which interest will be paid, the date of such interest payment date or (B) if no
interest has been paid on the Old July Notes, from July 22, 1997.
Pursuant to the Registration Rights Agreements, if (i) a Registration
Statement or Shelf Registration Statement is not filed within 60 days after the
(A) June Issue Date with respect to the Old June Notes or (B) July Issue Date
with respect to the Old July Notes, (ii) a Registration Statement or Shelf
Registration Statement is not declared effective within 120 days after the (A)
June Issue Date with respect to the Old June Notes or (B) July Issue Date with
respect to the Old July Notes, or (iii) either (A) the Company has not exchanged
the (a) New June Notes for all Old June Notes or (b) New July Notes for all Old
July Notes, validly tendered in accordance with the terms of the Exchange Offer
on or prior to 150 days after the (A) June Issue Date with respect to the Old
June Notes or (B) July Issue Date with respect to the Old July Notes or (B) the
Registration Statement ceases to be effective at any time prior to the time that
the Exchange Offer is consummated or (C) if applicable, the Shelf Registration
Statement has been declared effective and such Shelf Registration Statement
ceases to be effective at any time prior to the termination of the Effectiveness
Period (subject to certain exceptions); (each of such events referred to in
clauses (i) through (iii) above is a "Registration Default"), the sole remedy
available to Holders of the Old June Notes or Old July Notes, as the case may
be, will be the assessment of Additional Interest as follows: the per annum
interest rate on such Old Notes will increase by 50 basis points, and the per
annum interest rate will increase by an
22
<PAGE> 26
additional 25 basis points for each subsequent 90-day period during which the
Registration Default remains uncured, up to a maximum additional interest rate
of 200 basis points per annum in excess of the 9 1/8% interest rate. All
Additional Interest will be payable to Holders of such Old Notes in cash on each
January 15 and July 15, commencing with the first such date occurring after any
such Additional Interest commences to accrue, until such Registration Default is
cured. After the date on which such Registration Default is cured, the interest
rate on such Old Notes will revert to the interest rate originally borne by such
Old Notes.
In all cases, issuance of New Notes for Old Notes that are accepted for
exchange pursuant to the Exchange Offer will be made only after timely receipt
by the Exchange Agent of certificates for such Old Notes or a timely Book-Entry
Confirmation of such Old Notes into the Exchange Agent's account at the
Book-Entry Transfer Facility, the Letter of Transmittal properly completed and
duly executed or an Agent's Message in lieu thereof and all other required
documents. If any tendered Old Notes are not accepted for any reason set forth
in the terms and conditions of the Exchange Offer or if Old Notes are submitted
for an amount or quantity greater than the Holder desires to exchange, such
unaccepted or non-exchanged Old Notes will be returned without expense to the
tendering Holder thereof (or, in the case of Old Notes tendered by book-entry
transfer into the Exchange Agent's account at the Book-Entry Transfer Facility
pursuant to the book-entry procedures described below, such non-exchanged Old
Notes will be credited to an account maintained with such Book-Entry Transfer
Facility) as promptly as practicable after the expiration or termination of the
Exchange Offer.
BOOK-ENTRY TRANSFER
The Exchange Agent will request the establishment of accounts with respect
to the Old Notes at the Book-Entry Transfer Facility for purposes of the
Exchange Offer within two business days after the date of this Prospectus unless
an Exchange Agent already has established an account with the Book-Entry
Transfer Facility suitable for the Exchange Offer, and any financial institution
that is a Participant in the Book-Entry Transfer Facility's system may make
book-entry delivery of Old Notes by causing the Book-Entry Transfer Facility to
transfer such Old Notes into the Exchange Agent's account at the Book-Entry
Transfer Facility in accordance with such Book-Entry Transfer Facility's
procedures for transfer.
ALTHOUGH DELIVERY OF OLD NOTES MAY BE EFFECTED THROUGH BOOK-ENTRY TRANSFER
AT THE BOOK-ENTRY TRANSFER FACILITY, THE LETTER OF TRANSMITTAL (OR A FACSIMILE
THEREOF), WITH ANY REQUIRED SIGNATURE GUARANTEES OR AN AGENT'S MESSAGE IN LIEU
THEREOF AND ANY OTHER REQUIRED DOCUMENTS, MUST, IN ANY CASE, BE TRANSMITTED TO
AND RECEIVED BY THE EXCHANGE AGENT AT THE ADDRESS SET FORTH BELOW UNDER
"EXCHANGE AGENT" ON OR PRIOR TO THE EXPIRATION DATE OR THE GUARANTEED DELIVERY
PROCEDURES DESCRIBED BELOW MUST BE COMPLIED WITH.
GUARANTEED DELIVERY PROCEDURES
If a Holder of the Old Notes desires to tender such Old Notes and the Old
Notes are not immediately available, or time will not permit such Holder's Old
Notes or other required documents to reach the Exchange Agent before the
Expiration Date, or the procedure for book-entry transfer cannot be completed on
a timely basis, a tender may be effected if (i) the tender is made through an
Eligible Institution, (ii) prior to the Expiration Date, the Exchange Agent
received from such Eligible Institution the Notice of Guaranteed Delivery,
substantially in the form provided by the Company (by facsimile transmission,
mail or hand delivery), setting forth the name and address of the Holder of Old
Notes and the amount of Old Notes tendered, stating that the tender is being
made thereby and guaranteeing that within five New York Stock Exchange ("NYSE")
trading days after the date of execution of the Notice of Guaranteed Delivery,
the certificates for all physically tendered Old Notes, in proper form for
transfer, or a Book-Entry Confirmation, as the case may be, together with a
properly completed and duly executed Letter of Transmittal (or facsimile thereof
or Agent's Message in lieu thereof) with any required signature guarantees, and
any other documents required by the Letter of Transmittal will be deposited by
the Eligible Institution with the Exchange Agent and (iii) the certificates for
all physically tendered Old Notes, in proper form for transfer, or a Book-Entry
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<PAGE> 27
Confirmation, as the case may be, together with a properly completed and duly
executed Letter of Transmittal (or facsimile thereof or Agent's Message in lieu
thereof) with any required signature guarantees, and all other documents
required by the Letter of Transmittal, are received by the Exchange Agent within
five NYSE trading days after the date of execution of the Notice of Guaranteed
Delivery.
WITHDRAWAL RIGHTS
Tenders of Old Notes may be withdrawn at any time prior to the Expiration
Date.
For a withdrawal to be effective, a written notice of withdrawal must be
received by the Exchange Agent at the address set forth below under "-- Exchange
Agent." Any such notice of withdrawal must specify the name of the person having
tendered the Old Notes to be withdrawn, identify the Old Notes to be withdrawn
(including the principal amount in the case of such Old Notes), and (where
certificates for Old Notes have been transmitted) specify the name in which such
Old Notes are registered, if different from that of the withdrawing Holder. If
certificates for Old Notes have been delivered or otherwise identified to the
Exchange Agent then, prior to the release of such certificates the withdrawing
Holder must also submit the serial numbers of the particular certificates to be
withdrawn and a signed notice of withdrawal with signatures guaranteed by an
Eligible Institution unless such Holder is an Eligible Institution. If Old Notes
have been tendered pursuant to the procedure for book-entry transfer described
above, the executed notice of withdrawal, guaranteed by an Eligible Institution,
unless such Holder is an Eligible Institution, must specify the name and number
of the account at the Book-Entry Transfer Facility to be credited with the
withdrawn Old Notes and otherwise comply with the procedures of such facility.
All questions as to the validity, form and eligibility (including time of
receipt) of such notices will be determined by the Company, whose determination
shall be final and binding on all parties. Any Old Notes so withdrawn will be
deemed not to have been validly tendered for exchange for purposes of the
Exchange Offer. Any Old Notes which have been tendered for exchange but which
are not exchanged for any reason will be returned to the Holder thereof without
cost to such Holder (or, in the case of Old Notes tendered by book-entry
transfer into the Exchange Agent's account at the Book-Entry Transfer Facility
pursuant to the book-entry transfer procedures described above, such Old Notes
will be credited to an account maintained with such Book-Entry Transfer Facility
for the Old Notes) as soon as practicable after withdrawal, rejection of tender
or termination of the Exchange Offer. Properly withdrawn Old Notes may be
retendered by following one of the procedures described under "-- Procedures for
Tendering Old Notes" above at any time on or prior to the Expiration Date.
CERTAIN CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provision of the Exchange Offer, the Company
shall not be required to accept for exchange, or to issue New Notes in exchange
for, the Old Notes and may terminate or amend the Exchange Offer, if at any time
before the acceptance of such Old Notes for exchange or the exchange of the New
Notes for such Old Notes, any of the following events shall occur:
(a) there shall be threatened, instituted or pending any action or
proceeding before, or any injunction, order or decree shall have been
issued by, any court or governmental agency or other governmental
regulatory or administrative agency or commission, (i) seeking to restrain
or prohibit the making or consummation of the Exchange Offer or any other
transaction contemplated by the Exchange Offer, or assessing or seeking any
damages as a result thereof, or (ii) resulting in a material delay in the
ability of the Company to accept for exchange or exchange some or all of
the Old Notes pursuant to the Exchange Offer, or any statute, rule,
regulation, order or injunction shall be sought, proposed, introduced,
enacted, promulgated or deemed applicable to the Exchange Offer or any of
the transactions contemplated by the Exchange Offer by any government or
governmental authority, domestic or foreign, or any action shall have been
taken, proposed or threatened, by any government, governmental authority,
agency or court, domestic or foreign, that in the sole judgment of the
Company might directly or indirectly result in any of the consequences
referred to in clauses (i) or (ii) above or, in the sole judgment of the
Company, might result in the holders of New Notes having obligations with
respect to resales and transfers of New Notes which are greater than those
described in the interpretation of the Commission
24
<PAGE> 28
referred to on the cover page of this Prospectus, or would otherwise make
it inadvisable to proceed with the Exchange Offer;
(b) there shall have occurred (i) any general suspension of or general
limitation on prices for, or trading in, securities on any national
securities exchange or in the over-the-counter market, (ii) any limitation
by any governmental agency or authority which may adversely affect the
ability of the issuer to complete the transactions contemplated by the
Exchange Offer, (iii) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States or any
limitation by any governmental agency or authority which adversely affects
the extension of credit or (iv) a commencement of a war, armed hostilities
or other similar international calamity directly or indirectly involving
the United States, or, in the case of any of the foregoing existing at the
time of the commencement of the Exchange Offer, a material acceleration or
worsening thereof; or
(c) any change (or any development involving a prospective change)
shall have occurred or be threatened in the business, properties, assets,
liabilities, financial condition, operations, results of operations or
prospects of the Company and its subsidiaries taken as a whole that, in the
reasonable judgment of the Company, is or may be adverse to the Company, or
the Company shall have become aware of facts that, in the reasonable
judgment of the Company, have or may have adverse significance with respect
to the value of the Old Notes or the New Notes;
which, in the reasonable judgment of the Company in any case, and regardless of
the circumstances (including any action by the Company) giving rise to any such
condition, makes it inadvisable to proceed with the Exchange Offer and/or with
such acceptance or exchange or with such exchange.
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances giving rise to any such
condition or may be waived by the Company in whole or in part at any time and
from time to time in its sole discretion. The failure by the Company at any time
to exercise any of the foregoing rights shall not be deemed a waiver of any such
right and each such right shall be deemed an ongoing right which may be asserted
at any time and from time to time.
In addition, the Company will not accept for exchange any Old Notes
tendered, and no New Notes will be issued in exchange for any such Old Notes, if
at such time any stop order shall be threatened or in effect with respect to the
Registration Statement of which this Prospectus constitutes a part or the
qualification of the Indenture under the Trust Indenture Act of 1939, as amended
(the "TIA").
EXCHANGE AGENT
The Bank of New York has been appointed as the Exchange Agent in respect of
the Notes for the Exchange Offer. All executed Letters of Transmittal in respect
of the Notes should be directed to the Exchange Agent at the address set forth
below. Questions and requests for assistance, requests for additional copies of
this Prospectus or of the Letter of Transmittal in respect of the Notes and
requests for Notices of Guaranteed Delivery should be directed to the Exchange
Agent addressed as follows:
Delivery To: The Bank of New York, as Exchange Agent
<TABLE>
<C> <C> <C>
By Hand and Overnight By Registered or Certified By Facsimile:
Courier: Mail: (212) 815-6339
101 Barclay Street 101 Barclay Street, 7E Confirm by Telephone:
Corporate Trust Services New York, New York 10286 (212) 815-2742
Window Attention: Reorganization
Ground Level Section
New York, New York 10286
Attention: Reorganization
Section
</TABLE>
DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION VIA
FACSIMILE OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
25
<PAGE> 29
FEES AND EXPENSES
The Company will not make any payment to brokers, dealers, or others
soliciting acceptances of the Exchange Offer except for reimbursement of mailing
expenses.
The estimated cash expenses to be incurred in connection with the Exchange
Offer will be paid by the Company and are estimated in the aggregate to be
$ .
TRANSFER TAXES
Holders who tender their Old Notes for exchange will not be obligated to
pay any transfer taxes in connection therewith, except that Holders who instruct
the Company to register New Notes in the name of, or request that Old Notes not
tendered or not accepted in the Exchange Offer be returned to, a person other
than the registered tendering Holder will be responsible for the payment of any
applicable transfer tax thereon.
CONSEQUENCES OF FAILURE TO EXCHANGE
Holders of Old Notes who do not exchange their Old Notes for New Notes
pursuant to the Exchange Offer will continue to be subject to the provisions in
the Indenture governing such Old Notes regarding transfer and exchange of such
Old Notes and the restrictions on transfer of such Old Notes as set forth in the
legend on the Old Notes and as described in the Offering Memorandum pursuant to
which such Old Note was issued as a consequence of the issuance of such Old
Notes pursuant to exemptions from, or in transactions not subject to, the
registration requirements of the Securities Act and applicable state securities
laws. In general, the Old Notes may not be offered or sold, unless registered
under the Securities Act, except pursuant to an exemption from, or in a
transaction not subject to, the Securities Act and applicable state securities
laws. The Company does not currently anticipate that it will take any action to
register the Old Notes under the Securities Act.
Based on interpretations by the staff of the Commission, as set forth in
no-action letters issued to third parties, the Company believes that New Notes
issued in exchange of Old Notes pursuant to the Exchange Offer may be offered
for resale, resold or otherwise transferred by Holders thereof (other than any
such Holder which is an "affiliate" of the Company within the meaning of Rule
405 under the Securities Act) without compliance with the registration and
prospectus delivery provisions of the Securities Act, provided that such New
Notes are acquired in the ordinary course of such Holders' business and such
Holders, other than brokers-dealers, are not engaged in, do not intend to engage
in, and have no arrangement or understanding with any person to participate in,
the distribution (within the meaning of the Securities Act) of such New Notes.
The Company, however, does not intend to request the Commission to consider, and
the Commission has not considered, the Exchange Offer in the context of a
no-action letter and there can be no assurance that the staff of the Commission
would make a similar determination with respect to the Exchange Offer as in such
other circumstances. If any Holder has any arrangement or understanding with
respect to the distribution of the New Notes to be acquired pursuant to the
Exchange Offer, such Holder (i) could not rely on the applicable interpretations
of the staff of the Commission and (ii) must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
resale transaction. Each broker-dealer that receives New Notes for its own
account in exchange for Old Notes must acknowledge that such Old Notes were
acquired by such broker-dealer as a result of market making activities or other
trading activities and that it will deliver a prospectus in connection with any
resale of such New Notes. See "Plan of Distribution."
To comply with the securities laws of certain jurisdictions, it may be
necessary to qualify for sale or register thereunder the New Notes prior to
offering or selling such New Notes. The Company has agreed, pursuant to the
Registration Rights Agreement and subject to certain specified limitations
therein, to use its best efforts to register or qualify the New Notes held by
broker-dealers for offer or sale under the securities or blue sky laws of such
jurisdictions as any such holder of such New Notes reasonably requests in
writing. Unless the Company is so requested, the Company does not intend to
register or qualify the sale of the New Notes in any such jurisdictions.
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<PAGE> 30
DESCRIPTION OF THE NOTES
The Old June Notes were issued, and the New June Notes will be issued,
pursuant to an Indenture, dated as of June 30, 1997 (the "June Indenture"),
among the Company, the Guarantors and The Bank of New York, as trustee (the
"Trustee"). The Old July Notes were issued, and the New July Notes will be
issued, pursuant to an Indenture, dated as of July 22, 1997 (the "July
Indenture," and together with the June Indenture, the "Indentures"), among the
Company, the Guarantors and the Trustee. The terms of the Notes include those
stated in the Indenture governing such Notes and those made part of the
Indentures by reference to the TIA, as in effect on the date of the Indenture
governing such Notes. The Notes are subject to all such terms, and holders of
the Notes are referred to the Indenture governing such Notes and the Securities
Act for a statement of them. The following is a summary of the material terms
and provisions of the Notes. This summary does not purport to be a complete
description of the Notes and is subject to the detailed provisions of, and
qualified in its entirety by reference to, the Notes and the Indentures
(including the definitions contained therein). A copy of the Indentures may be
obtained from the Company by any holder or prospective investor upon request.
Definitions relating to certain capitalized terms are set forth under "--
Certain Definitions" and throughout this description. Capitalized terms that
are used but not otherwise defined herein have the meanings assigned to them
in the Indentures and such definitions are incorporated herein by reference.
GENERAL
The June Notes and the July Notes will be limited in aggregate principal
amount to $250,000,000 and $150,000,000, respectively. The Notes will be general
unsecured obligations of the Company, subordinated in right of payment to Senior
Indebtedness of the Company and senior in right of payment to any current or
future subordinated indebtedness of the Company.
The Notes will be unconditionally guaranteed, on a senior subordinated
basis, as to payment of principal, premium, if any, and interest, jointly and
severally, by the Guarantors (together with each other Restricted Subsidiary
which guarantees payment of the Notes pursuant to the covenant described under
"Limitation on Creation of Subsidiaries").
MATURITY, INTEREST AND PRINCIPAL
The Notes will mature on July 15, 2007. The Notes will bear interest at a
rate of 9 1/8% per annum from the date of original issuance until maturity.
Interest is payable semiannually in arrears on January 15 and July 15,
commencing January 15, 1998, to holders of record of the Notes at the close of
business on the immediately preceding January 1 and July 1, respectively.
OPTIONAL REDEMPTION
The Notes will be redeemable at the option of the Company, in whole or in
part, at any time on or after July 15, 2002 at the following redemption prices
(expressed as a percentage of principal amount), together, in each case, with
accrued and unpaid interest to the redemption date, if redeemed during the
twelve-month period beginning on July 15 of each year listed below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2002........................................................ 104.563%
2003........................................................ 103.042
2004........................................................ 101.521
2005 and thereafter......................................... 100.000
</TABLE>
Notwithstanding the foregoing, the Company may redeem in the aggregate up
to 35% of the original principal amount of the June Notes and/or July Notes at
any time and from time to time prior to July 15, 2000 at a redemption price
equal to 109.125% of the aggregate principal amount so redeemed, plus accrued
interest to the redemption date, out of the Net Cash Proceeds of one or more
Equity Offerings, where with respect to the June Notes, the proceeds to the
Company of any such Equity Offering are at least $35.0 million;
27
<PAGE> 31
provided, that at least (i) $162.5 million of the principal amount of the June
Notes originally issued and (ii) $97.5 million of the principal amount of the
July Notes originally issued, as the case may be, remains outstanding
immediately after the occurrence of any such redemption and that any such
redemption occurs within 60 days following the closing of any such Equity
Offering.
In the event of redemption of fewer than all of the June Notes and/or July
Notes, as the case may be, the Trustee shall select by lot or in such other
manner as it shall deem fair and equitable the Notes to be redeemed. The Notes
will be redeemable in whole or in part upon not less than 30 nor more than 60
days prior written notice, mailed by first class mail to a holder's last address
as it shall appear on the register maintained by the Registrar of the Notes. On
and after any redemption date, interest will cease to accrue on the Notes or
portions thereof called for redemption unless the Company shall fail to redeem
any such Note.
SUBORDINATION
The indebtedness represented by the Notes is, to the extent and in the
manner provided in the Indenture, subordinate in right of payment to the prior
indefeasible payment and satisfaction in full in cash of all existing and future
Senior Indebtedness of the Company. At April 30, 1997, on a pro forma basis
after giving effect to the Lemmerz Transactions, the principal amount of
outstanding Senior Indebtedness of the Company, on a consolidated basis, would
have been approximately $322.7 million.
In the event of any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, arrangement, reorganization or other similar case or
proceeding in connection therewith, relative to the Company or to its creditors,
as such, or to its assets, whether voluntary or involuntary, or any liquidation,
dissolution or other winding-up of the Company, whether voluntary or involuntary
and whether or not involving insolvency or bankruptcy, or any general assignment
for the benefit of creditors or other marshalling of assets or liabilities of
the Company (except in connection with the merger or consolidation of the
Company or its liquidation or dissolution following the transfer of
substantially all of its assets, upon the terms and conditions permitted under
the circumstances described under "-- Merger, Consolidation or Sale of Assets")
(all of the foregoing referred to herein individually as a "Bankruptcy
Proceeding" and collectively as "Bankruptcy Proceedings"), the holders of Senior
Indebtedness of the Company will be entitled to receive payment and satisfaction
in full in cash of all amounts due on or in respect of all Senior Indebtedness
of the Company before the holders of the Notes are entitled to receive or retain
any payment or distribution of any kind on account of the Notes. In the event
that, notwithstanding the foregoing, the Trustee or any holder of Notes receives
any payment or distribution of assets of the Company of any kind, whether in
cash, property or securities, including, without limitation, by way of set-off
or otherwise, in respect of the Notes before all Senior Indebtedness of the
Company is paid and satisfied in full in cash, then such payment or distribution
will be held by the recipient in trust for the benefit of holders of Senior
Indebtedness and will be immediately paid over or delivered to the holders of
Senior Indebtedness or their representative or representatives to the extent
necessary to make payment in full in cash of all Senior Indebtedness remaining
unpaid, after giving effect to any concurrent payment or distribution, or
provision therefor, to or for the holders of Senior Indebtedness. By reason of
such subordination, in the event of liquidation or insolvency, creditors of the
Company who are holders of Senior Indebtedness may recover more, ratably, than
other creditors of the Company, and creditors of the Company who are not holders
of Senior Indebtedness or of the Notes may recover more, ratably, than the
holders of the Notes.
No payment or distribution of any assets or securities of the Company or
any Restricted Subsidiary of any kind or character (including, without
limitation, cash, property and any payment or distribution which may be payable
or deliverable by reason of the payment of any other Indebtedness of the Company
being subordinated to the payment of the Notes by the Company) may be made by or
on behalf of the Company or any Restricted Subsidiary, including, without
limitation, by way of set-off or otherwise, for or on account of the Notes, or
for or on account of the purchase, redemption, defeasance or other acquisition
of the Notes, and neither the Trustee nor any holder or owner of any Notes shall
take or receive from the Company or any Restricted Subsidiary, directly or
indirectly in any manner, payment in respect of all or any portion of the Notes
following the delivery by the representative of the holders of Designated Senior
Indebtedness under or in respect of the Amended Credit Agreement, for so long as
there shall exist any Designated Senior Indebtedness under or in
28
<PAGE> 32
respect of the Amended Credit Agreement, and thereafter, the holders of
Designated Senior Indebtedness (in either such case, the "Representative") to
the Trustee of written notice of (i) the occurrence of a Payment Default on
Designated Senior Indebtedness or (ii) the occurrence of a Non-Payment Event of
Default on Designated Senior Indebtedness and the acceleration of the maturity
of Designated Senior Indebtedness in accordance with its terms and in any such
event, such prohibition shall continue until such Payment Default is cured,
waived in writing or ceases to exist or such acceleration has been rescinded or
otherwise cured. At such time as the prohibition set forth in the preceding
sentence shall no longer be in effect, subject to the provisions of the
following paragraph, the Company shall resume making any and all required
payments in respect of the Notes, including any missed payments.
Upon the occurrence of a Non-Payment Event of Default on Designated Senior
Indebtedness, no payment or distribution of any assets or securities of the
Company of any kind or character (including, without limitation, cash, property
and any payment or distribution which may be payable or deliverable by reason of
the payment of any other Indebtedness of the Company being subordinated to the
payment of the Notes by the Company) may be made by or on behalf of the Company,
including, without limitation, by way of set-off or otherwise, for or on account
of the Notes, or for or on account of the purchase, redemption, defeasance or
other acquisition of Notes, and neither the Trustee nor any holder or owner of
any Notes shall take or receive from the Company, directly or indirectly in any
manner, payment in respect of all or any portion of the Notes, for a period (a
"Payment Blockage Period") commencing on the date of receipt by the Trustee of
written notice from the Representative of such Non-Payment Event of Default
unless and until (subject to any blockage of payments that may then be in effect
under the preceding paragraph) the earliest of (x) more than 179 days shall have
elapsed since receipt of such written notice by the Trustee, (y) such
Non-Payment Event of Default shall have been cured or waived in writing or shall
have ceased to exist or such Designated Senior Indebtedness shall have been paid
in full or (z) such Payment Blockage Period shall have been terminated by
written notice to the Company or the Trustee from the Representative, after
which, in the case of clause (x), (y) or (z), the Company shall resume making
any and all required payments in respect of the Notes, including any missed
payments. Notwithstanding any other provision of the Indentures, in no event
shall a Payment Blockage Period commenced in accordance with the provisions of
the Indentures described in this paragraph extend beyond 179 days from the date
of the receipt by the Trustee of the notice referred to above (the "Initial
Blockage Period"). Any number of additional Payment Blockage Periods may be
commenced during the Initial Blockage Period; provided, however, that no such
additional Payment Blockage Period shall extend beyond the Initial Blockage
Period. After the expiration of the Initial Blockage Period, no Payment Blockage
Period may be commenced until at least 180 consecutive days have elapsed from
the last day of the Initial Blockage Period. Notwithstanding any other provision
of the Indentures, no event of default with respect to Designated Senior
Indebtedness (other than a Payment Default) which existed or was continuing on
the date of the commencement of any Payment Blockage Period initiated by the
Representative shall be, or be made, the basis for the commencement of a second
Payment Blockage Period initiated by the Representative, whether or not within
the Initial Blockage Period, unless such event of default shall have been cured
or waived for a period of not less than 90 consecutive days.
Each Guarantee will, to the extent set forth in the Indentures, be
subordinate in right of payment to the prior payment in full of all Senior
Indebtedness of the respective Guarantor, including obligations of such
Guarantor with respect to the Amended Credit Agreement (including any guarantee
thereof), and will be subject to the rights of holders of Designated Senior
Indebtedness of such Guarantor to initiate blockage periods, upon terms
substantially comparable to the subordination of the Notes to all Senior
Indebtedness of the Company.
If the Company or any Guarantor fails to make any payment on the Notes or
any Guarantee, as the case may be, when due or within any applicable grace
period, whether or not on account of payment blockage provisions, such failure
would constitute an Event of Default under the Indenture governing such Notes
and would enable the holders of such Notes to accelerate the maturity thereof.
See "-- Events of Default."
A holder of Notes by his acceptance of Notes agrees to be bound by such
provisions and authorizes and expressly directs the Trustee, on his behalf, to
take such action as may be necessary or appropriate to
29
<PAGE> 33
effectuate the subordination provided for in the Indenture and appoints the
Trustee his attorney-in-fact for such purpose.
CERTAIN COVENANTS
The Indentures contain, among others, the following covenants. Except as
otherwise specified, all of the covenants described below appear in both
Indentures.
Limitation on Additional Indebtedness
The Company will not, and will not permit any Restricted Subsidiary of the
Company to, directly or indirectly, incur (as defined) any Indebtedness
(including Acquired Indebtedness) other than Permitted Indebtedness.
Notwithstanding the foregoing, the Company and its Restricted Subsidiaries
may incur Indebtedness (including Acquired Indebtedness), if (i) after giving
effect to the incurrence of such Indebtedness and the receipt and application of
the proceeds thereof, 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 in accordance
with the further provisions of this paragraph) is greater than 2.0 to 1 if the
Indebtedness is incurred prior to July 15, 1999 and 2.25 to 1 if the
Indebtedness is incurred thereafter 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. For purposes of computing the Fixed Charge
Coverage Ratio, (A) if the Indebtedness which is the subject of a determination
under this provision is Acquired Indebtedness, or Indebtedness incurred in
connection with the simultaneous acquisition (by way of merger, consolidation or
otherwise) of any Person, business, property or assets (an "Acquisition"), then
such ratio shall be determined by giving effect to (on a pro forma basis, as if
the transaction had occurred at the beginning of the four-quarter period used to
make such calculation) to both the incurrence or assumption of such Acquired
Indebtedness or such other Indebtedness and the inclusion in the Company's
EBITDA of the EBITDA of the acquired Person, business, property or assets, (B)
if any Indebtedness outstanding or to be incurred (x) bears a floating rate of
interest, the interest expense on such Indebtedness shall be calculated as if
the rate in effect on the date of determination had been the applicable rate for
the entire period (taking into account on a pro forma basis any Interest Rate
Agreement applicable to such Indebtedness if such Interest Rate Agreement has a
remaining term as at the date of determination in excess of 12 months), (y)
bears, at the option of the Company or a Restricted Subsidiary, a fixed or
floating rate of interest, the interest expense on such Indebtedness shall be
computed by applying, at the option of the Company or such Restricted
Subsidiary, either a fixed or floating rate and (z) was incurred under a
revolving credit facility, the interest expense on such Indebtedness shall be
computed based upon the average daily balance of such Indebtedness during the
applicable period, (C) for any quarter prior to July 2, 1996 included in the
calculation of such ratio, such calculation shall be made on a pro forma basis,
giving effect to the acquisition by the Company of Motor Wheel, the issuance of
the Notes, the incurrence of Indebtedness under the Credit Agreement and the use
of the net proceeds therefrom as if the same had occurred at the beginning of
the four-quarter period used to make such calculation, (D) for any quarter
included in the calculation of such ratio prior to the date that any Asset Sale
was consummated, or that any Indebtedness was incurred, or that any Acquisition
was effected, by the Company or any of its Subsidiaries, such calculation shall
be made on a pro forma basis, giving effect to each Asset Sale, incurrence of
Indebtedness or Acquisition, as the case may be, and the use of any proceeds
therefrom, as if the same had occurred at the beginning of the four quarter
period used to make such calculation and (E) the Fixed Charge Coverage Ratio
shall not take into account Permitted Indebtedness that is incurred at the same
time as Indebtedness under this paragraph.
Limitation on Foreign Indebtedness
The Company will not permit any Restricted Subsidiary of the Company which
is not a Guarantor to, directly or indirectly, incur any Indebtedness (including
Acquired Indebtedness) other than Permitted Indebtedness set forth in clauses
(i) through (x) and (xii) of the definition thereof unless (i) the Indebtedness
is incurred, denominated and payable in the local currencies of the
jurisdictions of the operations
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of the Restricted Subsidiary incurring such Indebtedness or of the business or
the location of assets being acquired with the proceeds of such Indebtedness;
provided, however, that any Indebtedness permitted to be incurred in a Western
European currency pursuant to this clause (i) may be incurred in any Western
European currency; provided, further, that any Restricted Subsidiary whose
operations are located in Mexico can also incur Indebtedness denominated and
payable in U.S. dollars, (ii) 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 ratio of Foreign EBITDA to Foreign
Interest Expense (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 3.0 to 1 and (II) the ratio of the Company's
Adjusted EBITDA to Consolidated Fixed Charges (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 if the
Indebtedness is incurred prior to July 15, 1999 and 2.25 to 1 if the
Indebtedness is incurred thereafter 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 if the Indebtedness is
incurred prior to July 15, 1999 and 2.25 to 1 if the Indebtedness is incurred
thereafter, and (iii) 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 (ii)(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 (ii)(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 the covenant
described under "Limitation on Additional Indebtedness."
Limitation on Restricted Payments
The Company will not make, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, make, any Restricted Payment, unless:
(a) no Default or Event of Default shall have occurred and be
continuing at the time of or immediately after giving effect to such
Restricted Payment;
(b) immediately after giving pro forma effect to such Restricted
Payment, the Company could incur $1.00 of additional Indebtedness (other
than Permitted Indebtedness) under the covenant set forth under "Limitation
on Additional Indebtedness"; and
(c) immediately after giving effect to such Restricted Payment, the
aggregate of all Restricted Payments declared or made after July 2, 1996
does not exceed the sum of (1) $5.0 million plus (2) 50% of the Company's
Consolidated Net Income (or in the event that such Consolidated Net Income
shall be a deficit, minus 100% of such deficit) after July 2, 1996, plus
(3) 100% of the aggregate Net Cash Proceeds from the issue or sale, after
July 2, 1996, of Capital Stock (other than Disqualified Capital Stock or
Capital Stock of the Company issued to any Subsidiary of the Company) of
the Company or any Indebtedness or other securities of the Company
convertible into or exercisable or exchangeable for Capital Stock (other
than Disqualified Capital Stock) of the Company which has been so converted
or exercised or exchanged, as the case may be. For purposes of determining
under this clause (c) the amount expended for Restricted Payments, cash
distributed shall be valued at the face amount thereof and property other
than cash shall be valued at its fair market value.
The provisions of this covenant shall not prohibit (i) the payment of any
distribution within 60 days after the date of declaration thereof, if at such
date of declaration such payment would comply with the provisions of the
Indenture, (ii) the retirement of any shares of Capital Stock of the Company or
Indebtedness which is subordinated in right of payment to the Notes by
conversion into, or by or in exchange for, shares of Capital
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Stock (other than Disqualified Capital Stock), or out of, the Net Cash Proceeds
of the substantially concurrent sale (other than to a Subsidiary of the Company)
of other shares of Capital Stock of the Company (other than Disqualified Capital
Stock), (iii) the redemption, repayment or retirement of Indebtedness of the
Company subordinated in right of payment to the Notes in exchange for, by
conversion into, or out of the Net Cash Proceeds of, a substantially concurrent
sale or incurrence of Indebtedness (other than any Indebtedness owed to a
Subsidiary) of the Company that is contractually subordinated in right of
payment to the Notes to at least the same extent as the Indebtedness being
redeemed, repaid or retired, (iv) the retirement of any shares of Disqualified
Capital Stock by conversion into, or by exchange for, shares of Disqualified
Capital Stock, or out of the Net Cash Proceeds of the substantially concurrent
issuance or sale (other than to a Subsidiary of the Company) of other shares of
Disqualified Capital Stock, or (v) the making of Investments in Unrestricted
Subsidiaries and joint ventures, provided that the Net Investment therein made
since July 2, 1996 shall not exceed an aggregate of $25 million and (vi) the
making of Investments funded with the transfer of excess fixed assets no longer
necessary in the conduct of the business of the Company and its Subsidiaries in
an aggregate amount not to exceed $15 million; provided, however, that in
calculating the aggregate amount of Restricted Payments made subsequent to July
2, 1996, the amount of Net Investments made pursuant to clauses (v) and (vi)
shall be included in the calculation.
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 the covenant "Limitation on Restricted Payments" were computed,
which calculations may be based upon the Company's latest available financial
statements, and that no Default or Event of Default exists and is continuing and
no Default or Event of Default will occur immediately after giving effect to any
Restricted Payments.
Limitation on Other Senior Subordinated Debt
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, incur, contingently or otherwise, any
Indebtedness (other than the Notes and the Guarantees, as the case may be) that
is both (i) subordinate in right of payment to any Senior Indebtedness of the
Company or its Restricted Subsidiaries, as the case may be, and (ii) senior in
right of payment to the Notes and the Guarantees, as the case may be. For
purposes of this covenant, Indebtedness is deemed to be senior in right of
payment to the Notes and the Guarantees, as the case may be, if it is not
explicitly subordinate in right of payment to Senior Indebtedness at least to
the same extent as the Notes and the Guarantees, as the case may be, are
subordinate to Senior Indebtedness.
Limitations on Liens
The Company will not, and will not permit any of its Restricted
Subsidiaries to, create, incur or otherwise cause or suffer to exist or become
effective any Liens of any kind upon any Property of the Company or any
Restricted Subsidiary, now owned or hereafter acquired, which secures
Indebtedness pari passu with or subordinated to the Notes unless (i) if such
Lien secures Indebtedness which is pari passu with the Notes, then the Notes are
secured on an equal and ratable basis with the obligations so secured until such
time as such obligation is no longer secured by a Lien or (ii) if such Lien
secures Indebtedness which is subordinated to the Notes, any such Lien shall be
subordinated to the Lien granted to the Holders of the Notes in the same
collateral as that securing such Lien to the same extent as such subordinated
Indebtedness is subordinated to the Notes.
Limitation on Transactions with Affiliates
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or suffer to exist any
transaction or series of related transactions (including, without limitation,
the sale, purchase, exchange or lease of assets, property or services) with any
Affiliate (including entities in which the Company or any of its Restricted
Subsidiaries own a minority interest) or holder of 10% or more of the Company's
Common Stock (an "Affiliate Transaction") or extend, renew, waive or otherwise
modify the terms of any Affiliate Transaction entered into prior to the date the
respective Notes were originally issued
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unless (i) such Affiliate Transaction is between or among the Company and its
Wholly Owned Subsidiaries; or (ii) the terms of such Affiliate Transaction are
fair and reasonable to the Company or such Restricted Subsidiary, as the case
may be, and the terms of such Affiliate Transaction are at least as favorable as
the terms which could be obtained by the Company or such Restricted Subsidiary,
as the case may be, in a comparable transaction made on an arm's-length basis
between unaffiliated parties. In any Affiliate Transaction involving an amount
or having a value in excess of $2 million which is not permitted under clause
(i) above, the Company must obtain a resolution of the board of directors
certifying that such Affiliate Transaction complies with clause (ii) above. In
transactions with a value in excess of $10 million which are not permitted under
clause (i) above, the Company or such Restricted Subsidiary must obtain a
written opinion as to the fairness of such a transaction from an independent
investment banking firm.
The foregoing provisions will not apply to (i) any Restricted Payment that
is not prohibited by the provisions described under "Limitations on Restricted
Payments" contained herein, (ii) reasonable and customary fees paid by the
Company or its Restricted Subsidiaries to their respective directors or (iii)
customary investment banking, underwriting, placement agent or financial advisor
fees paid in connection with services rendered to the Company or its
Subsidiaries.
Limitation on Creation of Subsidiaries
The Company shall not create or acquire, nor permit any of its Restricted
Subsidiaries to create or acquire, any Subsidiary other than (i) a Restricted
Subsidiary existing as of the date of the Indenture, (ii) a Restricted
Subsidiary conducting a business similar or reasonably related to the business
of the Company and its Subsidiaries as conducted on the date the respective
Notes were originally issued, or (iii) an Unrestricted Subsidiary; provided,
however, that each Restricted Subsidiary which is a Domestic Subsidiary acquired
or created pursuant to clause (ii) shall have executed a guarantee, satisfactory
in form and substance to the Trustee (and with such documentation relating
thereto as the Trustee shall require, including, without limitation, a
supplement or amendment to the Indentures and opinions of counsel as to the
enforceability of such guarantee), pursuant to which such Restricted Subsidiary
shall become a Guarantor. Neither the Company nor any of the Guarantors will
transfer any assets to a Domestic Restricted Subsidiary which is not a Guarantor
unless such Restricted Subsidiary simultaneously with such transfer executes a
guarantee satisfactory in form and substance to the Trustee (together with the
documentation referred to in the preceding sentence) pursuant to which such
Restricted Subsidiary shall become a Guarantor. See "-- General."
Limitation on Certain Asset Sales
The Company will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless (i) the Company or its
Restricted Subsidiaries, as the case may be, receives consideration at the time
of such sale or other disposition at least equal to the fair market value
thereof (as determined in good faith by the Company's board of directors, and
evidenced by a board resolution); (ii) not less than 75% of the consideration
received by the Company or its Subsidiaries, as the case may be, is in the form
of cash or Temporary Cash Investments other than in the case where the Company
or a Restricted Subsidiary is exchanging assets held by the Company or such
Restricted Subsidiary for assets held by another Person, provided that any
Investment received in such exchange would be permitted under clause (b) below;
and (iii) the Asset Sale Proceeds received by the Company or such Restricted
Subsidiary are applied (a) first, to the extent the Company elects, or is
required, to prepay, repay or purchase any then existing Senior Indebtedness of
the Company or any Restricted Subsidiary within 180 days following the receipt
of the Asset Sale Proceeds from any Asset Sale, provided that any such repayment
shall result in a permanent reduction of the commitments, if any, thereunder in
an amount equal to the principal amount so repaid; (b) second, to repurchase 11%
Notes within 270 days following the receipt of the Asset Sale Proceeds from any
Asset Sale, tendered pursuant to the offer to repurchase required under the
terms of the 11% Notes Indenture; (c) third, with respect to the July Notes, to
repurchase the June Notes within 270 days following the receipt of the Asset
Sale Proceeds from any Asset Sale, tendered pursuant to the offer to repurchase
required under the terms of the June Indentures; (d) fourth, to the extent of
the balance of Asset Sale Proceeds after application as described in clauses
(a), (b) and, with respect to the July Notes, (c) above, to the extent the
Company elects,
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to an investment in assets used or useful in businesses similar or reasonably
related to the business of the Company or Restricted Subsidiary as conducted on
the date the respective Notes were originally issued (either directly or
indirectly through the purchase of Capital Stock or other securities of a Person
holding such assets), provided that such investment occurs or the Company or a
Restricted Subsidiary enters into contractual commitments to make such
investment, subject only to customary conditions (other than the obtaining of
financing), on or prior to the 181st day following receipt of such Asset Sale
Proceeds (the "Reinvestment Date") and Asset Sale Proceeds contractually
committed are so applied within 270 days following the receipt of such Asset
Sale Proceeds; and (e) fifth, if on the Reinvestment Date with respect to any
Asset Sale, the Available Asset Sale Proceeds exceed $10 million, the Company
shall apply an amount equal to such Available Asset Sale Proceeds to an offer to
repurchase the Notes, at a purchase price in cash equal to 100% of the principal
amount thereof plus accrued and unpaid interest, if any, to the date of
repurchase (an "Excess Proceeds Offer"). If an Excess Proceeds Offer is not
fully subscribed, the Company may retain the portion of the Available Asset Sale
Proceeds not required to repurchase Notes.
If the Company is required to make an Excess Proceeds Offer, the Company
shall mail, within 30 days following the Reinvestment Date, a notice to the
Holders stating, among other things: (1) that such Holders have the right to
require the Company to apply the Available Asset Sale Proceeds to repurchase
such Notes at a purchase price in cash equal to 100% of the principal amount
thereof plus accrued and unpaid interest, if any, to the date of purchase; (2)
the purchase date, which shall be no earlier than 30 days and not later than 60
days from the date such notice is mailed; and (3) the instructions, determined
by the Company, that each Holder must follow in order to have such Notes
repurchased.
Limitation on Common Stock of Subsidiaries
The Company will not (i) sell, pledge, hypothecate or otherwise convey or
dispose of any Common Stock of a Restricted Subsidiary (other than under or in
respect of the Amended Credit Agreement or under the terms of any Designated
Senior Indebtedness and other than pledges of the Capital Stock of Restricted
Subsidiaries that are not Guarantors securing Indebtedness of such Restricted
Subsidiaries that are not Guarantors) or (ii) permit any of its Subsidiaries to
issue any Common Stock, other than to the Company or a Wholly Owned Subsidiary
of the Company. The foregoing restrictions shall not apply to an Asset Sale made
in compliance with "Limitation on Certain Asset Sales."
Payments for Consent
Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any holder of any 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 unless such consideration is offered to be paid or
agreed to be paid to all holders of the June Notes or July Notes, as the case
may be, which so consent, waive or agree to amend in the time frame set forth in
solicitation documents relating to such consent, waiver or agreement.
CHANGE OF CONTROL OFFER
Within 20 days of the occurrence of a Change of Control, the Company shall
notify the Trustee in writing of such occurrence and shall make an offer to
purchase (the "Change of Control Offer") the outstanding Notes at a purchase
price equal to 101% of the principal amount thereof plus any accrued and unpaid
interest thereon to the Change of Control Payment Date (as hereinafter defined)
(such purchase price being hereinafter referred to as the "Change of Control
Purchase Price") in accordance with the procedures set forth in this covenant.
Within 20 days of the occurrence of a Change of Control, the Company also
shall (i) cause a notice of the Change of Control Offer to be sent at least once
to the Dow Jones News Service or similar business news service in the United
States and (ii) send by first-class mail, postage prepaid, to the Trustee and to
each
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holder of the Notes, at the address appearing in the register maintained by the
Registrar of the Notes, a notice stating:
(1) that the Change of Control Offer is being made pursuant to this
covenant and that all Notes tendered will be accepted for payment, and
otherwise subject to the terms and conditions set forth therein;
(2) the Change of Control Purchase Price and the purchase date (which
shall be a Business Day no earlier than 20 business days from the date such
notice is mailed (the "Change of Control Payment Date"));
(3) that any Note not tendered will continue to accrue interest;
(4) that, unless the Company defaults in the payment of the Change of
Control Purchase Price, any Notes accepted for payment pursuant to the
Change of Control Offer shall cease to accrue interest after the Change of
Control Payment Date;
(5) that holders accepting the offer to have their Notes purchased
pursuant to a Change of Control Offer will be required to surrender the
Notes to the Paying Agent at the address specified in the notice prior to
the close of business on the Business Day preceding the Change of Control
Payment Date;
(6) that holders will be entitled to withdraw their acceptance if the
Paying Agent receives, not later than the close of business on the third
Business Day preceding the Change of Control Payment Date, a telegram,
telex, facsimile transmission or letter setting forth the name of the
holder, the principal amount of the Notes delivered for purchase, and a
statement that such holder is withdrawing his election to have such Notes
purchased;
(7) that holders whose Notes are being purchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered, provided that each Note purchased and each such new
Note issued shall be in an original principal amount in denominations of
$1,000 and integral multiples thereof;
(8) any other procedures that a holder must follow to accept a Change
of Control Offer or effect withdrawal of such acceptance; and
(9) the name and address of the Paying Agent.
On the Change of Control Payment Date, the Company shall, to the extent
lawful, (i) accept for payment Notes or portions thereof tendered pursuant to
the Change of Control Offer, (ii) deposit with the Paying Agent money sufficient
to pay the purchase price of all Notes or portions thereof so tendered and (iii)
deliver or cause to be delivered to the Trustee Notes so accepted together with
an Officers' Certificate stating the Notes or portions thereof tendered to the
Company. The Paying Agent shall promptly mail to each holder of Notes so
accepted payment in an amount equal to the purchase price for such Notes, and
the Company shall execute and issue, and the Trustee shall promptly authenticate
and mail to such holder, a new Note equal in principal amount to any unpurchased
portion of the Notes surrendered; provided that each such new Note shall be
issued in an original principal amount in denominations of $1,000 and integral
multiples thereof.
The Indentures require that if the Amended Credit Agreement is in effect,
or any amounts are owing thereunder or in respect thereof, at the time of the
occurrence of a Change of Control, prior to the mailing of the notice to holders
described in the preceding paragraph, but in any event within 30 days following
any Change of Control, the Company covenants to (i) repay in full all
obligations under or in respect of the Amended Credit Agreement or offer to
repay in full all obligations under or in respect of the Amended Credit
Agreement and repay the obligations under or in respect of the Amended Credit
Agreement of each lender who has accepted such offer or (ii) obtain the
requisite consent under the Amended Credit Agreement to permit the repurchase of
the Notes as described above. The Company must first comply with the covenant
described in the preceding sentence before it shall be required to purchase
Notes in the event of a Change of Control; provided that the Company's failure
to comply with the covenant described in the preceding sentence
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constitutes an Event of Default described in clause (iii) under "Events of
Default" below if not cured within 60 days after the notice required by such
clause. As a result of the foregoing, a holder of the Notes may not be able to
compel the Company to purchase the Notes unless the Company is able at the time
to refinance all of the obligations under or in respect of the Amended Credit
Agreement or obtain requisite consents under the Amended Credit Agreement.
Failure by the Company to make a Change of Control Offer when required by the
Indentures constitutes a default under the Indentures and, if not cured within
60 days after notice, constitutes an Event of Default.
The Indentures provide that, (A) if the Company or any Subsidiary thereof
has issued any outstanding (i) Indebtedness that is subordinated in right of
payment to the Notes or (ii) Preferred Stock, and the Company or such Subsidiary
is required to make a Change of Control Offer or to make a distribution with
respect to such subordinated Indebtedness or Preferred Stock in the event of a
change of control, the Company shall not consummate any such offer or
distribution with respect to such subordinated Indebtedness or Preferred Stock
until such time as the Company shall have paid the Change of Control Purchase
Price in full to the holders of Notes that have accepted the Company's Change of
Control Offer and shall otherwise have consummated the Change of Control Offer
made to holders of the Notes and (B) the Company will not issue Indebtedness
that is subordinated in right of payment to the Notes or Preferred Stock with
change of control provisions requiring the payment of such Indebtedness or
Preferred Stock prior to the payment of the Notes in the event of a Change in
Control under the Indentures.
In the event that a Change of Control occurs and the holders of Notes
exercise their right to require the Company to purchase Notes, if such purchase
constitutes a "tender offer" for purposes of Rule 14e-1 under the Exchange Act
at that time, the Company will comply with the requirements of Rule 14e-1 as
then in effect with respect to such repurchase.
MERGER, CONSOLIDATION OR SALE OF ASSETS
The Company will not and will not permit any Guarantor to consolidate with,
merge with or into, or transfer all or substantially all of its assets (as an
entirety or substantially as an entirety in one transaction or a series of
related transactions), to any Person unless: (i) the Company or the Guarantor,
as the case may be, shall be the continuing Person, or the Person (if other than
the Company or the Guarantor) formed by such consolidation or into which the
Company or the Guarantor, as the case may be, is merged or to which the
properties and assets of the Company or the Guarantor, as the case may be, are
transferred shall be a corporation organized and existing under the laws of the
United States or any State thereof or the District of Columbia and shall
expressly assume, by a supplemental indenture, executed and delivered to the
Trustee, in form satisfactory to the Trustee, all of the obligations of the
Company or the Guarantor, as the case may be, under the Notes and the
Indentures, and the obligations under the Indentures shall remain in full force
and effect; (ii) immediately before and immediately after giving effect to such
transaction, no Default or Event of Default shall have occurred and be
continuing; and (iii) immediately after giving effect to such transaction on a
pro forma basis the Company or such Person could incur at least $1.00 additional
Indebtedness (other than Permitted Indebtedness) under the covenant set forth
under "Limitation on Additional Indebtedness," provided that a Person that is a
Guarantor may merge into the Company or another Person that is a Guarantor
without complying with this clause (iii).
In connection with any consolidation, merger or transfer of assets
contemplated by this provision, the Company shall deliver, or cause to be
delivered, to the Trustee, in form and substance reasonably satisfactory to the
Trustee, an Officers' Certificate and an opinion of counsel, each stating that
such consolidation, merger or transfer and the supplemental indenture in respect
thereto comply with this provision and that all conditions precedent herein
provided for relating to such transaction or transactions have been complied
with.
GUARANTEES
The Notes will be guaranteed on a senior subordinated basis by the
Guarantors. All payments pursuant to the Guarantees by the Guarantors are
subordinated in right of payment to the prior payment in full of all Senior
Indebtedness of the Guarantor, to the same extent and in the same manner that
all payments pursuant
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to the Notes are subordinated in right of payment to the prior payment in full
of all Senior Indebtedness of the Company.
The obligations of each Guarantor are limited to the maximum amount as
will, after giving effect to all other contingent and fixed liabilities of such
Guarantor (including, without limitation, any guarantees of Senior Indebtedness)
and after giving effect to any collections from or payments made by or on behalf
of any other Guarantor in respect of the obligations of such other Guarantor
under its Guarantee or pursuant to its contribution obligations under the
Indentures, result in the obligations of such Guarantor under the Guarantee not
constituting a fraudulent conveyance or fraudulent transfer under federal or
state law. Each Guarantor that makes a payment or distribution under a Guarantee
shall be entitled to a contribution from each other Guarantor in a pro rata
amount based on the Adjusted Net Assets of each Subsidiary Guarantor.
A Guarantor shall be released from all of its obligations under its
Guarantee if all or substantially all of its assets are directly or indirectly
sold or all of its Capital Stock is directly or indirectly sold, in all such
cases in a transaction in compliance with the covenant described under
"Limitation on Certain Asset Sales," or the Guarantor merges with or into or
consolidates with, or transfers all or substantially all of its assets to, the
Company or another Guarantor in a transaction in compliance with "Merger,
Consolidation or Sale of Assets," and such Guarantor has delivered to the
Trustee an Officers' Certificate and an opinion of counsel, each stating that
all conditions precedent herein provided for relating to such transaction have
been complied with.
EVENTS OF DEFAULT
The following events are defined in the Indentures as "Events of Default":
(i) default in payment of any principal of, or premium, if any, on the
June Notes or July Notes, as the case may be;
(ii) default for 30 days in payment of any interest on the June Notes
or July Notes, as the case may be;
(iii) default by the Company or any Guarantor in the observance or
performance of any other covenant (i) in the June Notes or the June
Indenture (ii) or the July Notes or the July Indenture, as the case may be,
for 60 days after written notice from the Trustee or the holders of not
less than 25% in aggregate principal amount of such Notes then outstanding;
(iv) default in the payment at final maturity of principal in an
aggregate amount of $10,000,000 or more with respect to any Indebtedness of
the Company or any Restricted Subsidiary thereof which default shall not be
cured, waived or postponed pursuant to an agreement with the holders of
such Indebtedness within 60 days after written notice, or the acceleration
of any such Indebtedness aggregating $10,000,000 or more which acceleration
shall not be rescinded or annulled within 20 days after written notice as
provided in the Indenture;
(v) any final judgment or judgments which can no longer be appealed
for the payment of money in excess of $10,000,000 shall be rendered against
the Company or any Restricted Subsidiary thereof, and shall not be
discharged for any period of 60 consecutive days during which a stay of
enforcement shall not be in effect; and
(vi) certain events involving bankruptcy, insolvency or reorganization
of the Company or any Restricted Subsidiary thereof.
The Indenture provides that the Trustee may withhold notice to the holders
of the Notes of any default (except in payment of principal or premium, if any,
or interest on the Notes) if the Trustee considers it to be in the best interest
of the holders of the Notes to do so.
The Indentures provide that if an Event of Default (other than an Event of
Default resulting from certain events of bankruptcy, insolvency or
reorganization of the Company) shall have occurred and be continuing, then the
Trustee or the holders of not less than 25% in aggregate principal amount of the
June Notes or the
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July Notes, as the case may be, then outstanding may declare to be immediately
due and payable the entire principal amount of all such Notes then outstanding
plus accrued interest to the date of acceleration and (i) such amounts shall
become immediately due and payable or (ii) if there are any amounts outstanding
under or in respect of the Amended Credit Agreement, such amounts shall become
due and payable upon the first to occur of an acceleration of amounts
outstanding under or in respect of the Amended Credit Agreement or five business
days after receipt by the Company and the Representative of the holders of
Senior Indebtedness under or in respect of the Amended Credit Agreement of
notice of the acceleration of the Notes; provided, however, that after such
acceleration but before a judgment or decree based on acceleration is obtained
by the Trustee, the holders of a majority in aggregate principal amount of such
outstanding Notes may, under certain circumstances, rescind and annul such
acceleration if all Events of Default, other than nonpayment of accelerated
principal, premium or interest, have been cured or waived as provided in the
Indenture governing such Notes. In case an Event of Default resulting from
certain events of bankruptcy, insolvency or reorganization of the Company shall
occur, the principal, premium and interest amount with respect to all of the
Notes shall be due and payable immediately without any declaration or other act
on the part of the Trustee or the holders of the Notes.
The holders of a majority in principal amount of the June Notes or the July
Notes, as the case may be, then outstanding shall have the right to waive any
existing default or compliance with any provision of such Notes or the Indenture
governing such Notes and to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, subject to certain
limitations specified in such Indenture.
No holder of any Note will have any right to institute any proceeding with
respect to the Indentures or for any remedy thereunder, unless such holder shall
have previously given to the Trustee written notice of a continuing Event of
Default and unless also the holders of at least 25% in aggregate principal
amount of the outstanding June Notes or July Notes, as the case may be, shall
have made a written request and offered reasonable indemnity to the Trustee to
institute such proceeding as a trustee, and unless the Trustee shall not have
received from the holders of a majority in aggregate principal amount of such
outstanding Notes a direction inconsistent with such request and shall have
failed to institute such proceeding within 60 days. However, such limitations do
not apply to a suit instituted on such Note on or after the respective due dates
expressed in such Note.
DEFEASANCE AND COVENANT DEFEASANCE
The Indentures provide the Company may elect either (a) to defease and be
discharged from any and all obligations with respect to the Notes (except for
the obligations to register the transfer or exchange of such Notes, to replace
temporary or mutilated, destroyed, lost or stolen Notes, to maintain an office
or agency in respect of the Notes and to hold monies for payment in trust)
("defeasance") or (b) to be released from their obligations with respect to the
Notes under certain covenants contained in the Indentures and described above
under "-- Certain Covenants" ("covenant defeasance"), upon the deposit with the
Trustee (or other qualifying trustee), in trust for such purpose, of money
and/or U.S. Government Obligations which through the payment of principal and
interest in accordance with their terms will provide money, in an amount
sufficient to pay the principal of, premium, if any, and interest on the Notes,
on the scheduled due dates therefor or on a selected date of redemption in
accordance with the terms of the Indentures. Such a trust may only be
established if, among other things, the Company has delivered to the Trustee an
Opinion of Counsel (as specified in the Indentures) (i) to the effect that
neither the trust nor the Trustee will be required to register as an investment
company under the Investment Company Act of 1940, as amended, and (ii) to the
effect that holders of the Notes or persons in their positions will not
recognize income, gain or loss for federal income tax purposes as a result of
such deposit, defeasance and discharge and will be subject to federal income tax
on the same amount and in the same manner and at the same times, as would have
been the case if such deposit, defeasance and discharge had not occurred which
in the case of discharge only, must be based upon a private ruling concerning
the Notes, a published ruling of the Internal Revenue Service or a change in
applicable federal tax law.
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MODIFICATION OF INDENTURE
From time to time, the Company, the Guarantors and the Trustee may, without
the consent of holders of the Notes, amend the Indentures or the Notes or
supplement the Indentures for certain specified purposes, including providing
for uncertificated Notes in addition to certificated Notes, and curing any
ambiguity, defect or inconsistency, or making any other change that does not
materially and adversely affect the rights of any holder. The Indentures contain
provisions permitting the Company, the Guarantors and the Trustee, with the
consent of holders of at least a majority in principal amount of the outstanding
Notes governed by such Indenture, to modify or supplement such Indenture or such
Notes, except that no such modification shall, without the consent of each
holder affected thereby, (i) reduce the amount of such Notes whose holders must
consent to an amendment, supplement, or waiver to such Indenture or such Notes,
(ii) reduce the rate of or change the time for payment of interest on any such
Note, (iii) reduce the principal of or premium on or change the stated maturity
of any such Note, (iv) make any such Note payable in money other than that
stated in such Note or change the place of payment from New York, New York, (v)
change the amount or time of any payment required by such Notes or reduce the
premium payable upon any redemption of such Notes, or change the time before
which no such redemption may be made, (vi) waive a default on the payment of the
principal of, interest on, or redemption payment with respect to any such Note,
or (vii) take any other action otherwise prohibited by such Indenture to be
taken without the consent of each holder affected thereby.
REPORTS TO HOLDERS
So long as the Company is subject to the periodic reporting requirements of
the Exchange Act, it will continue to furnish the information required thereby
to the Commission and to the holders of the Notes. The Indentures provide that
even if the Company is entitled under the Exchange Act not to furnish such
information to the Commission or to the holders of the Notes, they will
nonetheless continue to furnish such information to the Commission and holders
of the Notes.
COMPLIANCE CERTIFICATE
The Company will deliver to the Trustee on or before 100 days after the end
of the Company's fiscal year and on or before 50 days after the end of each of
the first, second and third fiscal quarters in each year an Officers'
Certificate stating whether or not the signers know of any Default or Event of
Default that has occurred. If they do, the certificate will describe the Default
or Event of Default and its status.
THE TRUSTEE
The Trustee under the Indentures will be the Registrar and Paying Agent
with regard to the Notes. The Indentures provide that, except during the
continuance of an Event of Default, the Trustee will perform only such duties as
are specifically set forth in the Indentures. During the existence of an Event
of Default, the Trustee will exercise such rights and powers vested in it under
the Indentures and use the same degree of care and skill in its exercise as a
prudent person would exercise under the circumstances in the conduct of such
person's own affairs.
TRANSFER AND EXCHANGE
Holders of the Notes may transfer or exchange Notes in accordance with the
Indenture governing such Notes. The Registrar under such Indenture may require a
holder, among other things, to furnish appropriate endorsements and transfer
documents, and to pay any taxes and fees required by law or permitted by such
Indenture. The Registrar is not required to transfer or exchange any Note
selected for redemption. Also, the Registrar is not required to transfer or
exchange any Note for a period of 15 days before selection of the Notes to be
redeemed.
The registered holder of a Note may be treated as the owner of it for all
purposes.
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REGISTRATION RIGHTS
Holders of New Notes are not generally entitled to any registration rights
with respect to such New Notes. Pursuant to the Registration Rights Agreement,
dated as of June 30, 1997, by and among the Company, the Guarantors and the
Initial Purchasers of the Old June Notes and the Registration Rights Agreement,
dated as of July 22, 1997, by and among the Company, the Guarantors and the
Initial Purchasers of the Old July Notes (collectively, the "Registration Rights
Agreements"). Holders of Old Notes are entitled to certain registration rights.
Under the Registration Rights Agreements, the Company agreed, for the benefit of
the Holders of the Old Notes, that it will, at its cost, (i) within 60 days
after the date such Notes were first issued, file a Registration Statement with
the Commission with respect to the Exchange Offer, and (ii) within 120 days
after the date such Notes were first issued, use its best efforts to cause the
Registration Statement to be declared effective under the Securities Act. The
registration statement of which this Prospectus is a part constitutes the
Registration Statement.
In the event that applicable interpretations of the staff of the Commission
do not permit the Company to effect an Exchange Offer, or if for any other
reason the Exchange Offer is not consummated within 150 days of the date such
Notes were first issued, the Company will, at its own expense, (a) as promptly
as practicable, file a Shelf Registration Statement, (b) use its best efforts to
cause the Shelf Registration Statement to be declared effective under the
Securities Act and (c) use its best efforts to keep effective the Shelf
Registration Statement until two years after its effective date (subject to
extension in certain circumstances), or such shorter period ending when all Old
Notes covered by the Shelf Registration Statement have been sold thereunder (the
"Effectiveness Period"). The Company will, in the event of the Shelf
Registration Statement, provide to each Holder of the Old Notes copies of the
prospectus which is a part of the Shelf Registration Statement, notify each such
Holder when the Shelf Registration Statement for the Old Notes has become
effective and take certain other actions as are required to permit unrestricted
resales of the Old Notes.
A Holder of the Old Notes that sells such Old Notes pursuant to the Shelf
Registration Statement generally would be required to be named as a selling
securityholder 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 Agreements which are applicable to such a
holder (including certain indemnification rights and obligations).
In the event of a Registration Default under and as defined in the
Registration Rights Agreements, the sole remedy available to Holders of the Old
Notes will be the assessment of additional interest as follows: the per annum
interest rate on the Old Notes will increase by 50 basis points; and the per
annum interest rate will increase by an additional 25 basis points for each
subsequent 90-day period during which the Registration Default remains uncured,
up to a maximum additional interest rate of 200 basis points per annum in excess
of 9 1/8% ("Additional Interest"). All Additional Interest will be payable to
Holders of the Old Notes in cash on each January 15 and July 15, commencing with
the first such date occurring after any such Additional Interest commences to
accrue, until such Registration Default is cured. After the date on which such
Registration Default is cured, the interest rate on the Old Notes will refer to
the interest rate originally borne by the Old Notes.
The summary herein of certain provisions of the Registration Rights
Agreements does not purport to be complete and is subject to, and is qualified
in its entirety by reference to, all the provisions of the Registration Rights
Agreement, a copy of which is filed as an exhibit to the Registration Statement
of which this Prospectus is a part.
CERTAIN DEFINITIONS
Unless otherwise provided, set forth below is a summary of certain of the
defined terms used in the covenants contained in both Indentures. Reference is
made to the June Indenture and the July Indenture, respectively, for the full
definition of all such terms as well as any other capitalized terms used herein
for which no definition is provided.
"9 1/8% Notes" under the July Indenture means the June Notes.
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"9 1/8% Notes Indenture" under the July Indenture means the June Indenture,
as such indenture may be amended, modified or supplemented from time to time.
"11% Notes" under the July Indenture means the 11% Notes.
"11% Notes Indenture" under the July Indenture means the Indenture, dated
as of July 2, 1996, among the Company, the Guarantors and Comerica Bank, as
Trustee, as such indenture may be amended, modified or supplemented from time to
time.
"Acquired Indebtedness" means Indebtedness of a Person (including an
Unrestricted Subsidiary) existing at the time such Person becomes a Restricted
Subsidiary or is merged or consolidated with or into the Company or a Restricted
Subsidiary or assumed in connection with the acquisition of assets from such
Person.
"Adjusted EBITDA" means, for any Person, for any period, the EBITDA of such
Person, plus any amounts excluded from the calculation of the Consolidated Net
Income of such Person pursuant to clause (b) of the definition thereof.
"Adjusted Net Assets" of a Guarantor at any date shall mean the lesser of
the amount by which (x) the fair value of the property of such Guarantor exceeds
the total amount of liabilities, including, without limitation, contingent
liabilities (after giving effect to all other fixed and contingent liabilities
(including, without limitation, any guarantees of Senior Indebtedness)), but
excluding liabilities under the Guarantee, of such Guarantor at such date and
(y) the present fair salable value of the assets of such Guarantor at such date
exceeds the amount that will be required to pay the probable liability of such
Guarantor on its debts (after giving effect to all other fixed and contingent
liabilities (including, without limitation, any guarantees of Senior
Indebtedness) and after giving effect to any collection from any Subsidiary of
such Guarantor in respect of the obligations of such Subsidiary under the
Guarantee), excluding Indebtedness in respect of the Guarantee, as they become
absolute and matured.
"Affiliate" of any specified Person means any other Person which directly
or indirectly through one or more intermediaries controls, or is controlled by,
or is under common control with, such specified Person. For the purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlling," "controlled by," and "under common control with"), as used with
respect to any Person, means 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.
"Amended Credit Agreement" means the Amended Credit Agreement, dated as of
June 30, 1997, among the Company, CIBC, as administrative agent, Merrill
Capital, as documentation agent, and the lenders from time to time parties
thereto, as such agreement may be amended, modified or supplemented from time to
time or deferred, renewed, extended, refunded, refinanced, restructured or
replaced from time to time in whole or in part (whether with the original
administrative agent and lenders or other agents and lenders or otherwise, and
whether provided under the Amended Credit Agreement or other credit agreements
or otherwise).
"Argosy" means CIBC WG Argosy Merchant Fund 2, L.L.C.
"Asset Sale" means the sale, transfer or other disposition in any single
transaction or series of related transactions of (a) any Capital Stock of or
other equity interest in any Restricted Subsidiary of the Company, (b) all or
substantially all of the assets of the Company or of any Restricted Subsidiary
thereof, (c) real property or (d) all or substantially all of the assets of any
business owned by the Company or any Restricted Subsidiary thereof, or a
division, line of business or comparable business segment of the Company or any
Restricted Subsidiary thereof; provided that Asset Sales shall not include (i)
sales, leases, conveyances, transfers or other dispositions to the Company or to
a Restricted Subsidiary or to any other Person if after giving effect to such
sale, lease, conveyance, transfer or other disposition such other Person becomes
a Restricted Subsidiary, (ii) leases, conveyances or other transfers by the
Company or a Restricted Subsidiary of Property to any Person as an Investment in
such Person provided that the Company or such Restricted Subsidiary receives
consideration at the time of such lease, conveyance or other transfer at least
equal to the fair market value of such Property and such Investment is included
in clause (v) of the second paragraph of "Limitation on Restricted Payments"
contained herein.
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"Asset Sale Proceeds" means, with respect to any Asset Sale, (i) cash
received by the Company or any Restricted Subsidiary from such Asset Sale
(including cash received as consideration for the assumption of liabilities
incurred in connection with or in anticipation of such Asset Sale), after (a)
provision for all income or other taxes measured by or resulting from such Asset
Sale, (b) payment of all brokerage commissions, underwriting and other fees and
expenses related to such Asset Sale, (c) provision for minority interest holders
in any Restricted Subsidiary as a result of such Asset Sale and (d) deduction of
appropriate amounts to be provided by the Company or a Restricted Subsidiary as
a reserve, in accordance with GAAP, against any liabilities associated with the
assets sold or disposed of in such Asset Sale and retained by the Company or a
Restricted Subsidiary after such Asset Sale, including, without limitation,
pension and other post employment benefit liabilities and liabilities related to
environmental matters or against any indemnification obligations associated with
the assets sold or disposed of in such Asset Sale, and (ii) promissory notes and
other non-cash consideration received by the Company or any Restricted
Subsidiary from such Asset Sale or other disposition upon the liquidation or
conversion of such notes or non-cash consideration into cash.
"Attributable Indebtedness" in respect of a Sale and Lease-Back Transaction
means, as at the time of determination, the present value of the notes
(discounted according to GAAP at the cost of indebtedness implied in the lease)
of the total obligations of the lessee for rental payments during the remaining
term of the lease included in such Sale and Lease Back Transaction (including
any period for which such lease has been extended).
"Available Asset Sale Proceeds" means, with respect to any Asset Sale, the
aggregate Asset Sale Proceeds from such Asset Sale that have not been applied in
accordance with clause (iii)(a), (iii)(b), (iii)(c) (with respect to the July
Notes) or (iii)(d), and that have not been the basis for an Excess Proceeds
Offer in accordance with clause (iii)(e), of the first paragraph of "Certain
Covenants -- Limitation on Certain Asset Sales."
"Capital Stock" means, with respect to any Person, any and all shares or
other equivalents (however designated) of capital stock, partnership interests
or any other participation, right or other interest in the nature of an equity
interest in such Person or any option, warrant or other security convertible
into any of the foregoing.
"Capitalized Lease Obligations" means indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP, and the amount of such indebtedness
shall be the capitalized amount of such obligations determined in accordance
with GAAP.
A "Change of Control" of the Company will be deemed to have occurred at
such time as (i) any Person (including a Person's Affiliates and associates),
other than a Permitted Holder, becomes the beneficial owner (as defined under
Rule 13d-3 or any successor rule or regulation promulgated under the Exchange
Act) of 50% or more of the total voting power of the Company's Common Stock,
(ii) any Person (including a Person's Affiliates and associates), other than a
Permitted Holder, becomes the beneficial owner of more than 30% of the total
voting power of the Company's Common Stock, and either (A) the Permitted Holders
beneficially own, in the aggregate, a lesser percentage of the total voting
power of the Common Stock of the Company than such other Person and do not have
the right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the Board of Directors of the Company or
(B) JLL is the beneficial owner of less than 20% of the total voting power of
the Company's Common Stock, (iii) there shall be consummated any consolidation
or merger of the Company in which the Company is not the continuing or surviving
corporation or pursuant to which the Common Stock of the Company would be
converted into cash, securities or other property, other than a merger or
consolidation of the Company in which the holders of the Common Stock of the
Company outstanding immediately prior to the consolidation or merger hold,
directly or indirectly, at least a majority of the Common Stock of the surviving
corporation immediately after such consolidation or merger, or (iv) during any
period of two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors of the Company (together with any new
directors whose election by such Board of Directors or whose nomination for
election by the shareholders of the Company has been approved by 66 2/3% of the
directors then still in office who either were directors at the beginning of
such
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period or whose election or recommendation for election was previously so
approved) cease to constitute a majority of the Board of Directors of the
Company.
"Chase" means Chase Equity Associates, L.P.
"Common Stock" of any Person means all Capital Stock of such Person that is
generally entitled to (i) vote in the election of directors of such Person or
(ii) if such Person is not a corporation, vote or otherwise participate in the
selection of the governing body, partners, managers or others that will control
the management and policies of such Person.
"Consolidated Fixed Charges" means, with respect to any Person, the sum of
a Person's (i) Consolidated Interest Expense, plus (ii) the product of (x) the
aggregate amount of all dividends paid on Disqualified Capital Stock of the
Company or on each series of preferred stock of each Subsidiary of such Person
(other than dividends paid or payable in additional shares of preferred stock or
to the Company or any of its Wholly-Owned Subsidiaries) times (y) a fraction,
the numerator of which is one and the denominator of which is one minus the then
current effective combined federal, state and local tax rate of such Person
(expressed as a decimal), in each case, for such four-quarter period.
"Consolidated Interest Expense" means, with respect to any Person, for any
period and without duplication, the aggregate amount of interest which, in
conformity with GAAP, would be set forth opposite the caption "interest expense"
or any like caption on an income statement for such Person and its Subsidiaries
on a consolidated basis (including, but not limited to, (i) imputed interest
included in Capitalized Lease Obligations, (ii) all commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers'
acceptance financing, (iii) net payments made in connection with Interest Rate
Agreements, (iv) the interest portion of any deferred payment obligation, (v)
amortization of discount or premium, if any, and (vi) all other non-cash
interest expense (other than interest amortized to cost of sales)) plus all net
capitalized interest for such period and all interest paid under any guarantee
of Indebtedness (including a guarantee of principal, interest or any combination
thereof) of any Person, and minus (i) net payments received in connection with
Interest Rate Agreements and (ii) amortization of deferred financing costs and
expenses.
"Consolidated Net Income" means, with respect to any Person, for any
period, the aggregate of the net income (before preferred stock dividends, if
any) of such Person and its Subsidiaries for such period, on a consolidated
basis, determined in accordance with GAAP; provided, however, that there shall
be excluded from Consolidated Net Income (a) the net income of any Person which
under GAAP is not consolidated with the Person in question other than the amount
of dividends or distributions paid to the Person in question or the Subsidiary,
(b) the net income of any Subsidiary of the Person in question, other than a
Domestic Subsidiary, that is subject to any restriction or limitation on the
payment of dividends or the making of other distributions (other than pursuant
to the Notes or the Indenture) to the extent of such restriction or limitation
(provided that if any such restriction or limitation by its terms takes effect
upon the occurrence of a default or an event of default, such exclusion shall
become effective only upon the occurrence and during the continuance of such
default or event of default), (c) the net income of any Person acquired in a
pooling of interests transaction for any period prior to the date of such
acquisition, (d) any net gain or loss resulting from a sale of Property by the
Person in question or any of its Subsidiaries other than in the ordinary course
of business, (e) extraordinary gains and losses, (f) non-recurring gains,
non-cash non-recurring losses and charges (including restructuring charges and
costs) and, in the case of the Company, cash restructuring charges for any
period prior to July 31, 1998, (g) any amounts received by the Company or a
Restricted Subsidiary which are used to offset Investments pursuant to the terms
of clause (ii) of the definition of "Net Investments" and (h) in the case of
clauses (d), (e) and (f), the associated tax effects during such period.
"Designated Senior Indebtedness," as to the Company or any Guarantor, as
the case may be, means any Senior Indebtedness (a) under or in respect of the
Amended Credit Agreement, or (b) which at the time of determination exceeds $25
million in aggregate principal amount (or accreted value in the case of
Indebtedness issued at a discount) outstanding or available under a committed
facility, and (i) which is specifically designated in the instrument evidencing
such Senior Indebtedness as "Designated Senior
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Indebtedness" by such Person and (ii) as to which the Trustee has been given
written notice of such designation.
"Disqualified Capital Stock" means any Capital Stock of the Company or a
Restricted Subsidiary thereof which, by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable at the
option of the holder), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, in whole or in part, on or
prior to the maturity date of the Notes, for cash or securities constituting
Indebtedness. Without limitation of the foregoing, Disqualified Capital Stock
shall be deemed to include any Preferred Stock of a Restricted Subsidiary of the
Company or the Company, under which, by agreement or otherwise, such Restricted
Subsidiary or the Company is obligated to pay current dividends or distributions
in cash during the period prior to the maturity date of the Notes; provided,
however, that Preferred Stock of the Company or any Restricted Subsidiary
thereof that is issued with the benefit of provisions requiring a change of
control offer to be made for such Preferred Stock in the event of a change of
control of the Company or Restricted Subsidiary, which provisions have
substantially the same effect as the provisions of the Indenture described under
"Change of Control," shall not be deemed to be Disqualified Capital Stock solely
by virtue of such provisions and, provided, further, that Capital Stock owned by
the Company or any Restricted Subsidiary shall not constitute Disqualified
Capital Stock.
"Domestic" with respect to any Person shall mean a Person whose
jurisdiction of incorporation or formation is the United States, any state
thereof or the District of Columbia.
"EBITDA" means, for any Person, for any period, an amount equal to (a) the
sum of (i) Consolidated Net Income for such period, plus (ii) the provision for
taxes for such period based on income or profits to the extent such income or
profits were included in computing Consolidated Net Income and any provision for
taxes utilized in computing net loss under clause (i) hereof, plus (iii)
Consolidated Interest Expense for such period, plus (iv) depreciation for such
period, plus (v) amortization for such period (including the amortization of
deferred financing costs and expenses), plus (vi) any other non-cash items
(including minority interests) reducing Consolidated Net Income for such period,
plus (vii) non-recurring losses and charges (including restructuring charges and
costs) whether cash or non-cash for such period to the extent not included in
the calculation of Consolidated Net Income, minus (viii) all non-cash items
increasing Consolidated Net Income for such period, all for such Person and its
Subsidiaries determined on a consolidated basis in accordance with GAAP, except
that with respect to the Company each of the foregoing items shall be determined
on a consolidated basis with respect to the Company and its Restricted
Subsidiaries only.
"Equity Offering" means an offering by the Company 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.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Indenture" under the June Indenture means the Indenture, dated as
of July 2, 1996, among the Company, the Guarantors and Comerica Bank, as
Trustee, as such indenture may be amended, modified or supplemented from time to
time.
"Existing Notes" under the June Indenture means the 11% Notes.
"Fixed Charge Coverage Ratio" of any Person means, with respect to any
determination date, the ratio of (i) EBITDA for such Person's prior four full
fiscal quarters for which financial results have been reported immediately
preceding the determination date, to (ii) Consolidated Fixed Charges of such
Person.
"Foreign EBITDA" means, for any period, the aggregate of the EBITDA of each
of the Company's Restricted Subsidiaries which are not Guarantors.
"Foreign Interest Expense" means, for any period, the aggregate of the
Consolidated Interest Expense of each of the Company's Restricted Subsidiaries
which are not Guarantors.
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"GAAP" means generally accepted accounting principles consistently applied
as in effect in the United States from time to time.
"incur" means, with respect to any Indebtedness or other obligation of any
Person, to create, issue, incur (by conversion, exchange or otherwise), assume,
guarantee or otherwise become liable in respect of such Indebtedness or other
obligation or the recording, as required pursuant to GAAP or otherwise, of any
such Indebtedness or other obligation on the balance sheet of such person (and
"incurrence," "incurred," "incurrable," and "incurring" shall have meanings
correlative to the foregoing); provided that a change in GAAP that results in an
obligation of such Person that exists at such time becoming Indebtedness shall
not be deemed an incurrence of such Indebtedness.
"Indebtedness" means (without duplication), with respect to any Person, any
indebtedness at any time outstanding, secured or unsecured, contingent or
otherwise, which is for borrowed money (whether or not the recourse of the
lender is to the whole of the assets of such Person or only to a portion
thereof), or evidenced by bonds, notes, debentures or similar instruments or
representing the balance deferred and unpaid of the purchase price of any
property (excluding, without limitation, any balances that constitute accounts
payable or trade payables, and other accrued liabilities arising in the ordinary
course of business) if and to the extent any of the foregoing indebtedness would
appear as a liability upon a balance sheet of such Person prepared in accordance
with GAAP, and shall also include, to the extent not otherwise included, (i) any
Capitalized Lease Obligations, (ii) obligations of others secured by a lien to
which the property or assets owned or held by such Person is subject, whether or
not the obligation or obligations secured thereby shall have been assumed, (iii)
guarantees of obligations of other Persons which would be included within this
definition for such other Persons (whether or not such items would appear upon
the balance sheet of the guarantor), (iv) all obligations for the reimbursement
of any obligor on any letter of credit, banker's acceptance or similar credit
transaction, (v) in the case of the Company, Disqualified Capital Stock and, in
the case of any Restricted Subsidiary, Preferred Stock, (vi) obligations of any
such Person under any Interest Rate Agreement (if and to the extent such
Interest Rate Agreement obligations would appear as a liability upon a balance
sheet of such Person prepared in accordance with GAAP) and (vii) Attributable
Indebtedness. The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and, with respect to contingent obligations, the maximum liability upon
the occurrence of the contingency giving rise to the obligation, provided (i)
that the amount outstanding at any time of any Indebtedness issued with original
issue discount is the principal amount of such Indebtedness less the remaining
unamortized portion of the original issue discount of such Indebtedness at such
time as determined in conformity with GAAP and (ii) that Indebtedness shall not
include any liability for federal, state, local or other taxes. Notwithstanding
any other provision of the foregoing definition, any trade payable arising from
the purchase of goods or materials or for services obtained in the ordinary
course of business shall not be deemed to be "Indebtedness" of the Company or
any Restricted Subsidiaries for purposes of this definition. Furthermore,
guarantees of (or obligations with respect to letters of credit supporting)
Indebtedness and Liens securing Indebtedness otherwise included in the
determination of such amount shall not also be included.
"Interest Rate Agreement" means, for any Person, any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement designed to protect the party indicated therein against
fluctuations in interest rates.
"Investments" means, directly or indirectly, any advance, account
receivable, loan or capital contribution to (by means of transfers of property
to others, payments for property or services for the account or use of others or
otherwise), the purchase of any stock, bonds, notes, debentures, partnership or
joint venture interests or other securities of, the acquisition, by purchase or
otherwise, of all or substantially all of the business or assets or stock or
other evidence of beneficial ownership of, any Person. Investments shall exclude
extensions of trade credit on commercially reasonable terms in accordance with
normal trade practices.
"Issue Date" means the date the Notes governed by such Indenture are first
issued by the Company and authenticated by the Trustee under such Indenture.
"JLL" means Joseph, Littlejohn & Levy Fund II, L.P.
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"Lien" means with respect to any Property of any Person, any mortgage or
deed of trust, pledge, hypothecation, deposit arrangement, security interest,
lien, charge, encumbrance, preference, priority, or other security agreement or
preferential arrangement of any kind or nature whatsoever on or with respect to
such property or assets (including without limitation, any Capitalized Lease
Obligation, conditional sales, or other title retention agreement having
substantially the same economic effect as any of the foregoing).
"Net Cash Proceeds" means (a) in the case of any sale of Capital Stock by
the Company, the aggregate net cash proceeds received by the Company, after
payment of expenses, commissions, underwriting discounts and the like incurred
in connection therewith, (b) in the case of any exchange, exercise, conversion
or surrender of outstanding securities of any kind for or into shares of Capital
Stock of the Company which is not Disqualified Capital Stock, the net cash
proceeds received from the sale of such outstanding securities so exchanged,
exercised, converted or surrendered (plus any additional amount required to be
paid in cash by the holder to the Company upon such exchange, exercise,
conversion or surrender, less any and all payments made to the holders, e.g., on
account of fractional shares and less all expenses incurred by the Company in
connection therewith) and (c) in the case of any issuance of any Indebtedness by
the Company or any Restricted Subsidiary, the aggregate net cash proceeds
received by such Person after payment of expenses, commissions, underwriting
discounts and the like incurred in connection therewith.
"Net Investment" means the excess of (i) the aggregate amount of all
Investments in Unrestricted Subsidiaries or joint ventures made by the Company
or any Restricted Subsidiary on or after the Original Issue Date (in the case of
an Investment made other than in cash, the amount shall be the fair market value
of such Investment as determined in good faith by the board of directors of the
Company or such Restricted Subsidiary) over (ii) the sum of (A) the aggregate
amount returned in cash on or with respect to such Investments whether through
interest payments, principal payments, dividends or other distributions or
payments and (B) the Net Cash Proceeds received by the Company or any Restricted
Subsidiary or joint venture from the disposition of all or any portion of such
Investments (other than to a Subsidiary of the Company); provided, however, that
with respect to all Investments made in any Unrestricted Subsidiary or joint
venture the sum of clauses (A) and (B) above with respect to such Investments
shall not exceed the aggregate amount of all such Investments made in such
Unrestricted Subsidiary.
"Nomura" means Nomura Holding America, Inc.
"Non-Payment Event of Default" means any event (other than a Payment
Default) the occurrence of which entitles one or more Persons to accelerate the
maturity of any Designated Senior Indebtedness.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by the Chief Executive Officer, the President or any Vice President, and
the Chief Financial Officer or any Treasurer of such Person that shall comply
with applicable provisions of such Indenture.
"Original Issue Date" means (i) July 2, 1997, under the June Indenture and
(ii) July 16, 1997, under the July Indenture.
"Payment Default" means any default, whether or not any requirement for the
giving of notice, the lapse of time or both, or any other condition to such
default becoming an Event of Default has occurred, in the payment of principal
of (or premium, if any) or interest on or any other amount payable in connection
with Designated Senior Indebtedness.
"Permitted Holders" means (i) JLL or any other fund controlled by Joseph
Littlejohn & Levy, (ii) TSG, (iii) Argosy, (iv) Nomura and (v) Chase.
"Permitted Indebtedness" means:
(i) Indebtedness of the Company or any Domestic Restricted Subsidiary
arising under or in respect of the Amended Credit Agreement in an aggregate
amount (the "Permitted Credit Agreement Amount") not to exceed (A)
$740,500,000, under the June Indenture and $590,500,000, under the July
Indenture (which gives effect to the concurrent repayment of amounts
outstanding under the Credit Agreement on the date the relevent Notes were
first issued), less (B) any mandatory prepayments actually made thereunder
(to the extent, in the case of payments of revolving credit Indebtedness,
that
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the corresponding commitments have been permanently reduced) or scheduled
payments actually made thereunder, in each case, after consummation of the
Lemmerz Acquisition;
(ii) Indebtedness under the Notes and the Guarantees;
(iii) Indebtedness not covered by any other clause of this definition
which is outstanding on the Issue Date;
(iv) Indebtedness incurred to finance the working capital requirements
of the Western European operations of the Company's Restricted Subsidiaries
pursuant to commitments outstanding on the Issue Date in an aggregate
amount not to exceed $10 million (or, to the extent non-U.S. dollar
denominated, the U.S. dollar equivalent thereof);
(v) Indebtedness of Autokola not to exceed $35 million in principal
amount in the aggregate which is incurred after the date the relevent Notes
were first issued as a result of it becoming a Subsidiary of the Company;
(vi) Indebtedness of the Company to any Domestic Restricted Subsidiary
which is a Wholly Owned Subsidiary and Indebtedness of any Restricted
Subsidiary to the Company or another Restricted Subsidiary provided that in
the case of Indebtedness of a Domestic Restricted Subsidiary such
Indebtedness is owed to another Domestic Restricted Subsidiary;
(vii) Purchase Money Indebtedness and Capitalized Lease Obligations
incurred to acquire property in the ordinary course of business which
Indebtedness and Capitalized Lease Obligations do not in the aggregate
exceed 5% of the Company's consolidated total assets as of the Company's
most recent quarterly balance sheet;
(viii) Interest Rate Agreements;
(ix) additional Indebtedness of the Company and its Restricted
Subsidiaries not to exceed $50 million in aggregate principal amount
outstanding at any time;
(x) Refinancing Indebtedness;
(xi) Indebtedness incurred in accordance with the covenant described
under "Limitation on Foreign Indebtedness"; and
(xii) Indebtedness of the Company or its Subsidiaries which is
denominated in a currency other than U.S. dollars, provided that (a) the
U.S. dollar equivalent thereof on the date of incurrence (together with the
U.S. dollar equivalent on such date of all other Indebtedness incurred
under this clause (xii)) shall not exceed $80 million, and (b) on the last
Business Day of each month, the sum of (1) the U.S. dollar equivalent of
all Indebtedness outstanding under this clause (xii), and (2) the
outstanding principal amount of Indebtedness under the Amended Credit
Agreement, including reimbursement obligations in respect of letters of
credit (in each case after giving effect to any currency hedging
arrangements applicable thereto to which the Company or a Subsidiary of the
Company is a party), shall not exceed the Permitted Credit Agreement
Amount.
"Permitted Investments" means, for any Person, Investments made on or after
the date of the Indenture consisting of:
(i) Investments by the Company, or by a Restricted Subsidiary thereof,
in the Company or a Restricted Subsidiary;
(ii) Temporary Cash Investments;
(iii) Investments by the Company, or by a Restricted Subsidiary
thereof, 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;
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(iv) reasonable and customary loans made to employees not to exceed $1
million in the aggregate at any one time outstanding;
(v) an Investment that is made by the Company or a Restricted
Subsidiary thereof in the form of any stock, bonds, notes, debentures,
partnership or joint venture interests or other securities that are issued
by a third party to the Company or Restricted Subsidiary solely as partial
consideration for the consummation of an Asset Sale;
(vi) Investments in Unrestricted Subsidiaries and joint ventures
permitted under subclause (v) under the covenant described under
"Limitation on Restricted Payments";
(vii) Investments received in connection with the bankruptcy or
reorganization of Persons having obligations in favor of the Company or its
Subsidiaries (which obligations were incurred in the ordinary course), in
settlement of such obligations; and
(viii) Investment paid for in Common Stock of the Company.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government (including any agency or political subdivision thereof).
"Preferred Stock" means any Capital Stock of a Person, however designated,
which entitles the holder thereof to a preference with respect to dividends,
distributions or liquidation proceeds of such Person over the holders of other
Capital Stock issued by such Person.
"Property" of any Person means all types of real, personal, tangible,
intangible or mixed property owned by such Person whether or not included in the
most recent consolidated balance sheet of such Person and its Subsidiaries under
GAAP.
"Purchase Money Indebtedness" means any Indebtedness incurred in the
ordinary course of business by a Person to finance the cost (including the cost
of construction) of an item of property, the principal amount of which
Indebtedness does not exceed the sum of (i) 100% of such cost and (ii)
reasonable fees and expenses of such Person incurred in connection therewith.
"Refinancing Indebtedness" means Indebtedness that refunds, refinances or
extends any Indebtedness of the Company or its Subsidiaries outstanding on the
Issue Date or other Indebtedness permitted to be incurred by the Company or its
Restricted Subsidiaries pursuant to the terms of the Indenture, but only to the
extent that (i) the Refinancing Indebtedness is subordinated to the Notes to at
least the same extent as the Indebtedness being refunded, refinanced or
extended, if at all, (ii) the Refinancing Indebtedness is scheduled to mature
either (a) no earlier than the Indebtedness being refunded, refinanced or
extended, or (b) after the maturity date of the Notes, (iii) the portion, if
any, of the Refinancing Indebtedness that is scheduled to mature on or prior to
the maturity date of the Notes has a weighted average life to maturity at the
time such Refinancing Indebtedness is incurred that is equal to or greater than
the weighted average life to maturity of the portion of the Indebtedness being
refunded, refinanced or extended that is scheduled to mature on or prior to the
maturity date of the Notes, (iv) such Refinancing Indebtedness is in an
aggregate principal amount that is equal to or less than the sum of (a) the
aggregate principal amount then outstanding under the Indebtedness being
refunded, refinanced or extended, (b) the amount of accrued and unpaid interest,
if any, and any necessary premiums (including the amount of any premium
reasonably determined by the Company or the applicable Restricted Subsidiary as
necessary to accomplish such refunding, refinancing or extension) on such
Indebtedness being refunded, refinanced or extended and (c) the amount of
customary fees, expenses and costs related to the incurrence of such Refinancing
Indebtedness, (v) such Refinancing Indebtedness is incurred by the same Person
that initially incurred the Indebtedness being refunded, refinanced or extended,
except that the Company may incur Refinancing Indebtedness to refund, refinance
or extend Indebtedness of any Wholly Owned Subsidiary of the Company; provided,
however, that any non-Domestic Restricted Subsidiary may incur Refinancing
Indebtedness to refund, refinance or extend Indebtedness of the Company arising
under or in respect of the Amended Credit Agreement in an aggregate amount not
to exceed $20 million outstanding at any time; and, provided, further, that with
respect to such Refinancing Indebtedness referred to in the previous provision,
clauses (ii) and (iii) shall not apply and (vi) if such Indebtedness
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was incurred pursuant to the covenant described under "Limitation on Foreign
Indebtedness" and does not contain any restriction or limitation on the payment
of dividends or the making of other distributions then the Refinancing
Indebtedness shall not contain any such limitation or restriction.
"Restricted Payment" means any of the following: (i) the declaration or
payment of any dividend or any other distribution or payment on Capital Stock of
the Company or any Restricted Subsidiary of the Company or any payment made to
the direct or indirect holders (in their capacities as such) of Capital Stock of
the Company or any Restricted Subsidiary of the Company (other than (x)
dividends or distributions payable solely in Capital Stock (other than
Disqualified Stock) or in options, warrants or other rights to purchase Capital
Stock (other than Disqualified Capital Stock), and (y) in the case of Restricted
Subsidiaries of the Company, dividends or distributions payable to the Company
or to a Wholly-Owned Subsidiary of the Company), (ii) the purchase, redemption
or other acquisition or retirement for value of any Capital Stock of the Company
or any of its Restricted Subsidiaries (other than Capital Stock owned by the
Company or a Wholly Owned Subsidiary of the Company, excluding Disqualified
Capital Stock), (iii) the purchase, defeasance, repurchase, redemption or other
acquisition or retirement for value, prior to any scheduled maturity, scheduled
repayment or scheduled sinking fund payment of, or the making of any principal
payment on, any Indebtedness which is subordinated in right of payment to the
Notes other than subordinated Indebtedness acquired in anticipation of
satisfying a scheduled sinking fund obligation, principal installment or final
maturity (in each case due within one year of the date of acquisition), (iv) the
making of any Investment or guarantee of any Investment in any Person other than
a Permitted Investment, (v) any designation of a Restricted Subsidiary as an
Unrestricted Subsidiary on the basis of the Net Investment by the Company
therein and (vi) forgiveness of any Indebtedness of an Affiliate of the Company
to the Company or a Restricted Subsidiary. For purposes of determining the
amount expended for Restricted Payments, cash distributed or invested shall be
valued at the face amount thereof and property other than cash shall be valued
at its fair market value determined in good faith by the board of directors of
the Company.
"Restricted Subsidiary" means a Subsidiary of the Company other than an
Unrestricted Subsidiary. The Board of Directors of the Company may designate any
Unrestricted Subsidiary or any Person that is to become a Subsidiary as a
Restricted Subsidiary if immediately after giving effect to such action (and
treating any Acquired Indebtedness as having been incurred at the time of such
action), the Company could have incurred at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) pursuant to the "Limitation on
Additional Indebtedness" covenant.
"Sale and Lease-Back Transaction" means any arrangement with any Person
providing for the leasing by the Company or any Restricted Subsidiary of the
Company of any real or tangible personal Property, which property has been or is
to be sold or transferred by the Company or such Restricted Subsidiary to such
Person in contemplation of such leasing.
"Senior Indebtedness" means the principal of and premium, if any, and
interest (including, without limitation, interest accruing or that would have
accrued but for the filing of a bankruptcy, reorganization or other insolvency
proceeding whether or not such interest constitutes an allowable claim in such
proceeding) on, and any and all other fees, charges, expense reimbursement
obligations, indemnities and other amounts due pursuant to the terms of all
agreements, documents and instruments providing for, creating, securing,
guaranteeing or evidencing or otherwise entered into in connection with (a) all
obligations, whether outstanding on the date the relevent Notes were first
issued or thereafter incurred, of the Company owed to lenders under or in
respect of the Amended Credit Agreement, (b) all obligations of the Company with
respect to any Interest Rate Agreement, (c) all obligations of the Company to
reimburse any bank or other person in respect of amounts paid under letters of
credit, acceptances or other similar instruments, (d) all other Indebtedness of
the Company which does not provide that it is to rank pari passu with or
subordinate to the Notes and (e) all deferrals, renewals, extensions,
refundings, refinancings and restructurings of, and amendments, modifications
and supplements to, any of the Senior Indebtedness described above.
Notwithstanding anything to the contrary in the foregoing, Senior Indebtedness
will not include (i) Indebtedness of the Company to any of its Subsidiaries,
(ii) (A) Indebtedness represented by the Notes, and the guarantees thereof under
the June Indenture and (B) Indebtedness represented by the Notes, the 11% Notes
and, in each case, the guarantees thereof, under the July Indenture, (iii) any
Indebtedness which by the express terms of
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<PAGE> 53
the agreement or instrument creating, evidencing or governing the same is junior
or subordinate in right of payment to any item of Senior Indebtedness, (iv) any
trade payable arising from the purchase of goods or materials or for services
obtained in the ordinary course of business, or (v) Indebtedness incurred in
violation of the Indenture.
"Subsidiary" of any specified Person means any corporation, partnership,
joint venture, association or other business entity, whether now existing or
hereafter organized or acquired, (i) in the case of a corporation, of which more
than 50% of the total voting power of the Capital Stock entitled (without regard
to the occurrence of any contingency) to vote in the election of directors,
officers or trustees thereof is held by such first-named Person or any of its
Subsidiaries; or (ii) in the case of a partnership, joint venture, association
or other business entity, with respect to which such first-named Person or any
of its Subsidiaries has the power to direct or cause the direction of the
management and policies of such entity by contract or otherwise or if in
accordance with GAAP such entity is consolidated with the first-named Person for
financial statement purposes.
"Temporary Cash Investments" means (i) Investments in marketable, direct
obligations issued or guaranteed by the United States of America, or of any
governmental agency or political subdivision thereof, maturing within 365 days
of the date of purchase; (ii) Investments in demand deposits or certificates of
deposit issued by a bank organized under the laws of the United States of
America or any state thereof or the District of Columbia, in each case having
capital, surplus and undivided profits totaling more than $500,000,000 and rated
at least A by Standard & Poor's Corporation and A-2 by Moody's Investors
Service, Inc., maturing within 365 days of purchase; (iii) Investments in
commercial paper, maturing not more than 180 days after the date of acquisition,
issued by a corporation (other than an Affiliate of the Company) organized and
in existence under the laws of the United States of America or any foreign
country recognized by the United States of America with a rating at the time as
of which any Investment therein is made of P-1 (or higher) according to Moody's
Investors Service, Inc. or A-1 (or higher) according to Standard & Poor's
Corporation; (iv) in the case of any non-Domestic Restricted Subsidiary,
Investments: (a) in direct obligations of the sovereign nation (or any agency
thereof) in which such non-Domestic Restricted Subsidiary is organized and is
conducting business or in obligations fully and unconditionally guaranteed by
such sovereign nation (or any agency thereof) or (b) of the type and maturity
described in clauses (i) through (iii) above of foreign obligors, which
Investments or obligors (of the parents of such obligors) have ratings described
in such clauses or equivalent ratings from comparable foreign rating agencies;
or (v) Investments not exceeding 365 days in duration in money market funds that
invest substantially all of such funds' assets in the Investments described in
the preceding clauses (i) and (iv).
"TSG" means TSG Capital Fund II, L.P.
"Unrestricted Subsidiary" means (a) any Subsidiary of an Unrestricted
Subsidiary and (b) any Subsidiary of the Company which is classified after the
Issue Date as an Unrestricted Subsidiary by a resolution adopted by the Board of
Directors of the Company; provided that a Subsidiary organized or acquired after
the Issue Date may be so classified as an Unrestricted Subsidiary only if such
classification is in compliance with the covenant set forth under "Limitation on
Restricted Payments." The Trustee shall be given prompt notice by the Company of
each resolution adopted by the board of directors of the Company under this
provision, together with a copy of each such resolution adopted.
"Western Europe" means, with respect to any jurisdictional matter, any of
the twelve current member states of the European Community and Switzerland,
Norway, Sweden, Finland, Austria and the Czech Republic (and "Western European"
shall have a meaning correlative to the foregoing).
"Wholly Owned Subsidiary" means any Restricted Subsidiary all of the
outstanding voting securities (other than directors' qualifying shares or
similar requirements of law in respect of non-Domestic Subsidiaries and other
than shares of Lemmerz representing not more than .01% of the voting securities
thereof) of which are owned, directly or indirectly, by the Company.
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BOOK-ENTRY, DELIVERY AND FORM
The Old Notes were offered and sold to Qualified Institutional Buyers in
reliance on Rule 144A ("Rule 144A Notes"). Old Notes also were offered and sold
in offshore transactions in reliance on Regulation S ("Regulation S Notes").
Rule 144A Notes were initially issued in the form of two global notes in
registered, global form without interest coupons (collectively, the "Restricted
Global Note"). The Restricted Global Note was deposited upon issuance with the
Trustee as custodian for the Depositary Trust Company ("DTC"), in New York, New
York, and registered in the name of DTC or its nominee, in each case for credit
to an account of a direct or indirect participant as described below. Regulation
S Notes were initially issued in the form of one global note in registered,
global form without interest coupons (the "Regulation S Global Note," and,
together with the Restricted Global Note, the "Global Notes"). The Regulation S
Global Note was registered in the name of a nominee of DTC for credit to the
accounts of Euroclear System ("Euroclear") and Cedel Bank, S.A. ("CEDEL") and
deposited with the Trustee as custodian for DTC.
New Notes exchanged for Old Notes through the Book-Entry Transfer Facility
may be represented by one or more Global Notes (the "New Global Notes"). One New
Global Note will be issued with respect to each $200 million aggregate principal
amount of the New Notes. The New Global Notes will be deposited on the date of
the closing of the Exchange Offer (the "Closing Date") with the Trustee, as
custodian of DTC and pursuant to a FAST Balance Certificate Agreement between
the Trustee and DTC and registered in the name of Cede & Co., as nominee of DTC
(such nominee being referred to herein as the "Global Note Holder").
New Notes exchanged for Old Notes which are in the form of registered
definitive certificates (the "Certificated Notes") will be issued in the form of
Certificated Notes. Such Certificated Notes may, unless the New Global Notes
have previously been exchanged for Certificated Notes, be exchanged for an
interest in the New Global Notes representing the principal amount of New Notes
being transferred.
Except as set forth below, the New Global 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. Beneficial interests in the New Global Notes may not be
exchanged for New Notes in certificated form except in the limited circumstances
described below. See "-- Exchange of Book-Entry Notes for Certificated Notes."
DEPOSITORY PROCEDURES
DTC has advised the Company that DTC is a limited purpose trust company
created to hold securities for its participating organizations (collectively,
the "Participants") and to facilitate the clearance and settlement of
transactions in those securities between Participants through electronic
book-entry changes in accounts of its Participants. The Participants include
securities brokers and dealers (including the Initial Purchasers), banks, trust
companies, clearing corporations and certain other organizations. Access to
DTC's system is also available to other entities such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship with
a Participant, either directly or indirectly (collectively, the "Indirect
Participants"). Persons who are not Participants may beneficially own securities
held by or on behalf of DTC only through the Participants or the Indirect
Participants. The ownership interest and transfer of ownership interest of each
actual purchaser of each security held by or on behalf of DTC are recorded on
the records of the Participants and Indirect Participants.
The laws of some 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 New Global Note to such persons may be
limited to that extent. Because DTC can act only on behalf of Participants,
which in turn act on behalf of Indirect Participants and certain banks, the
ability of a person having beneficial interests in a New Global Note to pledge
such interests to persons or entities that do not participate in the DTC system,
or otherwise take actions in respect of such interests, may be affected by the
lack of a physical certificate evidencing such interests.
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EXCEPT AS DESCRIBED BELOW, OWNERS OF INTERESTS IN THE NEW GLOBAL NOTES WILL
NOT HAVE NEW NOTES REGISTERED IN THEIR NAMES, WILL NOT RECEIVE PHYSICAL DELIVERY
OF NEW NOTES IN CERTIFICATED FORM AND WILL NOT BE CONSIDERED THE REGISTERED
OWNERS OR HOLDERS THEREOF UNDER THE INDENTURE FOR ANY PURPOSE.
Payments in respect of the principal of (and premium, if any), and interest
on, a New Global Note registered in the name of DTC or its nominee will be
payable to DTC or its nominee in its capacity as the registered holder under the
Indenture. Under the terms of the Indenture, the Company and the Trustee will
treat the persons in whose names the New Notes, including the New Global Notes,
are registered as the owners thereof for the purpose of receiving such payments
and for any and all other purposes whatsoever. Consequently, neither the
Company, the Trustee nor any agent of the Company or the Trustee has or will
have any responsibility or liability for (i) any aspect or accuracy of DTC's
records or any Participant's or Indirect Participant's records relating to or
payments made on account of beneficial ownership interests in the New Global
Notes, or for maintaining, supervising or reviewing any of DTC's records or any
Participant's or Indirect Participant's records relating to the beneficial
ownership interests in the New Global Notes, or (ii) any other matter relating
to the actions and practices of DTC or any of its Participants or Indirect
Participants.
DTC has advised the Company that its current practice, upon receipt of any
payment in respect of securities such as the New Notes (including principal and
interest), is to credit the accounts of the relevant Participants with the
payment on the payment date, in amounts proportionate to their respective
holdings in principal amount of beneficial interests in the relevant security
such as the New Global Notes as shown on the records of DTC. Payments by the
Participants and the Indirect Participants to the beneficial owners of New Notes
will be governed by standing instructions and customary practices and will not
be the responsibility of DTC, the Trustee or the Company. Neither the Company
nor the Trustee will be liable for any delay by DTC or any of its Participants
in identifying the beneficial owners of the New Notes, and the Company and the
Trustee may conclusively rely on and will be protected in relying on
instructions from DTC or its nominee as the registered owner of the New Notes
for all purposes.
Except for trades in the New Notes involving only Euroclear and CEDEL
participants, interests in the New Global Notes will trade in DTC's Same-Day
Funds Settlement System and secondary market trading activity in such interests
will therefore settle in immediately available funds, subject in all cases to
the rules and procedures of DTC and its Participants.
Transfers between Participants in DTC will be effected in accordance with
DTC's procedures, and will be settled in same-day funds. Transfers between
accountholders in Euroclear and CEDEL will be effected in the ordinary way in
accordance with their respective rules and operating procedures.
Subject to compliance with the transfer restrictions applicable to the New
Notes described herein, cross-market transfers between the accountholders in
DTC, on the one hand, and directly or indirectly through Euroclear or CEDEL
accountholders, on the other hand, will be effected through DTC in accordance
with DTC's rules on behalf of Euroclear or CEDEL, as the case may be, by its
respective depositary; however, such cross-market transactions will require
delivery of instructions to Euroclear or CEDEL, as the case may be, by the
counterpart in such system in accordance with the rules and procedures and
within the established deadlines (Brussels time) of such system. Euroclear or
CEDEL, as the case may be, will, if the transaction meets its settlement
requirements, deliver instructions to its respective depositary to take action
to effect final settlement on its behalf by delivering or receiving interests in
the relevant New Global Note in DTC, and making or receiving payment in
accordance with normal procedures for same-day fund settlement applicable to
DTC. Euroclear accountholders and CEDEL accountholders may not deliver
instructions directly to the depositories for Euroclear or CEDEL.
Because of time zone differences, the securities account of a Euroclear or
CEDEL accountholders purchasing an interest in a New Global Note from
accountholders in DTC will be credited, and any such crediting will be reported
to the relevant Euroclear or CEDEL participant, during the securities settlement
processing day (which must be a business day for Euroclear or CEDEL) immediately
following the settlement date of DTC. Cash received in Euroclear or CEDEL as a
result of sales of interests in a New Global Note by or through an Euroclear or
CEDEL accountholder to a Participant in DTC will be received
52
<PAGE> 56
with value on the settlement date of DTC but will be available in the relevant
Euroclear or CEDEL cash account only as of the business day for Euroclear or
CEDEL following DTC's settlement date.
DTC has advised the Company that it will take any action permitted to be
taken by a holder of New Notes only at the direction of one or more Participants
to whose account with DTC interests in the New Global Notes are credited and
only in respect of such portion of the aggregate principal amount of the New
Notes as to which such Participant or Participants has or have given such
direction. However, if any of the events described under "-- Exchange of Book
Entry Notes for Certificated Notes" occur, DTC reserves the right to exchange
the New Global Notes for New Notes in certificated form, and to distribute such
New Notes to its Participants.
The information in this section concerning DTC, Euroclear and CEDEL and
their book-entry systems has been obtained from sources that the Company
believes to be reliable, but the Company takes no responsibility for the
accuracy thereof.
Although DTC has agreed to the foregoing procedures to facilitate transfers
of interests in the New Global Notes among accountholders in DTC, it is under no
obligation to perform or to continue to perform such procedures, and such
procedures may be discontinued at any time. None of the Company, the Initial
Purchasers or the Trustee nor any agent of the Company or Trustee will have any
responsibility for the performance by DTC or their respective accountholders,
Indirect Participants or accountholders of their respective obligations under
the rules and procedures governing their operations.
Exchange of Book-Entry Notes for Certificated Notes
A New Global Note is exchangeable for definitive New Notes in registered
certificated form if (i) DTC (x) notifies the Company that it is unwilling or
unable to continue as depositary for the New Global Note and the Company
thereupon fails to appoint a successor depositary or (y) has ceased to be a
clearing agency registered under the Exchange Act, (ii) the Company, at its
option, notifies the Trustee in writing that it elects to cause the issuance of
the New Notes in certificated form or (iii) there shall have occurred and be
continuing a Default or an Event of Default with respect to the New Notes. In
all cases, certificated New Notes delivered in exchange for any New Global Note
or beneficial interests therein will be registered in the names, and issued in
any approved denominations, requested by or on behalf of the depositary (in
accordance with its customary procedures).
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<PAGE> 57
DESCRIPTION OF OTHER INDEBTEDNESS
The following summary description of certain indebtedness of the Company
(other than the Notes) does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, all the provisions of the 11%
Indenture and the Amended Credit Agreement, copies of which are filed as
exhibits to the Registration Statement of which this Prospectus is a part.
AMENDED CREDIT AGREEMENT
Pursuant to the Amended Credit Agreement (the "Amended Credit Agreement"),
among the Company and the Managing Agents (as defined therein), the Managing
Agents and a syndicate of lenders (the "Lenders") have agreed to lend to the
Company up to $590.5 million in the form of a senior secured loan facility, such
aggregate amount to be allocated among (i) a Tranche A-1 Term Loan Facility in
an aggregate principal amount of $103.0 million (the "Tranche A-1 Facility"),
(ii) a Tranche A-2 Term Loan Facility in an aggregate principal amount of $100
million (the "Tranche A-2 Facility"), (iii) a Tranche B Term Loan Facility in an
aggregate principal amount of $64.9 million (the "Tranche B Facility"), (iv) a
Tranche C Term Loan Facility in an aggregate principal amount of $52.6 million
(the "Tranche C Facility") (collectively, the "Term Loan Facilities"), and (v)
up to $270 million in the form of a senior secured revolving credit facility
(the "Revolving Credit Facility," and, together with the Term Loan Facilities,
the "Loans").
The following terms and descriptions of the Loans are based upon the terms
set forth in the Amended Credit Agreement and related documents.
Use of Proceeds; Maturity. The Tranche A-2 Facility was made available to
the Company and its subsidiaries at the time of the Lemmerz Acquisition. The
entire Tranche A-2 Facility was drawn in a single borrowing on July 1, 1997.
Upon the consummation of the Lemmerz Acquisition (such date is referred to
herein as the "Effective Time"), the Tranche A-1, B and C Term Loan Facilities
were deemed to constitute continuations of the term loan facilities provided for
in the existing Credit Agreement. The Revolving Credit Facility is available
(including through the making of revolving loans and the issuance of letters of
credit) for general corporate purposes of the Company and its subsidiaries. The
Term Loan Facilities have maturity schedules as follows: (i) the Tranche A-1 and
A-2 Facilities will mature on the sixth anniversary of the Effective Time, and
will amortize in quarterly installments; (ii) the Tranche B Facility will mature
on the seventh anniversary of the Effective Time, and will amortize in quarterly
installments; and (iii) the Tranche C Facility will mature on the eighth
anniversary of the Effective Time, and will amortize in quarterly installments.
The Revolving Credit Facility will mature on the sixth anniversary of the
Effective Time. The Amended Credit Agreement requires the Company to reduce the
amount outstanding under the Revolving Credit Facility to $150 million during
any consecutive thirty day period during each fiscal year.
Prepayments; Reduction of Commitments. Loans under the Term Loan Facilities
are required to be prepaid with (i) 75% of excess cash flow, (ii) 100% of the
net cash proceeds of all non-ordinary-course asset sales or other dispositions
of the property by the Company and its subsidiaries (including insurance and
condemnation proceeds), subject to limited exceptions, and (iii) 100% of the net
proceeds of issuances of debt obligations of the Company and its subsidiaries,
subject to limited exceptions. Such mandatory prepayments and commitment
reductions are first allocated pro rata among the Term Loan Facilities and
second to commitments under the Revolving Credit Facility. Within the Term Loan
Facilities such prepayments will be applied, with certain exceptions, pro rata
to the remaining amortization payments under each such facility.
Voluntary prepayments are permitted, in whole or in part, at the option of
the Company, in minimum principal amounts to be agreed upon, without premium or
penalty, subject to reimbursement of the Lenders' redeployment costs in the case
of prepayment of eurocurrency borrowings ("Eurocurrency Loans") other than on
the last day of the relevant interest period. All Term Loan voluntary
prepayments under the Term Loan Facilities are allocated pro rata among the Term
Loan Facilities and, within each such Term Loan Facility, applied, with certain
exceptions, pro rata to the remaining amortization payment under such Term Loan
Facility.
Interest. The interest rates under the Loans will, at the option of the
Company, be based upon either an adjusted eurocurrency rate (the "Eurocurrency
Rate") or the rate which is equal to the highest of CIBC's prime rate, the
federal funds rate plus 1/2 of 1% and the base certificate of deposit rate plus
1% ("ABR") in
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<PAGE> 58
each case plus an applicable margin based on the leverage ratio from time to
time in effect. The applicable margin for ABR Loans ranges from 0% to 1.25%. For
Revolving Credit and Tranche A-1 and A-2 Eurocurrency Loans the applicable
margin ranges from 0.75% to 2.25%. For Tranche B Eurocurrency Loans the
applicable margin ranges from 2.25% to 2.75% and for Tranche C Loans from 2.50%
to 3.00%. Following the first anniversary of the Effective Time, the spreads
above the Adjusted LIBOR and ABR set forth above will decrease in increments to
be agreed upon if the Company satisfies performance tests to be agreed upon and
no event of default under the Amended Credit Agreement exists.
The Company may elect interest periods of 1, 2, 3 or 6 months for
Eurocurrency Loans. Calculation of interest is calculated on the basis of actual
number of days elapsed in a year of 360 days (or 365 or 366 days, as the case
may be, in the case of ABR loans based on the Prime Rate) and interest is
payable at the end of each interest period and, in any event, at least every 3
months.
Collateral and Guarantees. The Loans are guaranteed by the Company and
certain of its existing and future domestic subsidiaries. The Loans are secured
by a first priority lien in substantially all of the properties and assets of
the Company and such respective domestic subsidiaries, now owned or acquired
later, including a pledge of all of the shares of the Company's existing and
future domestic subsidiaries and 65% of the shares of certain of the Company's
existing and future foreign subsidiaries.
Covenants. The Amended Credit Agreement contains covenants restricting the
ability of the Company and its subsidiaries to, among others, (i) declare
dividends or redeem or repurchase capital stock, (ii) prepay, redeem or purchase
debt, (iii) incur liens and engage in sale-leaseback transactions, (iv) make
loans and investments, (v) issue more debt, (vi) amend or otherwise alter debt
and other material agreements, (vii) make capital expenditures, (viii) engage in
mergers, acquisitions and asset sales, (ix) engage in transactions with
affiliates and (x) alter the business it conducts. The Company must also make
certain customary indemnifications of the Managing Agents and their respective
agents and is required to comply with financial covenants with respect to (i) a
maximum leverage ratio, (ii) a minimum interest coverage ratio and (iii) a
minimum fixed charge coverage ratio. The Company is also required to make
certain customary affirmative covenants.
Events of Default. Events of default under the Amended Credit Agreement
include but are not limited to (i) the Company's failure to pay principal or
interest when due, (ii) the Company's material breach of any covenant,
representation or warranty contained in the loan documents, (iii) customary
cross-default provisions, (iv) events of bankruptcy, insolvency or dissolution
of the Company or its subsidiaries, (v) the levy of certain judgments against
the Company, its subsidiaries, or their assets, (vi) certain adverse events
under ERISA plans of the Company or its subsidiaries, (vii) the actual or
asserted invalidity of security documents or guarantees of the Company or its
subsidiaries and (viii) a change of control of the Company.
The preceding discussion of certain of the provisions of the Amended Credit
Agreement is not intended to be exhaustive and is qualified in its entirety by
reference to the provisions of the Amended Credit Agreement.
11% NOTES
In July 1996, Hayes issued the 11% Notes, comprising $250.0 million
aggregate principal amount of 11% Senior Subordinated Notes due 2006, in a
public offering as part of the Motor Wheel Transactions. The 11% Notes are
general unsecured obligations of the Company, are subordinated in right of
payment to Senior Indebtedness of the Company and senior in right of payment to
any current or future subordinated indebtedness of the Company. The 11% Notes
are unconditionally guaranteed, on a senior subordinated basis, as to the
payment of principal, premium, if any, and interest, jointly and severally by
the Company's material Domestic Subsidiaries. Interest on the 11% Notes is
payable in arrears on January 15 and July 15.
The indenture governing the 11% Notes (the "11% Notes Indenture") limits,
among other things: (i) the incurrence of additional domestic and foreign
indebtedness, with certain exceptions; (ii) the making of any Restricted Payment
(as defined in the 11% Notes Indenture); (iii) the incurrence of other senior
subordinated debt; (iv) the create of certain liens; (v) entering into
transactions with affiliates; (vi) the creation of subsidiaries; (vii) the sale
of assets; (viii) the issuance of common stock of subsidiaries; and (ix) the
merger, consolidation or sale of substantially all of the assets of the Company.
The 11% Notes Indenture also provides
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<PAGE> 59
that a holder of the 11% Notes may, under certain circumstances, have the right
to require that the Company repurchase such holder's 11% Notes upon a change of
control.
The 11% Notes mature on July 15, 2006 and may not be redeemed prior to July
15, 2001, provided, however, that the Company may, at any time and from time to
time prior to July 15, 1999, redeem up to 35% of the aggregate principal amount
of the 11% Notes at a price equal to 110% of the aggregate principal amount so
redeemed, plus accrued and unpaid interest to the date of redemption, with the
Net Cash Proceeds (as defined in the 11% Notes Indenture) of one or more Equity
Offerings (as defined in the 11% Notes Indenture) where the proceeds to the
Company of any such Equity Offering at least $35.0 million. On or after July 15,
2001, the Company may, at its option, redeem the 11% Notes, in whole or in part,
on at least 30 days' notice but not more than 60 days' notice to each holder of
the 11% Notes to be redeemed at the prices set forth below, together with
accrued and unpaid interest to the redemption date, if redeemed during the
twelve-month period beginning on July 15 of each year listed below:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2001.............................. 105.500%
2002.............................. 103.667
2003.............................. 101.833
2004 and thereafter............... 100.000
</TABLE>
The preceding discussion of the provisions of the 11% Notes and the 11%
Notes Indenture is not intended to be exhaustive and is qualified in its
entirety by reference to the 11% Notes and the 11% Notes Indenture.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of certain U.S. federal income tax
considerations associated with the exchange of Old Notes for New Notes and the
ownership and disposition of the New Notes by holders who acquire the New Notes
pursuant to the Exchange Offer and who will hold the New Notes as "capital
assets" (generally, property held for investment). The summary is based upon
current laws, regulations, rulings and judicial decisions all of which are
subject to change, possibly with retroactive effect. The discussion below does
not address all aspects of U.S. federal income taxation that may be relevant to
particular holders in the context of their specific investment circumstances or
certain types of holders subject to special treatment under such laws (for
example, financial institutions and tax-exempt organizations). In addition, the
discussion does not address any aspect of state, local or foreign taxation.
For purposes of this discussion, a "U.S. Holder" is an individual who is a
citizen or resident of the United States, a corporation, a partnership or other
entity created under the laws of the United States or any political subdivision
thereof, an estate that is subject to U.S. federal income taxation without
regard to the source of income, or a trust whose administration is subject to
the primary supervision of a United States court and which has one or more
United States fiduciaries who have the authority to control all substantial
decisions of the trust. The term "non-U.S. Holder" means a beneficial owner of
the New Notes who is not a U.S. Holder.
PROSPECTIVE HOLDERS OF THE NEW NOTES ARE URGED TO CONSULT THEIR TAX
ADVISORS CONCERNING THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE
EXCHANGE OF OLD NOTES FOR NEW NOTES AND THE OWNERSHIP AND DISPOSITION OF THE NEW
NOTES AS WELL AS THE APPLICATION OF STATE, LOCAL AND FOREIGN INCOME AND OTHER
TAX LAW.
EXCHANGE OF NOTES
The exchange of Old Notes for New Notes pursuant to the Exchange Offer will
not be treated as an exchange or other taxable event for U.S. federal income tax
purposes because, under United States Treasury regulations, the New Notes will
not be considered to differ materially in kind or extent from the Old Notes.
Rather, the New Notes received by a holder will be treated as a continuation of
the Old Notes in the hands of such holder. As a result, there will be no U.S.
federal income tax consequences to holders who exchange Old
56
<PAGE> 60
Notes for New Notes pursuant to the Exchange Offer and any such holder will have
the same tax basis and holding period in the New Notes as it had in the Old
Notes immediately before the exchange.
U.S. HOLDERS
Interest payable on the New Notes will be includible in the income of a
U.S. Holder in accordance with such holder's regular method of accounting. If a
New Note is redeemed, sold or otherwise disposed of, a U.S. Holder generally
will recognize gain or loss equal to the difference between the amount realized
on the sale or other disposition of such New Note (to the extent such amount
does not represent accrued but unpaid interest) and such holder's tax basis in
the New Note. Subject to the market discount rules discussed below, such gain or
loss will be capital gain or loss and will be long-term if the holder has a
holding period for the New Note (which would include the holding period of the
Old Notes) of more than one year at the time of the disposition. In certain
circumstances, U.S. Holders that are individuals may be entitled to preferential
treatment for net long-term capital gains, including, as a result of recently
enacted legislation, in the case of a capital asset that has been held for more
than 18 months at the time of the disposition.
Under the market discount rules of the Internal Revenue Code of 1986, as
amended (the "Code"), a holder (other than a holder who made the election
described below) who purchased an Old Note with "market discount" (generally
defined as the amount by which the stated redemption price at maturity of the
Old Note exceeds the holder's purchase price) will be required to treat any gain
recognized on the redemption, sale or other disposition of the New Note received
in the exchange as ordinary income to the extent of the market discount that
accrued during the holding period of such New Note (which would include the
holding period of the Old Note). A holder who has elected under applicable Code
provisions to include market discount in income as such discount accrues will
not, however, be required to treat any gain recognized as ordinary income under
these rules. Holders should consult their tax advisors as to the portion of any
gain that would be taxable as ordinary income under these provisions.
NON-U.S. HOLDERS
An investment in the New Notes by a non-U.S. Holder generally will not give
rise to any U.S. federal income tax consequences, unless the interest received
or any gain recognized on the sale, redemption or other disposition of the New
Notes by such holder is treated as effectively connected with the conduct by
such holder of a trade or business in the United States, or, in the case of
gains derived by an individual such individual is present in the United States
for 183 days or more and certain other requirements are met, and certain
identification requirements are met.
PLAN OF DISTRIBUTION
Each broker-dealer who holds Old Notes for its own account as a result of
market making activities or other trading activities and who receives New Notes
in exchange for Old Notes pursuant to the Exchange Offer may be a statutory
underwriter and must acknowledge that it will deliver a prospectus in connection
with any resale of such New Notes. This Prospectus, as it may be amended or
supplemental from time to time, may be used by a broker-dealer in connection
with resales of New Notes received in exchange for Old Notes where such Old
Notes were acquired as a result of market making activities or other trading
activities. The Company acknowledges and each Holder, other than a
broker-dealer, must acknowledge that it is not engaged in, does not intend to
engage in, and has no arrangement or understanding with any person to
participate in a distribution of New Notes. The Company has agreed that, for a
period of 180 days after the Expiration Date, it will make this Prospectus, as
amended or supplemented, available to any broker-dealer for use in connection
with any such resale.
The Company will not receive any proceeds from any sale of New Notes by
broker-dealers. New Notes received by broker-dealers for their own account
pursuant to the Exchange Offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the New 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
57
<PAGE> 61
be made directly to purchasers or to or through brokers or dealers who may
receive compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such New Notes. Any broker-dealer
that resells New 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 New Notes may be deemed to be an "underwriter" within the meaning of the
Securities Act and any profit on any such resale of New Notes and any
commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The Letter of Transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
For a period of 180 days after the Expiration Date, the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal.
The Company has agreed to pay all expenses incident to the Exchange Offer
other than commissions or concessions of any brokers or dealers and will
indemnify the holders of the Notes (including any broker-dealers) against
certain liabilities, including liabilities under the Securities Act.
LEGAL MATTERS
The validity of the issuance of the New Notes will be passed upon for the
Company by Skadden, Arps, Slate, Meagher & Flom LLP.
EXPERTS
The consolidated financial statements of Hayes Wheels International, Inc.
and subsidiaries as of January 31, 1997 and 1996 and for each of the years in
the three-year period ended January 31, 1997 have been incorporated by reference
herein in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of such firm as experts in accounting and auditing.
The consolidated financial statements of Lemmerz Holding GmbH and
subsidiaries as of December 31, 1996 and 1995 and for each of the years in the
two-year period ended December 31, 1996 have been incorporated by reference
herein in reliance upon the report of KPMG Deutsche Treuhand-Gesellschaft
Aktiengesellschaft Wirtschaftsprufungsgesellschaft, independent certified public
accountants, incorporated by reference herein, and upon the authority of such
firm as experts in accounting and auditing.
The consolidated financial statements of MWC Holdings, Inc. at December 31,
1995 and 1994, and for each of the three years in the period ended December 31,
1995 have been incorporated by reference herein and have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report and are included
in reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
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<PAGE> 62
======================================================
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE
MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE
HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE AS OF WHICH
INFORMATION IS GIVEN IN THIS PROSPECTUS. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL
TO MAKE SUCH SOLICITATION.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Incorporation of Certain Documents by
Reference........................... 2
Available Information................. 2
Prospectus Summary.................... 4
Risk Factors.......................... 15
The Exchange Offer.................... 20
Description of the Notes.............. 27
Description of Other Indebtedness..... 54
Certain Federal Income Tax
Considerations...................... 56
Plan of Distribution.................. 57
Legal Matters......................... 58
Experts............................... 58
</TABLE>
UNTIL (90 DAYS AFTER THE DATE OF THIS PROSPECTUS) DEALERS AFFECTING
TRANSACTIONS IN THE NEW NOTES, WHETHER OR NOT PARTICIPATING IN THE EXCHANGE
OFFER, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS OBLIGATION IS IN ADDITION
TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS
AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
======================================================
======================================================
HAYES WHEELS INTERNATIONAL, INC.
[HAYES WHEELS INTERNATIONAL, INC. LOGO]
$250,000,000
9 1/8% SERIES B SENIOR SUBORDINATED NOTES
DUE 2007
$150,000,000
9 1/8% SERIES B SENIOR SUBORDINATED NOTES
DUE 2007
------------------------
PROSPECTUS
------------------------
, 1997
======================================================
<PAGE> 63
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Each of the Registrants has by-law or code of regulation provisions
providing that the Registrants shall indemnify their directors, officers,
employees or agents to the fullest extent permitted by law. Set forth below are
descriptions of the laws of the applicable states of incorporation of the
Registrants. These descriptions are intended only as summaries and are qualified
in their entirety by reference to the applicable laws.
(a) State of Delaware for Hayes Wheels International, Inc., Hayes
Wheels International -- California, Inc., Hayes Wheels International --
Georgia, Inc., Hayes Wheels International -- Indiana, Inc., Hayes Wheels
International -- Mexico, Inc., and MWC Acquisition Sub, Inc.
Section 145 of the Delaware General Corporation Law ("DGCL")
empowers a corporation to indemnify any person who was or is a party or
witness 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 reasons 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 or enterprise. Depending on the
character of the proceeding, a corporation may indemnify against
expenses, costs and fees (including attorneys' fees) judgments, fines
and amounts paid in settlement actually and reasonably incurred in
connection with such action, suit or proceeding if the person
indemnified 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. If the
person indemnified is not wholly successful in such action, suit or
proceeding, but is successful, on the merits or otherwise, in one or
more but less than all claims, issues or matters in such proceeding, he
or she may be indemnified against expenses actually and reasonably
incurred in connection with each successfully resolved claim, issue or
matter. In the case of an action or suit by or in the right of the
corporation, no indemnification may be made in respect to any claim,
issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Court
of Chancery, or the court in which such action or suit was brought,
shall determine that, despite the adjudication of liability, such person
is fairly and reasonably entitled to indemnity for such expenses which
the court shall deem proper. Section 145 provides that, to the extent a
director, officer, employee or agent of a corporation has been
successful in the defense of any action, suit or proceeding referred to
above or in the defense of any claim, issue or manner therein, he or she
shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him or her in connection therewith.
The Company's By-Laws provide for indemnification by the Company of its
directors and officers to the fullest extent permitted by the DGCL. The Company
has purchased insurance on behalf of the present and former directors and
officers of the Company and its subsidiaries against liabilities asserted
against or incurred by them in such capacity or arising out of their status as
such.
The Company has entered into indemnification agreements with each of its
directors pursuant to which the Company has agreed to indemnify such individuals
to the fullest extent permitted under Delaware law.
(b) State of Michigan for Hayes Wheels International -- Michigan, Inc.
The Michigan Business Corporation Act, as amended (the "MBCA"),
provides that a Michigan corporation, such as Hayes Wheels International
-- Michigan, Inc., may indemnify a director, officer, employee or agent
of the corporation against expenses, judgments, fines and amounts paid
in settlement actually and reasonably incurred in connection with any
threatened, pending or completed action, suit or proceeding (other than
an action by or in the right of the corporation) involving the person
indemnified by reason of the fact that the person indemnified is or
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<PAGE> 64
was a director, officer, employee or agent of the corporation, 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 interest 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 MBCA also provides that in
derivative actions, a corporation may indemnify a director, officer,
employee or agent of the corporation against expenses actually and
reasonably incurred by the person indemnified to the extent that the
person indemnified is successful on the merits or otherwise in any such
action, suit or proceeding or in the defense of any claim, issue or
matter therein. Under the MBCA, no indemnification shall be made with
respect to any claim, issue or matter as to which the person indemnified
shall have been adjudged to be liable to the corporation unless and only
to the extent that the court shall determine upon application that,
despite the adjudication of liability but in view of all of the
circumstances of the case, the person indemnified is fairly and
reasonably entitled to indemnify for such expenses which the court shall
deem proper. The MBCA also generally permits the advancement of
reasonable expenses and empowers the corporation to purchase and
maintain directors' and officers' insurance.
(c) State of Ohio for Motor Wheel Corporation
The Ohio Revised Code provides that a Company 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, by reason of the fact
that he is or was a director, officer, employee of the company or agent
of such company, or is or was serving at the request of the company as a
director, trustee, officer, employee or agent of another corporation,
domestic or foreign, nonprofit or for profit, partnership, joint
venture, trust or other enterprise.
II-2
<PAGE> 65
ITEM 21. EXHIBITS.
The following exhibits are filed as part of this Registration Statement:
EXHIBIT NO. DESCRIPTION
- ----------- -----------
1.1 Purchase Agreement, dated June 19, 1997, by and among the
Company, the Subsidiary Guarantors and CIBC Wood Gundy
Securities Corp., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Bear, Stearns & Co. Inc., Morgan Stanley & Co.
Inc. and Salomon Brothers Inc.
1.2 Purchase Agreement, dated July 16, 1997 by and among the
Company, the Subsidiary Guarantors, CIBC Wood Gundy
Securities Corp. and Merrill Lynch, Pierce, Fenner & Smith
Incorporated.
**2.1 Agreement and Plan of Merger, dated as of March 28, 1996, by
and between the Company and MWC Holdings, Inc. (incorporated
by reference to Exhibit 2 of the Company's Current Report on
Form 8-K, dated March 28, 1996).
**2.2 Purchase Agreement among the Company, Cromodora Wheels
S.p.A., Lemmerz Holding GmbH and the Shareholders of Lemmerz
Holding Gmbh, dated as of June 6, 1997 (incorporated by
reference to Exhibit 2 of the Company's Current Report on
Form 8-K, dated June 6, 1997).
**4.1 Indenture between the Company, the Guarantors and The Bank
of New York, as Trustee, relating to the June Notes
including the form of Note therein (incorporated by
reference to Exhibit 4.1 of the Company's Current Report on
Form 8-K, dated June 30, 1997).
4.2 Indenture between the Company, the Guarantors and The Bank
of New York, as Trustee, relating to the July Notes
including the form of Note therein.
4.3 Registration Rights Agreement, dated as of June 30, 1997, by
and among the Company, the Guarantors and the Initial
Purchasers.
4.4 Registration Rights Agreement, dated as of July 22, 1997, by
and among the Company, the Guarantors and the Initial
Purchasers.
**4.5 Form of June Notes (included in Exhibit 4.1).
4.6 Form of July Notes (included in Exhibit 4.2).
**4.7 Indenture between the Company and Comerica Bank, as Trustee,
relating to the 11% Notes (incorporated by reference to
Exhibit 4.2 of the Company's Form S-3, File No. 333-03813.
+5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to
the legality of the securities being registered hereby.
**10.1 Amended and Restated Credit Agreement among the Company and
the Lenders thereunder, dated as of June 30, 1997
(incorporated by reference to Exhibit 10.1 of the Company's
Current Report on Form 8-K, dated June 30, 1997).
12.1 Ratio of Earnings to Fixed Charges.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of KPMG Deutsche Treuhand -- Gesellschaft
Aktiengesellschaft Wirtschaftsprufungsgesellschaft.
23.3 Consent of Ernst & Young LLP.
+23.4 Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in Exhibit 5.1).
24 Powers of Attorney (included in the signature pages to the
Registration Statement).
25.1 Form T-1 Statement of Eligibility of Trustee with respect to
the June Notes.
25.2 Form T-1 Statement of Eligibility of Trustee with respect to
the July Notes.
+99.1 Form of Letter of Transmittal.
+99.2 Form of Notice of Guaranteed Delivery.
+99.3 Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
+99.4 Form of Letter to Clients.
- -------------------------
** Previously filed.
+ To be filed by an amendment to this Registration Statement.
II-3
<PAGE> 66
ITEM 22. UNDERTAKINGS.
The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the registration statement 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.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrants
have been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The undersigned 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.
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.
The undersigned registrants hereby undertake to file an application for the
purposes of determining the eligibility of the trustee to act under subsection
(a) of Section 310 of the TIA in accordance with the rules and regulation
prescribed by the Commission under Section 305(b)(2) of the TIA.
II-4
<PAGE> 67
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in The City of Romulus, State of
Michigan, on the date of August 25, 1997.
HAYES WHEELS INTERNATIONAL, INC.
By: /s/ DANIEL M. SANDBERG
------------------------------------
Daniel M. Sandberg
Vice President and General
Counsel
POWER OF ATTORNEY
Each person whose signature appears below hereby authorizes Daniel M.
Sandberg and William D. Shovers, and each of them, as attorney-in-fact and
agents, with full powers of substitution, to sign on his or her behalf,
individually and in the capacities stated below, and to file any and all
amendments (including post-effective amendments) to this Registration Statement
with the Securities and Exchange Commission, granting to said attorney-in-fact
and agents full power and authority to perform any other act on behalf of the
undersigned required to be done in the premises.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ RANKO CUCUZ
- --------------------------------------------------- Chairman of the Board, President
Ranko Cucuz and Chief Executive Officer August 25, 1997
/s/ WILLIAM D. SHOVERS Vice President, Chief Financial
- --------------------------------------------------- Officer and Principal
William D. Shovers Accounting Officer August 25, 1997
/s/ CLEVELAND A. CHRISTOPHE
- ---------------------------------------------------
Cleveland A. Christophe Director August 25, 1997
/s/ TIMOTHY J. CLARK
- ---------------------------------------------------
Timothy J. Clark Director August 25, 1997
/s/ ANDREW R. HEYER
- ---------------------------------------------------
Andrew R. Heyer Director August 25, 1997
/s/ PETER A. JOSEPH
- ---------------------------------------------------
Peter A. Joseph Director August 25, 1997
</TABLE>
II-5
<PAGE> 68
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ HORST KUKWA-LEMMERZ
- ---------------------------------------------------
Horst Kukwa-Lemmerz Director August 25, 1997
/s/ PAUL S. LEVY
- ---------------------------------------------------
Paul S. Levy Director August 25, 1997
/s/ WIENAND MEILICKE
- ---------------------------------------------------
Wienand Meilicke Director August 25, 1997
/s/ JOHN S. RODEWIG
- ---------------------------------------------------
John S. Rodewig Director August 25, 1997
/s/ DAVID Y. YING
- ---------------------------------------------------
David Y. Ying Director August 25, 1997
</TABLE>
II-6
<PAGE> 69
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in The City of Romulus, State of
Michigan, on the date of August 25, 1997.
HAYES WHEELS INTERNATIONAL --
CALIFORNIA, INC.
By: /s/ DANIEL M. SANDBERG
------------------------------------
Daniel M. Sandberg
Vice President
POWER OF ATTORNEY
Each person whose signature appears below hereby authorizes Daniel M.
Sandberg and William D. Shovers, and each of them, as attorney-in-fact and
agents, with full powers of substitution, to sign on his or her behalf,
individually and in the capacities stated below, and to file any and all
amendments (including post-effective amendments) to this Registration Statement
with the Securities and Exchange Commission, granting to said attorney-in-fact
and agents full power and authority to perform any other act on behalf of the
undersigned required to be done in the premises.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ RANKO CUCUZ
- ---------------------------------------------------
Ranko Cucuz Director August 25, 1997
/s/ WILLIAM D. SHOVERS
- ---------------------------------------------------
William D. Shovers Director August 25, 1997
/s/ RONALD L. KOLAKOWSKI
- ---------------------------------------------------
Ronald L. Kolakowski Director August 25, 1997
</TABLE>
II-7
<PAGE> 70
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in The City of Romulus, State of
Michigan, on the date of August 25, 1997.
HAYES WHEELS INTERNATIONAL --
GEORGIA, INC.
By: /s/ DANIEL M. SANDBERG
------------------------------------
Daniel M. Sandberg
Vice President
POWER OF ATTORNEY
Each person whose signature appears below hereby authorizes Daniel M.
Sandberg and William D. Shovers, and each of them, as attorney-in-fact and
agents, with full powers of substitution, to sign on his or her behalf,
individually and in the capacities stated below, and to file any and all
amendments (including post-effective amendments) to this Registration Statement
with the Securities and Exchange Commission, granting to said attorney-in-fact
and agents full power and authority to perform any other act on behalf of the
undersigned required to be done in the premises.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ RANKO CUCUZ
- ---------------------------------------------------
Ranko Cucuz Director August 25, 1997
/s/ WILLIAM D. SHOVERS
- ---------------------------------------------------
William D. Shovers Director August 25, 1997
/s/ RONALD L. KOLAKOWSKI
- ---------------------------------------------------
Ronald L. Kolakowski Director August 25, 1997
</TABLE>
II-8
<PAGE> 71
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in The City of Romulus, State of
Michigan, on the date of August 25, 1997.
HAYES WHEELS INTERNATIONAL --
INDIANA, INC.
By: /s/ DANIEL M. SANDBERG
------------------------------------
Daniel M. Sandberg
Vice President
POWER OF ATTORNEY
Each person whose signature appears below hereby authorizes Daniel M.
Sandberg and William D. Shovers, and each of them, as attorney-in-fact and
agents, with full powers of substitution, to sign on his or her behalf,
individually and in the capacities stated below, and to file any and all
amendments (including post-effective amendments) to this Registration Statement
with the Securities and Exchange Commission, granting to said attorney-in-fact
and agents full power and authority to perform any other act on behalf of the
undersigned required to be done in the premises.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ RANKO CUCUZ
- ---------------------------------------------------
Ranko Cucuz Director August 25, 1997
/s/ WILLIAM D. SHOVERS
- ---------------------------------------------------
William D. Shovers Director August 25, 1997
/s/ RONALD L. KOLAKOWSKI
- ---------------------------------------------------
Ronald L. Kolakowski Director August 25, 1997
</TABLE>
II-9
<PAGE> 72
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in The City of Romulus, State of
Michigan, on the date of August 25, 1997.
HAYES WHEELS INTERNATIONAL --
MEXICO, INC.
By: /s/ DANIEL M. SANDBERG
------------------------------------
Daniel M. Sandberg
Vice President
POWER OF ATTORNEY
Each person whose signature appears below hereby authorizes Daniel M.
Sandberg and William D. Shovers, and each of them, as attorney-in-fact and
agents, with full powers of substitution, to sign on his or her behalf,
individually and in the capacities stated below, and to file any and all
amendments (including post-effective amendments) to this Registration Statement
with the Securities and Exchange Commission, granting to said attorney-in-fact
and agents full power and authority to perform any other act on behalf of the
undersigned required to be done in the premises.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ RANKO CUCUZ
- ---------------------------------------------------
Ranko Cucuz Director August 25, 1997
/s/ WILLIAM D. SHOVERS
- ---------------------------------------------------
William D. Shovers Director August 25, 1997
/s/ DANIEL M. SANDBERG
- ---------------------------------------------------
Daniel M. Sandberg Director August 25, 1997
</TABLE>
II-10
<PAGE> 73
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in The City of Romulus, State of
Michigan, on the date of August 25, 1997.
HAYES WHEELS INTERNATIONAL --
MICHIGAN, INC.
By: /s/ DANIEL M. SANDBERG
------------------------------------
Daniel M. Sandberg
Vice President
POWER OF ATTORNEY
Each person whose signature appears below hereby authorizes Daniel M.
Sandberg and William D. Shovers, and each of them, as attorney-in-fact and
agents, with full powers of substitution, to sign on his or her behalf,
individually and in the capacities stated below, and to file any and all
amendments (including post-effective amendments) to this Registration Statement
with the Securities and Exchange Commission, granting to said attorney-in-fact
and agents full power and authority to perform any other act on behalf of the
undersigned required to be done in the premises.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ RANKO CUCUZ
- ---------------------------------------------------
Ranko Cucuz Director August 25, 1997
/s/ WILLIAM D. SHOVERS
- ---------------------------------------------------
William D. Shovers Director August 25, 1997
/s/ RONALD L. KOLAKOWSKI
- ---------------------------------------------------
Ronald L. Kolakowski Director August 25, 1997
</TABLE>
II-11
<PAGE> 74
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in The City of Romulus, State of
Michigan, on the date of August 25, 1997.
MOTOR WHEEL CORPORATION
By: /s/ DANIEL M. SANDBERG
------------------------------------
Daniel M. Sandberg
Vice President
POWER OF ATTORNEY
Each person whose signature appears below hereby authorizes Daniel M.
Sandberg and William D. Shovers, and each of them, as attorney-in-fact and
agents, with full powers of substitution, to sign on his or her behalf,
individually and in the capacities stated below, and to file any and all
amendments (including post-effective amendments) to this Registration Statement
with the Securities and Exchange Commission, granting to said attorney-in-fact
and agents full power and authority to perform any other act on behalf of the
undersigned required to be done in the premises.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ RANKO CUCUZ
- ---------------------------------------------------
Ranko Cucuz Director August 25, 1997
/s/ WILLIAM D. SHOVERS
- ---------------------------------------------------
William D. Shovers Director August 25, 1997
/s/ DANIEL M. SANDBERG
- ---------------------------------------------------
Daniel M. Sandberg Director August 25, 1997
</TABLE>
II-12
<PAGE> 75
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in The City of Romulus, State of
Michigan, on the date of August 25, 1997.
MWC ACQUISITION SUB, INC.
By: /s/ DANIEL M. SANDBERG
------------------------------------
Daniel M. Sandberg
Vice President
POWER OF ATTORNEY
Each person whose signature appears below hereby authorizes Daniel M.
Sandberg and William D. Shovers, and each of them, as attorney-in-fact and
agents, with full powers of substitution, to sign on his or her behalf,
individually and in the capacities stated below, and to file any and all
amendments (including post-effective amendments) to this Registration Statement
with the Securities and Exchange Commission, granting to said attorney-in-fact
and agents full power and authority to perform any other act on behalf of the
undersigned required to be done in the premises.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ RANKO CUCUZ
- ---------------------------------------------------
Ranko Cucuz Director August 25, 1997
/s/ WILLIAM D. SHOVERS
- ---------------------------------------------------
William D. Shovers Director August 25, 1997
/s/ DANIEL M. SANDBERG
- ---------------------------------------------------
Daniel M. Sandberg Director August 25, 1997
</TABLE>
II-13
<PAGE> 76
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
1.1 Purchase Agreement, dated June 19, 1997, by and among the
Company, the Subsidiary Guarantors and CIBC Wood Gundy
Securities Corp., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Bear, Stearns & Co. Inc., Morgan Stanley & Co.
Inc. and Salomon Brothers Inc.
1.2 Purchase Agreement, dated July 16, 1997 by and among the
Company, the Subsidiary Guarantors, CIBC Wood Gundy
Securities Corp. and Merrill Lynch, Pierce, Fenner & Smith
Incorporated.
**2.1 Agreement and Plan of Merger, dated as of March 28, 1996, by
and between the Company and MWC Holdings, Inc. (incorporated
by reference to Exhibit 2 of the Company's Current Report on
Form 8-K, dated March 28, 1996).
**2.2 Purchase Agreement among the Company, Cromodora Wheels
S.p.A., Lemmerz Holding GmbH and the Shareholders of Lemmerz
Holding Gmbh, dated as of June 6, 1997 (incorporated by
reference to Exhibit 2 of the Company's Current Report on
Form 8-K, dated June 6, 1997).
**4.1 Indenture between the Company, the Guarantors and The Bank
of New York, as Trustee, relating to the June Notes
including the form of Note therein (incorporated by
reference to Exhibit 4.1 of the Company's Current Report on
Form 8-K, dated June 30, 1997).
4.2 Indenture between the Company, the Guarantors and The Bank
of New York, as Trustee, relating to the July Notes
including the form of Note therein.
4.3 Registration Rights Agreement, dated as of June 30, 1997, by
and among the Company, the Guarantors and the Initial
Purchasers.
4.4 Registration Rights Agreement, dated as of July 22, 1997, by
and among the Company, the Guarantors and the Initial
Purchasers.
**4.5 Form of June Notes (included in Exhibit 4.1).
4.6 Form of July Notes (included in Exhibit 4.2).
**4.7 Indenture between the Company and Comerica Bank, as Trustee,
relating to the 11% Notes (incorporated by reference to
Exhibit 4.2 of the Company's Form S-3, File No. 333-03813.
+5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to
the legality of the securities being registered hereby.
**10.1 Amended and Restated Credit Agreement among the Company and
the Lenders thereunder, dated as of June 30, 1997
(incorporated by reference to Exhibit 10.1 of the Company's
Current Report on Form 8-K, dated June 30, 1997).
12.1 Ratio of Earnings to Fixed Charges.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of KPMG Deutsche Treuhand -- Gesellschaft
Aktiengesellschaft Wirtschaftsprufungsgesellschaft.
23.3 Consent of Ernst & Young LLP.
+23.4 Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in Exhibit 5.1).
24 Powers of Attorney (included in the signature pages to the
Registration Statement).
25.1 Form T-1 Statement of Eligibility of Trustee with respect to
the June Notes.
25.2 Form T-1 Statement of Eligibility of Trustee with respect to
the July Notes.
+99.1 Form of Letter of Transmittal.
+99.2 Form of Notice of Guaranteed Delivery.
<PAGE> 77
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
+99.3 Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
+99.4 Form of Lett to Clients.
</TABLE>
- -------------------------
** Previously filed.
+ To be filed by an amendment to this Registration Statement.
<PAGE> 1
EXHIBIT 1.1
HAYES WHEELS INTERNATIONAL, INC.
$250,000,000
9 1/8% Senior Subordinated Notes due 2007
PURCHASE AGREEMENT
June 19, 1997
CIBC WOOD GUNDY SECURITIES CORP.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
BEAR, STEARNS & CO. INC.
MORGAN STANLEY & CO. INCORPORATED
SALOMON BROTHERS INC
c/o CIBC Wood Gundy Securities Corp.
425 Lexington Avenue
3rd Floor
New York, New York 10017
Ladies and Gentlemen:
Hayes Wheels International, Inc., a Delaware corporation (the
"Company"), and each of the Company's subsidiaries listed in Exhibit A hereto
(each, a "Subsidiary Guarantor" and, collectively, the "Subsidiary Guarantors"
and, together with the Company, the "Issuers") hereby confirm their agreement
with you (the "Initial Purchasers"), as set forth below.
1. The Securities. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to the Initial Purchasers
$250,000,000 aggregate principal amount of its 9-1/8% Senior Subordinated Notes
due 2007 (the "Notes"). The obligations of the Company under the Indenture (as
hereinafter defined) and the Notes will be unconditionally guaranteed (the
"Guarantees"), on a joint and several basis, by each Subsidiary Guarantor. The
Notes and the Guarantees are to be issued pursuant to the Indenture (the
"Indenture"), dated June 30, 1997, among the Company, The Bank of New York, a
New York corporation, as trustee (the "Trustee"), and the Subsidiary
Guarantors. The Notes and the Guarantees are hereinafter referred to
collectively as the "Securities."
The sale of the Securities to the Initial Purchasers (the "Offering")
will be made without registration of the Securities under the Securities Act of
1933, as amended, (the "Act") and the rules and regulations of the Securities
and Exchange Commission (the "Commission") thereunder, in reliance
<PAGE> 2
-2-
upon the exemption therefrom provided by Section 4(2) of the Act. Holders of
the Securities will have the benefits of a Registration Rights Agreement to be
dated as of June 30, 1997 among the Issuers and the Initial Purchasers (the
"Registration Rights Agreement").
In connection with the sale of the Securities, the Company has
prepared a preliminary offering memorandum dated June 12, 1997 (the
"Preliminary Memorandum") and prepared a final offering memorandum dated
June 19, 1997 (the "Final Memorandum" and, together with the Preliminary
Memorandum, the "Memorandum") setting forth or including a description of the
terms of the Securities, the terms of the Offering, a description of the
Company and any material developments relating to the Company occurring after
the date of the most recent financial statements included therein.
The Securities are being issued and sold in connection with the
acquisition (the "Acquisition") by the Company of Lemmerz Holding GmbH, a
limited liability company organized under the laws of the Federal Republic of
Germany ("Lemmerz"), pursuant to the Purchase Agreement (the "Acquisition
Agreement"), dated June 6, 1997, among the Company, Cromodora Wheels S.p.A.,
Lemmerz and the shareholders of Lemmerz, pursuant to which the Company will
purchase the capital stock of Lemmerz for (i) $200 million in cash and (ii)
convertible preferred stock of the Company which, following stockholder
approval, will automatically convert into 5 million shares of newly issued
common stock of the Company. The cash portion of the consideration, the
refinancing of existing Lemmerz debt, working capital of the Company and the
fees and expenses of the Lemmerz Acquisition will be financed with the proceeds
from the Offering and borrowings under an amended $740.5 million senior secured
term loan facility (the "Credit Agreement") among the Company, Canadian
Imperial Bank of Commerce, as administrative agent, Merrill Capital
Corporation, as documentation agent, and the other financial institutions party
thereto, as lenders. The time of the consummation of the Acquisition is herein
referred to as the "Effective Time."
In connection with the Acquisition, the Company is soliciting
consents from holders of its 11% Senior Subordinated Notes due 2006 (the "Old
Notes") to amendments (the "Proposed Amendments") to certain of the provisions
in the indenture governing the Old Notes (the "Old Indenture"), as described
in the Consent Solicitation Statement dated June 12, 1997, the related form of
Consent and instructions thereto and any supplemental materials attached
thereto (the "Consent Solicitation"). After
<PAGE> 3
-3-
receipt of the required consents from the holders of the Old Notes, the
Company, the Subsidiary Guarantors parties to the Old Indenture and the trustee
under the Old Indenture will enter into a supplemental indenture to give effect
to the Proposed Amendments.
The Acquisition Agreement and the documents entered into in
connection therewith including, without limitation, the agreements attached
thereto as exhibits, are herein collectively referred to as the "Acquisition
Documents." This Agreement, the Securities, the Exchange Notes (as defined in
the Registration Rights Agreement), the Private Exchange Notes (as defined in
the Registration Rights Agreement), the Registration Rights Agreement and the
Indenture are herein collectively referred to as the "Offering Documents."
The Acquisition Documents, the Offering Documents and the Credit Agreement are
herein collectively referred to as the "Transaction Documents." The Offering,
the Acquisition, the Consent Solicitation and the execution of and borrowing
under the Credit Agreement are collectively referred to as the "Transactions."
2. Representations and Warranties of the Issuers. The Issuers,
jointly and severally, represent and warrant to and agree with the Initial
Purchasers that:
(a) Each of the Preliminary Memorandum and the Final Memorandum, as
of its respective date and, in the case of the Final Memorandum, at the
Closing Date (as defined in Section 3 hereof), did not and will not
contain any 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,
except that the representations and warranties set forth in this Section
2(a) do not apply to statements or omissions that are made in reliance
upon and in conformity with information relating to the Initial
Purchasers furnished to the Company in writing by the Initial Purchasers
expressly for use in the Preliminary Memorandum or the Final Memorandum
or any amendment or supplement thereto, which information is set forth in
Section 15.
(b) Each of the Issuers and the Subsidiaries (as hereinafter
defined) that is a corporation organized under the laws of a
jurisdiction of the United States has been and at and as of the Effective
Time will be duly incorporated and each of the Issuers and each
Subsidiary that is a corporation organized under the laws of a
jurisdiction
<PAGE> 4
-4-
of the United States is and at and as of the Effective Time will be
validly existing in good standing as a corporation under the laws of its
jurisdiction of incorporation, with the requisite corporate power and
authority to own its properties and conduct its business as now conducted
as described in the Memorandum, is and at and as of the Effective Time
will be duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions where the ownership or leasing of its
properties or the conduct of its business requires such qualification,
except where the failure to be so qualified would not, individually or in
the aggregate, have a material adverse effect on the business, condition
(financial or other) or results of operations of any of the Issuers, the
Subsidiaries, Lemmerz and each of the Lemmerz Subsidiaries, taken as a
whole (any such event a "Material Adverse Effect"); each of the Issuers
and the Subsidiaries that is not a corporation organized under the laws
of a jurisdiction of the United States, and, to the best knowledge of
the Issuers, after due inquiry, Lemmerz and each of the Lemmerz
Subsidiaries has been and at and as of the Effective Time will be duly
organized and validly existing under the laws of the jurisdiction in
which it is so organized, with the requisite power and authority to own
its properties and conduct its business as now conducted and as described
in the Memorandum; the Company had as of the date specified therein the
authorized, issued and outstanding capitalization set forth in the Final
Memorandum; except as set forth in Exhibit B-1 hereto and for the
Subsidiary Guarantors (collectively, the "Subsidiaries"), the Company
does not have any subsidiaries and, to the best knowledge of the Company,
after due inquiry, except as set forth in Exhibit B-2 hereto (the
"Lemmerz Subsidiaries"), Lemmerz does not have any subsidiaries or own
directly or indirectly any of the capital stock or other equity
securities of any other person; all of the outstanding shares of capital
stock of the Issuers and the Subsidiaries have been, and to the best
knowledge of the Issuers, after due inquiry, all of the outstanding
shares of capital stock of Lemmerz and the Lemmerz Subsidiaries have
been, duly authorized and validly issued, are fully paid and
nonassessable and were not issued in violation of any preemptive or
similar rights and, in the case of the Subsidiary Guarantors, the
Subsidiaries, and the Lemmerz Subsidiaries except in connection with the
Credit Agreement, are owned free and clear of all liens, encumbrances,
equities and restrictions on transferability (other than those imposed by
the Act and the state securities or "Blue Sky" laws);
<PAGE> 5
-5-
except as set forth in the Final Memorandum, no options, warrants or
other rights to purchase from any Issuer or any Subsidiary or, to the
best knowledge of the Issuers, after due inquiry, except as set forth in
Exhibit B-2, Lemmerz or any Lemmerz Subsidiary, agreements or other
obligations of any Issuer or any Subsidiary or, to the best knowledge of
the Issuers, after due inquiry, Lemmerz or any Lemmerz Subsidiary,
to issue or other rights to convert any obligation into, or exchange any
securities for, shares of capital stock of or ownership interests in any
Issuer or any Subsidiary or Lemmerz or any Lemmerz Subsidiary, are
outstanding.
(c) Each of the Issuers has the required corporate power and
authority to execute, deliver and perform its obligations under the
Indenture, the Securities, the Exchange Notes and the Private Exchange
Notes. The Securities, the Exchange Notes, the Private Exchange
Notes and the guarantees to be endorsed thereon have each been duly and
validly authorized by each of the Issuers for issuance and, when executed
by the Issuers and authenticated by the Trustee in accordance with the
provisions of the Indenture and, in the case of the Securities, delivered
to and paid for by the Initial Purchasers in accordance with the terms
hereof, will have been duly executed, issued and delivered and will
constitute valid and legally binding obligations of the Issuers, entitled
to the benefits of the Indenture and enforceable against the Issuers in
accordance with their terms except that the enforcement thereof may be
limited by (i) bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally or (ii) general principles of equity
(regardless of whether such enforcement is considered in a proceeding at
law or in equity); each of the Issuers has all requisite corporate power
and authority to execute, deliver and perform its obligations under the
Indenture, the Securities, the Exchange Notes and the Private Exchange
Notes, and the Indenture has been duly and validly authorized by the
Issuers and is in a form to be qualified under the Trust Indenture Act of
1939, as amended (the "TIA") and, when executed and delivered by the
Issuers (assuming the due authorization, execution and delivery by the
Trustee), will constitute a valid and legally binding agreement of the
Issuers, enforceable against the Issuers in accordance with its terms
except that the enforcement thereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in ef-
<PAGE> 6
-6-
fect relating to or affecting creditors' rights generally or (ii) general
principles of equity (regardless of whether such enforcement is
considered in a proceeding at law or in equity).
(d) Each of the Issuers has the requisite corporate power and
authority to execute, deliver and perform its obligations under the
Registration Rights Agreement. The Registration Rights Agreement has
been duly and validly authorized by the Issuers and, when executed
and delivered by the Issuers (assuming the due authorization, execution
and delivery by the Initial Purchasers), will constitute a valid and
legally binding agreement of the Issuers, enforceable against the Issuers
in accordance with its terms except (i) that the enforcement thereof may
be subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to or affecting
creditors' rights generally, or general principles of equity (regardless
of whether such enforcement is considered in a proceeding at law or in
equity) and (ii) as any rights to indemnity or contribution thereunder
may be limited by federal and state securities laws and public policy
considerations.
(e) Each of the Issuers has the requisite corporate power and
authority to execute, deliver and perform its obligations under this
Agreement. This Agreement has been duly and validly authorized by the
Issuers and, when executed and delivered by the Issuers, will constitute
a valid and legally binding agreement of the Issuers, enforceable against
the Issuers in accordance with its terms except (i) that the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
or affecting creditors' rights generally or general principles of equity
(regardless of whether such enforcement is considered in a proceeding at
law or in equity) and (ii) as any rights to indemnity or contribution
hereunder may be limited by federal and state securities laws and public
policy considerations.
(f) Each of the Issuers has and, to the best knowledge of the
Issuers, after due inquiry, Lemmerz has all requisite power and
authority to execute, deliver and perform its obligations under each
of the Transaction Documents (other than the Offering Documents) to which
it is a party; each of the Transaction Documents (other than the Offering
Documents), has been duly and validly authorized
<PAGE> 7
-7-
by each of the Issuers and, to the best knowledge of the Issuers, after
due inquiry, Lemmerz to the extent it is a party thereto and each
Transaction Document (other than the Offering Documents), when executed
and delivered, will constitute a valid and legally binding agreement
of such of the Issuers and, to the best knowledge of the Issuers, after
due inquiry, Lemmerz that is a party thereto, enforceable against such of
the Issuers and, to the best knowledge of the Issuers, after due inquiry,
Lemmerz that is a party thereto, in each case in accordance with its
terms (assuming due authorization, execution and delivery of each
Transaction Document by any other party thereto) except (i) that the
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to or affecting creditors' rights generally or general
principles of equity (regardless of whether such enforcement is
considered in a proceeding at law or in equity) and (ii) as any rights to
indemnity or contribution hereunder may be limited by federal and state
securities laws and public policy considerations.
(g) Except as set forth in the Final Memorandum and the consent
pursuant to the lex Friedrich which failure to obtain would not be
material to Lemmerz and the Lemmerz Subsidiaries, taken as a whole, no
consent, approval, authorization or order of any court or governmental
agency or body is required for the performance of any of the Transaction
Documents by the Issuers or, to the best knowledge of the Issuers, after
due inquiry, Lemmerz, to the extent each is or will be a party thereto,
or for the consummation by the Issuers or, to the best knowledge of the
Issuers, after due inquiry, Lemmerz, of any of the transactions
contemplated thereby, except to the extent set forth in the Acquisition
Agreement (including, without limitation, the Lemmerz Disclosure Schedule
and the HWI Disclosure Schedule) for such consents, approvals,
authorizations or orders as have been obtained or made or as may be
required under the Act and the TIA (with respect to the transactions
contemplated by the Registration Rights Agreement) or as may be required
under state securities or "Blue Sky" laws in connection with the purchase
and distribution of the Securities by the Initial Purchasers; and none of
the Issuers or, to the best knowledge of the Issuers, after due inquiry,
Lemmerz or the Lemmerz Subsidiaries, is (i) in violation of its
certificate of incorporation or bylaws, (ii) in violation of any statute,
judgment, decree, order, rule or regulation applicable to
<PAGE> 8
-8-
it or any of its properties or assets, which violation would,
individually or in the aggregate, have a Material Adverse Effect, or
(iii) in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any of the Transaction
Documents or any other contract, indenture, mortgage, deed of trust, loan
agreement, note, lease, license, franchise agreement, permit,
certificate or agreement or instrument to which it is a party or to which
it is subject, which default would, individually or in the aggregate,
have a Material Adverse Effect.
(h) The execution, delivery and performance by the Issuers and, to
the best knowledge of the Issuers, after due inquiry, Lemmerz, of each
of the Transaction Documents to which it is a party, and the consummation
by the Issuers and, to the best knowledge of the Issuers, after due
inquiry, Lemmerz of the transactions contemplated thereby and the
fulfillment of the terms thereof, will not violate, conflict with or
constitute or result in a breach of or a default under (or an event that,
with notice or lapse of time, or both, would constitute a breach of or a
default under) any of (a) the terms or provisions of any indenture,
mortgage, deed of trust, loan agreement, note, lease, license, franchise
agreement, or agreement or instrument to which any of the Issuers or the
Subsidiaries is, or to the best knowledge of the Issuers, after due
inquiry, Lemmerz is, a party or to which any of their respective
properties or assets are subject, which violation, conflict, breach or
default would, individually or in the aggregate, have a Material Adverse
Effect, (b) the certificate of incorporation or bylaws of any of the
Issuers, the Subsidiaries or Lemmerz or (c) (assuming compliance with all
applicable Federal and state securities and "Blue Sky" laws) any statute,
judgment, decree, order, rule or regulation of any court or governmental
agency or other body applicable to the Issuers or the Subsidiaries or, to
the best knowledge of the Issuers, after due inquiry, Lemmerz, or any of
their respective properties or assets, which violation, conflict, breach
or default would, individually or in the aggregate, have a Material
Adverse Effect.
(i) Each of the Transactions has been duly authorized by each of
the Issuers and, to the best knowledge of the Issuers, after due
inquiry, Lemmerz, to the extent each is or will be a party thereto.
<PAGE> 9
-9-
(j) The audited consolidated financial statements and schedules of
each of the Company and Lemmerz included in the Memorandum present fairly
the consolidated financial position, results of operations and cash flows
of the Company and, to the best knowledge of the Issuers, after due
inquiry, Lemmerz, respectively, at the dates and for the periods to
which they relate and have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis, except as
otherwise stated therein; the unaudited consolidated financial statements
and the related notes of the Company and Lemmerz included in the
Memorandum present fairly the consolidated financial position, results of
operations and cash flows of the Company and, to the best knowledge of
the Company, after due inquiry, Lemmerz, respectively, at the dates and
for the periods to which they relate, subject to year-end audit
adjustments, and have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis except as otherwise
stated therein and have been prepared on a basis substantially consistent
with that of the audited financial statements referred to above except as
otherwise stated therein; to the best knowledge of the Company, after due
inquiry, the summary and selected financial and statistical data included
in the Memorandum present fairly the information shown therein and have
been prepared and compiled on a basis consistent with the audited and
unaudited financial statements included therein, except as otherwise
stated therein; and KPMG Peat Marwick LLP and KPMG Deutsche
Treuhand-Gesellschaft Aktiengesellschaft Wirtschaftsprufungsgesellschaft,
which have examined certain of such financial statements and schedules as
set forth in their reports included in the Memorandum, are independent
public accounting firms as required by the Act.
(k) (i) The pro forma financial statements and other pro forma
financial information (including the notes thereto) included in the
Memorandum (A) have been prepared in accordance with applicable
requirements of Rule 11-02 of Regulation S-X promulgated under the Act
and (B) have been properly computed on the bases described therein; (ii)
the assumptions used in the preparation of the pro forma financial
statements and other pro forma financial information included in the
Memorandum are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances referred
to therein.
<PAGE> 10
-10-
(l) Except as described in the Final Memorandum, there is not
pending or, to the best knowledge of the Issuers, threatened any action,
suit, proceeding, inquiry or investigation, governmental or otherwise, to
which any of the Issuers or the Subsidiaries or, to the best knowledge of
the Issuers, after due inquiry, Lemmerz or the Lemmerz Subsidiaries,
is a party, or to which their respective properties or assets are
subject, before or brought by any court, arbitrator or governmental
agency or body, that, if determined adversely to the Issuers or the
Subsidiaries or Lemmerz or the Lemmerz Subsidiaries, would, individually
or in the aggregate, have a Material Adverse Effect or that seeks to
restrain, enjoin, prevent the consummation of or otherwise challenge the
issuance or sale of the Securities to be sold hereunder or the
consummation of the transactions described in the Final Memorandum under
the captions "Use of Proceeds" and "The Lemmerz Acquisition."
(m) The Issuers and the Subsidiaries and, to the best knowledge of
the Issuers, after due inquiry, Lemmerz and the Lemmerz Subsidiaries,
possess adequate licenses or other rights to use all patents, trademarks,
service marks, trade names, copyrights and know-how (i) that are
necessary to conduct their business as described in the Memorandum and
(ii) the loss of which would, individually or in the aggregate, have a
Material Adverse Effect.
(n) None of the Issuers or the Subsidiaries has received and, to
the best knowledge of the Issuers, after due inquiry, none of Lemmerz
or the Lemmerz Subsidiaries has received, any notice of infringement of
or conflict with (or knows of any such infringement of or conflict with)
asserted rights of others with respect to any patents, trademarks,
service marks, trade names, copyrights or know-how that, if such
assertion of infringement or conflict were sustained, would, individually
or in the aggregate, have a Material Adverse Effect.
(o) Each of the Issuers and the Subsidiaries has obtained and, to
the best knowledge of the Issuers, after due inquiry, Lemmerz and the
Lemmerz Subsidiaries have obtained all licenses, permits, franchises and
other governmental authorizations, the lack of which would, individually
or in the aggregate, have a Material Adverse Effect.
(p) Subsequent to the respective dates as of which information is
given in the Final Memorandum and except as described therein, (i) the
Issuers and the Subsidiaries
<PAGE> 11
-11-
have not incurred and, to the best knowledge of the Issuers, after due
inquiry, Lemmerz and the Lemmerz Subsidiaries, taken as a whole, have not
incurred any material liabilities or obligations, direct or contingent,
or entered into any material transactions, in either case whether or not
in the ordinary course of business, and (ii) the Issuers and the
Subsidiaries or, to the best knowledge of the Issuers, after due inquiry,
Lemmerz and the Lemmerz Subsidiaries, taken as a whole, have not
purchased any of their respective outstanding capital stock, or declared,
paid or otherwise made any dividend or distribution of any kind on any of
their respective capital stock or otherwise.
(q) None of the Issuers or the Subsidiaries or, to the best
knowledge of the Issuers, after due inquiry, Lemmerz or the Lemmerz
Subsidiaries, has taken or will take any action that would cause this
Agreement or the issuance or sale of the Securities to violate Regulation
G, T, U or X of the Board of Governors of the Federal Reserve System, in
each case as in effect, or as the same may hereafter be in effect, on the
Closing Date.
(r) Each of the Issuers and the Subsidiaries has and, to the best
knowledge of the Issuers, after due inquiry, each of Lemmerz and the
Lemmerz Subsidiaries has, good and marketable title to all real property
described in the Final Memorandum as being owned by it and good and
marketable title to the leasehold estate in the real property described
therein as being leased by it, free and clear of all liens, charges,
encumbrances or restrictions, except, in each case, as described in the
Final Memorandum or such as would not, individually or in the aggregate,
have a Material Adverse Effect.
(s) Each of the Issuers and the Subsidiaries has and, to the best
knowledge of the Issuers, after due inquiry, each of Lemmerz and the
Lemmerz Subsidiaries has, filed all necessary federal, state and foreign
income and franchise tax returns, except where the failure to so file
such returns would not, individually or in the aggregate, have a Material
Adverse Effect; and, other than taxes due thereon or tax deficiencies
which any Issuer or Subsidiary or, to the best knowledge of the Issuers,
after due inquiry, any of Lemmerz or the Lemmerz Subsidiaries, is
contesting in good faith and for which any Issuer or Subsidiary or, to
the best knowledge of the Issuers, after due inquiry, either Lemmerz or
the Lemmerz Subsidiaries
<PAGE> 12
-12-
reasonably believe that it has provided adequate reserves, has paid all
taxes due thereon and there is no tax deficiency that has been asserted
against any Issuer or Subsidiary or, to the best knowledge of the
Issuers, after due inquiry, either Lemmerz or the Lemmerz Subsidiaries
that would, individually or in the aggregate, have a Material Adverse
Effect.
(t) (i) Immediately after the consummation of the Acquisition and
the other transactions contemplated by the Transaction Documents, the
fair value and present fair saleable value of the assets of the Company
will exceed the sum of its stated liabilities and identified contingent
liabilities; and (ii) the Company is not, nor will it be, after giving
effect to the execution, delivery and performance of the Transaction
Documents, to the extent it is a party thereto, and the consummation of
the transactions contemplated thereby, (a) left with unreasonably small
capital with which to carry on its business as it is proposed to be
conducted, (b) unable to pay its debts (contingent or otherwise) as they
mature or (c) insolvent.
(u) Assuming the accuracy of the Initial Purchasers'
representations and warranties set forth in Section 5 hereof, and the
due performance by the Initial Purchasers of the covenants and
agreements set forth in Section 5 hereof, the offer and sale of the
Securities to the Initial Purchasers in the manner contemplated by this
Agreement and the Final Memorandum does not require registration under
the Act and the Indenture does not require qualification under the TIA.
(v) No securities of the Company or any of its Subsidiaries are (i)
of the same class (within the meaning of Rule 144A under the Act) as
the Securities and (ii) listed on a national securities exchange
registered under Section 6 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or quoted in a U.S. automated interdealer
quotation system.
(w) None of the Issuers or the Subsidiaries, any of their
respective Affiliates or any person acting on their behalf (other than
the Initial Purchasers) has, and, to the best knowledge of the
Issuers, after due inquiry, Lemmerz and the Lemmerz Subsidiaries have
not, engaged in any directed selling efforts (as that term is defined in
Regulation S under the Act ("Regulation S")) with respect to the
Securities; and the Issuers, the Subsidiaries, their
<PAGE> 13
-13-
respective Affiliates and any person acting on their behalf (other than
the Initial Purchasers) have acted in accordance with the offering
restrictions requirements of Regulation S.
(x) (i) The Issuers have delivered to the Initial Purchasers a true
and correct copy of each of the Transaction Documents that have been
executed and delivered prior to the date of this Agreement and each other
Transaction Document in the form substantially as it will be executed and
delivered on or prior to the Closing Date, together with all related
agreements and all schedules and exhibits thereto, and as of the date
hereof there have been no material amendments, alterations, modifications
or waivers of any of the provisions of any of the Transaction Documents
since their date of execution or from the form in which any such
Transaction Document has been delivered to the Initial Purchasers; and
(ii) there exists as of the date hereof (after giving effect to the
transactions contemplated by each of the Transaction Documents) no event
or condition that would constitute a default or an event of default (in
each case as defined in each of the Transaction Documents) under any of
the Transaction Documents that would result in, individually or in the
aggregate, a Material Adverse Effect or materially adversely effect the
ability of the Company or to the best knowledge of the Issuers, after due
inquiry, Lemmerz to consummate the Acquisition and the other
Transactions.
(y) Except as disclosed in the Final Memorandum and except as would
not individually or in the aggregate have a Material Adverse Effect,
(A) each of the Issuers and the Subsidiaries is and, to the best
knowledge of the Issuers, after due inquiry, each of Lemmerz and the
Lemmerz Subsidiaries is, in compliance with all applicable Environmental
Laws, (B) each of the Issuers and the Subsidiaries has and, to the best
knowledge of the Issuers, after due inquiry, each of Lemmerz and the
Lemmerz Subsidiaries has, made all filings and provided all notices
required under any applicable Environmental Law, and has all permits,
authorizations and approvals required under any applicable Environmental
Laws and is in compliance with their requirements, (C) there are no
pending or, to the best knowledge of the Issuers, after due inquiry,
threatened Environmental Claims against any of the Issuers or the
Subsidiaries or to the best knowledge of the Issuers, after due inquiry,
Lemmerz or the Lemmerz Subsidiaries and (D) none of the Issuers or the
Subsidiaries has and, to
<PAGE> 14
-14-
the best knowledge of the Issuers, after due inquiry, neither Lemmerz nor
the Lemmerz Subsidiaries have knowledge of any circumstances with respect
to any of their respective properties or operations that could reasonably
be anticipated to form the basis of an Environmental Claim against
any of them or any of their subsidiaries or any of their respective
properties or operations and the business operations relating thereto
which Environmental Claims would, individually or in the aggregate, have
a Material Adverse Effect.
For purposes of this Agreement, the following terms shall have the
following meanings: "Environmental Law" means any federal, state, local
or municipal statute, law, rule, regulation, ordinance, code or rule and
any judicial or administrative interpretation thereof, including any
judicial or administrative order, consent decree or judgment binding on
any of the Issuers or the Subsidiaries or Lemmerz or the Lemmerz
Subsidiaries, relating to pollution or protection of the environment or
health or safety or any chemical, material or substance that is subject
to regulation thereunder. "Environmental Claims" means any and all
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, written notices of responsibility, information requests,
liens, written notices of noncompliance or violation, investigations or
proceedings relating in any way to any Environmental Law.
(z) None of the Issuers or the Subsidiaries and, to the best
knowledge of the Issuers, after due inquiry, none of Lemmerz or the
Lemmerz Subsidiaries is required to register as an "investment company"
or a company "controlled by" an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
(aa) Except as stated in the Final Memorandum, none of the Issuers
or the Subsidiaries or, to the best knowledge of the Issuers, after due
inquiry, none of Lemmerz or the Lemmerz Subsidiaries or any of their
respective directors, officers or controlling persons, has taken,
directly or indirectly, any action designed, or that might reasonably be
expected, to cause or result, under the Act or otherwise, in, or that has
constituted, stabilization or manipulation of the price of any security
of any Issuer to facilitate the sale or resale of the Securities (it
being understood that no representation or warranty is made as to any
actions by the Initial Purchasers).
<PAGE> 15
-15-
3. Purchase, Sale and Delivery of the Securities. On the basis of the
representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Issuers agree to
issue and sell to the Initial Purchasers, and each of the Initial Purchasers
severally agrees to purchase from the Issuers, at 97.5% of their principal
amount, the respective aggregate principal amounts of the Securities set forth
opposite their respective names on Exhibit C hereto. The obligations of the
Initial Purchasers under this Agreement are several and not joint. One or more
certificates in definitive form for the Securities that the Initial Purchasers
have agreed to purchase hereunder, and in such denomination or denominations
and registered in such name or names as each Initial Purchaser requests upon
notice to the Company at least 48 hours prior to the Closing Date, shall be
delivered by or on behalf of the Company, against payment by or on behalf of
the Initial Purchasers of the purchase price therefor by wire transfer of
immediately available funds net of the overnight cost of such funds to the
account of the Company previously designated by it in writing. Such delivery
of and payment for the Securities shall be made at the offices of Skadden,
Arps, Slate, Meagher & Flom, 919 Third Avenue, New York, New York 10022, at
9:00 a.m., New York time, on June 30, 1997, or at such date as the Initial
Purchasers and the Company may agree upon, such time and date of delivery
against payment being herein referred to as the "Closing Date." The Company
will make such certificate or certificates for the Securities available for
checking and packaging by the Initial Purchasers at the offices in New York,
New York of CIBC Wood Gundy Securities Corp. at least 24 hours prior to the
Closing Date.
4. Registration Rights of Holders of Securities. The Initial
Purchasers and their direct and indirect transferees of the Securities will
have such rights with respect to the registration thereof under the Act and
qualification of the Indenture under the TIA as are set forth in the
Registration Rights Agreement.
5. Resale of Securities. Each Initial Purchaser represents and
warrants to, and agrees with, the Company that (a) it is a "qualified
institutional buyer" as defined in Rule 144A under the Act ("QIB"); (b) it
has not and will not, directly or indirectly, solicit offers for, or offer or
sell, the Securities by any form of general solicitation or general advertising
(as those terms are used in Regulation D under the Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the Act; (c)
it has not and will not, directly or indirectly, engage in any "directed
selling
<PAGE> 16
-16-
efforts" (as defined in Regulation S under the Act); and (d) it has and will
solicit offers for the Securities only from, and will offer, sell and deliver
the Securities only to, (A) in the case of offers inside the United States, (i)
persons whom such Initial Purchasers reasonably believe to be QIBs or, if any
such person is buying for one or more institutional accounts for which such
person is acting as fiduciary or agent, only when such person has represented
to such Initial Purchasers that each such account is a QIB to whom notice has
been given that such sale or delivery is being made in reliance on Rule 144A or
(ii) a limited number of other institutional investors each of which is
reasonably believed by the Initial Purchaser to be an "accredited investor" (as
defined in Rule 501(a)(1)(2), (3) or (7) of the Act) that, prior to their
purchase of the Securities, deliver to the Initial Purchaser a letter
containing the representations and agreements set forth in Annex I to the Final
Memorandum and (B) in the case of offers outside the United States, to persons
other than U.S. Persons in compliance with Regulation S under the Act ("foreign
purchasers," which terms shall include dealers or other professional
fiduciaries in the United States acting on a discretionary basis for foreign
beneficial owners (other than an estate or trust)); provided, however, that, in
the case of this clause (B), in purchasing such Securities such persons are
deemed to have represented and agreed as provided under the caption "Notice to
Investors" contained in the Final Memorandum.
6. Certain Covenants. The Issuers, jointly and severally, covenant
and agree with the Initial Purchasers that:
(a) None of the Issuers will amend or supplement the Final
Memorandum or any amendment or supplement thereto of which the Initial
Purchasers shall not previously have been advised and furnished a copy
for a reasonable period of time prior to the proposed amendment or
supplement and as to which the Initial Purchasers or counsel for the
Initial Purchasers shall reasonably object. The Issuers will promptly,
upon the reasonable request of the Initial Purchasers or counsel to the
Initial Purchasers, make any amendments or supplements to the Preliminary
Memorandum or the Final Memorandum that may be reasonably necessary or
advisable in connection with the resale of the Securities by the Initial
Purchasers.
(b) The Issuers will cooperate with the Initial Purchasers in
arranging for the qualification of the Securities for offering and sale
under the securities or "Blue Sky" laws of such jurisdictions as the
Initial Purchasers
<PAGE> 17
-17-
may designate and will continue such qualifications in effect for as long
as may be necessary to complete the distribution of the Securities by the
Initial Purchasers; provided, however, that in connection therewith none
of the Issuers shall be required to qualify as a foreign corporation or
to execute a general consent to service of process in any jurisdiction or
to take any other action that would subject it to general service of
process or to taxation in respect of doing business in any jurisdiction
in which it is not otherwise subject.
(c) If, at any time prior to the completion of the distribution by
the Initial Purchasers of the Securities or, if issued, the Private
Exchange Notes, any event occurs or information becomes known as a result
of which the Final Memorandum as then amended or supplemented would
include any untrue statement of a material fact, or omit to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, or if for
any other reason it is necessary at any time to amend or supplement the
Final Memorandum to comply with applicable law, the Issuers will promptly
notify the Initial Purchasers thereof (who thereafter will not use such
Final Memorandum until appropriately amended or supplemented) and will
prepare, at the expense of the Issuers, an amendment or supplement to the
Final Memorandum that corrects such statement or omission or effects such
compliance.
(d) The Company will, without charge, provide to each Initial
Purchaser and to counsel to the Initial Purchasers as many copies of the
Preliminary Memorandum and the Final Memorandum or any amendment or
supplement thereto as the Initial Purchasers may reasonably request.
(e) During the period of five years from the Closing Date, the
Company will furnish to the Initial Purchasers (a) as soon as available,
a copy of each report and other communication (financial or otherwise) of
the Company mailed to the Trustee or the holders of the Securities,
stockholders or filed with the Commission or any national securities
exchange on which any class of securities of the Company may be listed
and (b) from time to time such other information concerning the Company
as you may reasonably request.
(f) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions
<PAGE> 18
-18-
hereof (other than solely by reason of a default by the Initial
Purchasers of their obligations hereunder after all conditions hereunder
have been satisfied in accordance herewith) or if this Agreement shall be
terminated by the Initial Purchasers because of any failure or refusal on
the part of the Issuers to comply with the terms or fulfill any of the
conditions of this Agreement, the Company agrees to reimburse you for all
reasonable out-of-pocket expenses (including fees and expenses of counsel
for the Initial Purchasers) incurred by you in connection herewith.
(g) The Company will apply the net proceeds from the sale of the
Securities as set forth under "Use of Proceeds" in the Final Memorandum.
(h) Prior to the Closing Date, the Company will furnish to the
Initial Purchasers, as soon as they have been prepared by or are
available to the Company, a copy of any unaudited interim consolidated
financial statements of the Company for any period subsequent to the
period covered by the most recent financial statements appearing in the
Final Memorandum.
(i) None of the Issuers or any of their respective Affiliates will
sell, offer for sale or solicit offers to buy or otherwise negotiate in
respect of any "security" (as defined in the Act) which could be
integrated with the sale of the Securities in a manner which would
require the registration under the Act of the Securities.
(j) The Issuers will not, and will not permit any of the
Subsidiaries to, solicit any offer to buy or offer to sell the Securities
by means of any form of general solicitation or general advertising (as
those terms are used in Regulation D under the Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the Act.
(k) For so long as any of the Securities remain outstanding and
are "restricted securities" within the meaning of Rule 144(a)(3)
under the Act and not able to be sold in their entirety under Rule
144 under the Act (or any successor provision), the Company will make
available, upon request, to any seller of such Securities the information
specified in Rule 144A(d)(4) under the Act, unless the Company is then
subject to Section 13 or 15(d) of the Exchange Act.
<PAGE> 19
-19-
(l) The Issuers will use their best efforts to (i) permit the
Securities to be included for quotation on the Private Offering, Resales,
and Trading through Automated Linkages Market ("PORTAL") and (ii)
permit the Securities to be eligible for clearance and settlement through
The Depository Trust Company ("DTC").
(m) In connection with Securities offered and sold in an offshore
transaction (as defined in Regulation S), the Company will not register
any transfer of such Securities not made in accordance with the
provisions of Regulation S and will not, except in accordance with the
provisions of Regulation S, if applicable, issue any such Securities in
the form of definitive securities.
7. Expenses. Notwithstanding any termination of this Agreement
(pursuant to Section 11 or otherwise), the Company agrees to pay the following
costs and expenses and all other costs and expenses incident to the performance
by the Issuers of their obligations hereunder: (i) the preparation, printing
or reproduction of each Preliminary Memorandum, the Final Memorandum (including
financial statements) and each amendment or supplement to it; (ii) the printing
(or reproduction) and delivery (including postage, air freight charges and
charges for counting and packaging) of such copies of the Memorandum and
all amendments or supplements to it as may be reasonably requested for use in
connection with the offering and sale of the Securities; (iii) the preparation,
printing, authentication, issuance and delivery of certificates for the
Securities, including any stamp taxes in connection with the original issuance
and sale of the Securities and trustees' fees; (iv) the reproduction and
delivery of this Agreement, the preliminary and supplemental "Blue Sky"
memoranda, including filing fees and reasonable fees and disbursements of
Cahill Gordon & Reindel, counsel to the Initial Purchasers, relating thereto,
and all other agreements or documents reproduced and delivered in connection
with the offering of the Securities; (v) the registration or qualification of
the Securities for offer and sale under the securities or Blue Sky laws of the
several states (including the reasonable fees, expenses and disbursements of
counsel to the Initial Purchasers relating to such registration and
qualification); (vi) the transportation and other expenses incurred by or on
behalf of Company representatives in connection with presentations to
prospective purchasers of the Securities; (vii) the fees and expenses of the
Company's accountants and the fees and expenses of counsel (including local and
special counsel) for the Issuers; (viii) fees and expenses of the Trustee
including fees and expenses of its
<PAGE> 20
-20-
counsel; and (ix) any fees charged by investment rating agencies for the rating
of the Securities.
8. Conditions of the Initial Purchasers' Obligations. The several
obligations of the Initial Purchasers to purchase and pay for the Securities
are subject to the accuracy of the representations and warranties contained
herein, to the performance by the Issuers of their respective covenants and
agreements hereunder and to the following additional conditions unless waived
in writing by the Initial Purchasers:
(i) None of the issuance and sale of the Securities pursuant to this
Agreement, the Transactions or any other transactions contemplated by any
of the Transaction Documents or the Final Memorandum shall be
enjoined (temporarily or permanently) and no restraining order or other
injunctive order shall have been issued; and there shall not have been
any legal action, order, decree or other administrative proceeding
instituted or threatened against any of the Issuers or against you
relating to the issuance of the Securities or the Initial Purchasers'
activities in connection therewith, the Transactions or any other
transaction contemplated by any of the Transaction Documents or the Final
Memorandum.
(ii) Subsequent to the effective date of this Agreement, there shall
not have occurred (i) any change, or any development involving a
prospective change, in or affecting the condition (financial or other),
business, properties, prospects, net worth or results of operations of
the Issuers, the Subsidiaries, Lemmerz and the Lemmerz Subsidiaries,
taken as a whole, not contemplated by the Final Memorandum that, in your
opinion, would materially adversely affect the market for the Securities,
or (ii) any event or development relating to or involving any of the
Issuers or Lemmerz or any of the respective officers or directors of the
Issuers or Lemmerz that makes any statement made in the Final Memorandum
untrue or that, in the opinion of the Issuers and their counsel or the
Initial Purchasers and their counsel, requires the making of any addition
to or change in the Final Memorandum in order to state a material fact
necessary in order to make the statements made therein not misleading or
to comply with law.
(iii) The Initial Purchasers shall have received an opinion of
counsel to the Issuers in form and substance satisfactory to the Initial
Purchasers and counsel to the
<PAGE> 21
-21-
Initial Purchasers, dated the Closing Date, of each of (i) Skadden,
Arps, Slate, Meagher & Flom LLP, substantially in the form of Exhibit D-1
hereto, and (ii) Daniel M. Sandberg, Esquire, General Counsel to the
Company substantially in the form of Exhibit D-2.
(iv) The Initial Purchasers shall have received an opinion, dated the
Closing Date, of Cahill Gordon & Reindel, counsel to the Initial
Purchasers, with respect to the sufficiency of certain legal matters
relating to this Agreement and such other related matters as the Initial
Purchasers may require. In rendering such opinion, Cahill Gordon &
Reindel shall have received and may rely upon such certificates and other
documents and information as they may reasonably request to pass upon
such matters. In addition, in rendering their opinion, Cahill Gordon &
Reindel may state that its opinion is limited to matters of New York,
Delaware corporate and federal law.
(v) The Initial Purchasers shall have received, from KPMG Peat
Marwick LLP, independent public accountants for the Issuers, and KPMG
Deutsche Treuhand-Gesellschaft Aktiengesellschaft
Wirtschaftsprufungsgesellschaft, independent public accountants for
Lemmerz, "comfort" letters dated the date hereof and the Closing Date, in
form and substance reasonably satisfactory to the Initial Purchasers and
Cahill Gordon & Reindel, counsel to the Initial Purchasers.
(vi) The representations and warranties of the Issuers contained in
this Agreement which are qualified as to materiality shall be true and
correct, and those representations and warranties of the Issuers which
are not so qualified shall be true and correct in all material respects,
on and as of the Closing Date; the Issuers shall have complied in all
material respects with all agreements and satisfied all conditions on
their part to be performed or satisfied hereunder at or prior to the
Closing Date.
(vii) There shall not have been any change in the capital stock of
the Issuers nor any material increase in the consolidated short-term or
long-term debt of the Issuers, in each case, from that set forth or
contemplated in the Final Memorandum (or any amendment or supplement
thereto) or contemplated by the Transaction Documents and (b) the Issuers
shall not have any liabilities or obligations, contingent or otherwise
(whether or not in the ordinary course of business), that are material to
the Issu-
<PAGE> 22
-22-
ers, taken as a whole, other than those reflected in the Final
Memorandum (or any amendment or supplement thereto) or contemplated by
the Transaction Documents.
(viii) You shall have received certificates, dated the Closing Date
and signed by the chief executive officer and the chief financial
officer of the Company and each Subsidiary Guarantor (or such other
officers as are acceptable to you), to the effect that each of the
conditions to closing set forth in this Section 8 have been satisfied.
(ix) There shall have been no material amendments, alterations,
modifications or waivers of any provisions of the Acquisition Agreement
since the date of this Agreement and the Acquisition Agreement shall
be in full force and effect; and the Acquisition shall occur immediately
following the closing of the sale of the Securities by the Company
hereunder.
(x) The Initial Purchasers shall have received from the Company a
true and correct copy of the Credit Agreement, dated on or about the
Closing Date, and there shall have been no material amendments,
alterations, modifications or waivers of any provisions of the Credit
Agreement since the date of this Agreement; the Credit Agreement shall be
in full force and effect; simultaneously with the closing of the sale of
the Securities by the Company hereunder, the Company shall have available
not less than an aggregate of $250,000,000 in revolving credit
borrowings, pursuant to the Credit Agreement.
(xi) The Issuers shall have furnished or caused to be furnished to
you such further certificates and documents as you shall have reasonably
requested.
Any certificate or document signed by any officer of an Issuer and
delivered to you or to counsel for the Initial Purchasers shall be deemed a
representation and warranty by such Issuer to each Initial Purchaser as to the
statements made therein.
All such opinions, certificates, letters, schedules, documents or
instruments delivered pursuant to this Agreement will comply with the
provisions hereof only if they are reasonably satisfactory in all material
respects to the Initial Purchasers and counsel to the Initial Purchasers. The
Issuers shall furnish to the Initial Purchasers such conformed copies of such
opinions, certificates, letters, schedules, documents
<PAGE> 23
-23-
and instruments in such quantities as the Initial Purchasers shall reasonably
request.
9. Indemnification and Contribution. (a) Each Issuer jointly and
severally agrees to indemnify and hold harmless each Initial Purchaser, and
each person, if any, who controls any of the Initial Purchasers within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, against any
losses, claims, damages or liabilities, joint or several, to which such Initial
Purchaser or such controlling person may become subject under the Act, the
Exchange Act or otherwise, insofar as any such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of any material
fact contained in (A) the Memorandum or (B) any application or other
document, or any amendment or supplement thereto, executed by any Issuer
or based upon written information furnished by or on behalf of any Issuer
filed in any jurisdiction in order to qualify the Securities under the
securities or "Blue Sky" laws thereof or filed with the Commission or any
securities association or securities exchange (each an "Application"); or
(ii) the omission or alleged omission to state, in the Memorandum or
any amendment thereto, or any Application, a material fact required to be
stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading,
and will reimburse, as incurred, each Initial Purchaser and each such
controlling person for any reasonable and documented out-of-pocket legal or
other expenses reasonably incurred by the Initial Purchasers or such
controlling person in connection with investigating, defending against or
appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action;
provided, however, that none of the Issuers will be liable in any such case to
an Initial Purchaser or any controlling person of such Initial Purchaser to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any untrue statement or alleged untrue statement or omission or alleged
omission made in the Memorandum or any amendment thereto or any Application in
reliance upon and in conformity with written information furnished to the
Issuers by or on behalf of such Initial Purchaser specifically for use therein.
This indemnity agreement will be in addition to any liability that the
<PAGE> 24
-24-
Issuers may otherwise have to the indemnified parties. None of the Issuers
will, without the prior written consent of the Initial Purchasers, which shall
not be unreasonably withheld or delayed, settle or compromise or consent to the
entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification by the Initial Purchasers may be
sought hereunder (whether or not the Initial Purchasers or any person who
controls either of the Initial Purchasers within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act is a party to such claim, action,
suit or proceeding), unless such settlement, compromise or consent includes an
unconditional release (or any other release reasonably acceptable to the
Initial Purchasers) of the Initial Purchasers and each such controlling person
from all liability arising out of such claim, action, suit or proceeding.
(b) Each Initial Purchaser will severally and not jointly indemnify
and hold harmless the Issuers, their respective directors, officers and each
person, if any, who controls any of the Issuers within the meaning of Section
15 of the Act or Section 20 of the Exchange Act against any losses, claims,
damages or liabilities to which any of the Issuers or any such director,
officer or controlling person may become subject under the Act, the Exchange
Act, or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in the
Memorandum or any amendment thereto or any Application or (ii) the omission or
the alleged omission to state therein a material fact required to be stated in
the Memorandum or any amendment thereto, 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 reliance upon and in conformity with written information
furnished to any of the Issuers by or on behalf of such Initial Purchaser
specifically for use therein; and, subject to the limitation set forth
immediately preceding this clause, will reimburse, as incurred, any reasonable
and documented out-of-pocket legal or other expenses reasonably incurred by any
of the Issuers or any such director, officer or controlling person in
connection with investigating or defending against or appearing as a
third-party witness in connection with any such loss, claim, damage, liability
or action in respect thereof. This indemnity agreement will be in addition to
any liability that the Initial Purchasers may otherwise have to the indemnified
parties. The Initial Purchasers will not, without the prior written consent of
the Issuers, which shall not be unreasonably withheld or delayed, settle or
<PAGE> 25
-25-
compromise or consent to the entry of any judgment in any pending or threatened
claim, action, suit or proceeding in respect of which indemnification by any of
the Issuers may be sought hereunder (whether or not any of the Issuers or any
person who controls the Issuers within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act is a party to such claim, action, suit or
proceeding), unless such settlement, compromise or consent includes an
unconditional release of any such Issuer and each such controlling person from
all liability arising out of such claim, action, suit or proceeding.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 9, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability that it may have to any indemnified party except to the
extent that such omission results in the forfeiture by the indemnifying party
of substantial rights and defenses. In case any such action is brought against
any indemnified party, and such indemnified party notifies the indemnifying
party of the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party; provided, however,
that if the defendants in any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have reasonably
concluded, based on the advice of counsel, that there may be one or more legal
defenses available to it and/or other indemnified parties that are different
from or additional to those available to any such indemnifying party then the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of such indemnified party or parties and such indemnified
party or parties shall have the right to select separate counsel to defend such
action on behalf of such indemnified party or parties. After notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof and approval by such indemnified party of counsel appointed to
defend such action, the indemnifying party will not be liable to such
indemnified party under this Section 9 for any legal or other expenses, other
than reasonable and documented out-of-pocket costs of investigation,
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 immediately pre-
<PAGE> 26
-26-
ceding sentence (it being understood, however, that in connection with such
action the indemnifying party shall not be liable for the expenses of more than
one separate counsel (in addition to local counsel) in any one action or
separate but substantially similar actions in the same jurisdiction arising out
of the same general allegations or circumstances, designated by the Initial
Purchasers in the case of paragraph (a) of this Section 9 or the Issuers in the
case of paragraph (b) of this Section 9, representing the indemnified parties
under such paragraph (a) or paragraph (b), as the case may be, who are parties
to such action or actions); (ii) the indemnifying party has authorized in
writing the employment of counsel for the indemnified party at the expense of
the indemnifying parties; or (iii) the indemnifying party shall have failed to
assume the defense or retain counsel reasonably satisfactory to the indemnified
party.
(d) In circumstances in which the indemnity agreement provided for
in the preceding paragraphs of this Section 9 is unavailable or insufficient to
hold harmless an indemnified party in respect of any losses, claims, damages
or liabilities (or actions in respect thereof), other than as a result of the
proviso to Section 9(a), each indemnifying party, in order to provide for just
and equitable contribution, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect (i) the relative benefits received by the indemnifying
party or parties on the one hand and the indemnified party on the other from
the offering of the Securities or (ii) if the allocation provided by the
foregoing clause (i) is not permitted by applicable law, not only such relative
benefits but also the relative fault of the indemnifying party or parties on
the one hand and the indemnified party on the other in connection with the
statements or omissions or alleged statements or omissions that resulted in
such losses, claims, damages or liabilities (or actions in respect thereof).
The relative benefits received by the Issuers on the one
<PAGE> 27
-27-
hand and the Initial Purchasers on the other shall be deemed to be in the same
proportion as the total proceeds from the offering of the Securities (before
deducting expenses other than Initial Purchasers' discounts and commissions)
received by the Issuers bear to the total initial purchasers' discounts and
commissions received by the Initial Purchasers. The relative fault of the
parties 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 Issuers on the one hand or the Initial Purchasers on the other, the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission, and any other equitable
considerations appropriate in the circumstances. The Issuers and the Initial
Purchasers agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation (even if the
Issuers on the one hand and the Initial Purchasers on the other hand were
treated as one entity for such purpose) or by any other method of allocation
that does not take into account the equitable considerations referred to in the
first sentence of this paragraph (d). Notwithstanding any other provision of
this paragraph (d), the Initial Purchasers shall not be obligated to make
contributions hereunder that in the aggregate exceed the total initial
purchasers' discounts and commissions received by the Initial Purchasers under
this Agreement, less the aggregate amount of any damages that the Initial
Purchasers have otherwise been required to pay by reason of the untrue or
alleged untrue statements or the omissions or alleged omissions to state a
material fact, and no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes
of this paragraph (d), each person, if any, who controls any of the Initial
Purchasers within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act shall have the same rights to contribution as the Initial
Purchasers, and each director of any of the Issuers, each officer and each
person, if any, who controls any of the Issuers within the meaning of Section
15 of the Act or Section 20 of the Exchange Act shall have the same rights to
contribution as the Issuers.
(e) Notwithstanding anything to the contrary in this Article 9, the
indemnification and contribution provisions of the Registration Rights
Agreement shall govern any claim with respect thereto.
10. Survival Clause. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Issuers, their
respective officers and the Initial Purchasers set forth in this Agreement or
made by or on behalf of them, respectively, pursuant to this Agreement shall
remain in full force and effect, regardless of (i) any investigation made by or
on behalf of the Issuers, any of their respective officers or directors, the
Initial Purchasers or any controlling person referred to in Section 9 hereof
and (ii) delivery of and payment for the Securities, and shall be binding upon
and shall inure to the benefit of, any successors,
<PAGE> 28
-28-
assigns, heirs, personal representatives of the Issuers, the Initial Purchasers
and indemnified parties referred to in Section 9 hereof. The respective
agreements, covenants, indemnities and other statements set forth in Sections 7
and 9 hereof shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement.
11. Termination. (A) This Agreement may be terminated in the sole
discretion of the Initial Purchasers by notice to the Issuers given in the
event that the Issuers shall have failed, refused or been unable to satisfy all
conditions on its respective part to be performed or satisfied hereunder on or
prior to the Closing Date or, if at or prior to the Closing Date:
(i) any of the Issuers or the Subsidiaries or Lemmerz or the Lemmerz
Subsidiaries shall have sustained any loss or interference with respect
to their respective businesses or properties from fire, flood, hurricane,
earthquake, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental
proceeding, which loss or interference has had or has a material adverse
effect on the business, condition (financial or other), properties,
prospects or results of operations of the Issuers, the Subsidiaries,
Lemmerz and the Lemmerz Subsidiaries, taken as a whole, or there shall
have been any material adverse change, or any development involving a
prospective material adverse change (including without limitation a
change in management or control of the Issuers), in the business,
condition (financial or other), properties, prospects or results of
operations of the Issuers, the Subsidiaries, Lemmerz and the Lemmerz
Subsidiaries, taken as a whole, except as described in or contemplated by
the Final Memorandum (exclusive of any amendment or supplement thereto);
(ii) trading in securities generally on the New York or American
Stock Exchange shall have been suspended or minimum or maximum prices
shall have been established on any such exchange;
(iii) a banking moratorium shall have been declared by New York or
United States authorities; or
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States
<PAGE> 29
-29-
or (C) any material change in the financial markets of the United States
that, in the sole judgment of the Initial Purchasers, makes it
impracticable or inadvisable to proceed with the offering or the delivery
of the Securities as contemplated by the Final Memorandum, as amended as
of the date hereof.
(b) Termination of this Agreement pursuant to this Section 11 shall
be without liability of any party to any other party except as provided in
Section 10 hereof.
12. Notices. All communications hereunder shall be in writing and,
if sent to the Initial Purchasers, shall be mailed or delivered or telecopied
and confirmed in writing to the Initial Purchasers c/o CIBC Wood Gundy
Securities Corp., 425 Lexington Avenue, 3rd Floor, New York, New York
10017, Attention: Walter F. McLallen, and with a copy to Cahill Gordon &
Reindel, 80 Pine Street, New York, New York 10005, Attention: Roger Meltzer,
Esq. If sent to the Company or any of the Subsidiary Guarantors, shall be
mailed, delivered or telegraphed and confirmed in writing, to Hayes Wheels
International, Inc., 38481 Huron River Drive, Romulus, Michigan 48174,
Attention: General Counsel and with a copy to Skadden, Arps, Slate, Meagher &
Flom LLP, One Rodney Square, Wilmington, Delaware 19801, Attention: Robert B.
Pincus, Esq.
13. Successors. This Agreement shall inure to the benefit of and be
binding upon the Initial Purchasers and each of the Issuers and their
respective successors and legal representatives, and nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy or claim under or in respect of
this Agreement, or any provisions herein contained; this Agreement and all
conditions and provisions hereof being intended to be and being for the sole
and exclusive benefit of such persons and for the benefit of no other person
except that (i) the indemnities of the Issuers contained in Section 9 of this
Agreement shall also be for the benefit of any person or persons who control
the Initial Purchasers within the meaning of Section 15 of the Act or Section
20 of the Exchange Act and (ii) the indemnities of the Initial Purchasers
contained in Section 9 of this Agreement shall also be for the benefit of the
directors of the Issuers, their respective officers and any person or persons
who controls any Issuer within the meaning of Section 15 of the Act or Section
20 of the Exchange Act. No purchaser of Securities from the Initial Purchasers
will be deemed a successor because of such purchase.
<PAGE> 30
-30-
14. Joint and Several Obligations. All of the obligations of the
Issuers hereunder shall be joint and several obligations of each of them.
15. Information Supplied by the Initial Purchasers. The statements
set forth in the first legend on the inside front cover of the Memorandum and in
the penultimate and last sentence of the third paragraph and the seventh
paragraph under the heading "Plan of Distribution" constitute the only
information furnished by the Initial Purchasers to the Issuers for purposes of
Section 2(a) hereof.
16. Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto and supersedes all prior agreements,
understandings and arrangements, oral or written, among the parties hereto with
respect to the subject matter hereof.
17. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAW.
18. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
<PAGE> 31
-31-
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement among the
Issuers and the Initial Purchasers.
Very truly yours,
HAYES WHEELS INTERNATIONAL, INC.,
a Delaware corporation
By:
----------------------------------------------
Name:
Title:
HAYES WHEELS INTERNATIONAL-CALIFORNIA,
INC., a Delaware corporation
By:
----------------------------------------------
Name:
Title:
HAYES WHEELS INTERNATIONAL-GEORGIA,
INC., a Delaware corporation
By:
----------------------------------------------
Name:
Title:
HAYES WHEELS INTERNATIONAL-INDIANA,
INC., a Delaware corporation
By:
----------------------------------------------
Name:
Title:
<PAGE> 32
-32-
HAYES WHEELS INTERNATIONAL-MEXICO,
INC., a Delaware corporation
By:
----------------------------------------------
Name:
Title:
HAYES WHEELS INTERNATIONAL-MICHIGAN,
INC., a Michigan corporation
By:
----------------------------------------------
Name:
Title:
MOTOR WHEEL CORPORATION,
an Ohio corporation
By:
----------------------------------------------
Name:
Title:
MWC ACQUISITION SUB, INC.,
a Delaware corporation
By:
----------------------------------------------
Name:
Title:
<PAGE> 33
-33-
The foregoing Agreement is hereby confirmed
and accepted as of the date first above
written.
CIBC WOOD GUNDY SECURITIES CORP.
By:
--------------------------
Name:
Title:
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
By:
--------------------------
Name:
Title:
BEAR, STEARNS & CO. INC.
By:
--------------------------
Name:
Title:
MORGAN STANLEY & CO. INCORPORATED
By:
--------------------------
Name:
Title:
SALOMON BROTHERS INC
By:
--------------------------
Name:
Title:
<PAGE> 34
Exhibit A
Subsidiary Guarantors
Hayes Wheels International-California, Inc.
Hayes Wheels International-Georgia, Inc.
Hayes Wheels International-Indiana, Inc.
Hayes Wheels International-Mexico, Inc.
Hayes Wheels International-Michigan, Inc.
Motor Wheel Corporation
MWC Acquisition Sub, Inc.
<PAGE> 35
Exhibit B-1
Company Subsidiaries
Hayes (Europe), Ltd.
Hayes Wheels, S.p.A.
Hayes Wheels Autokola NH, as
Reliable Transportation Components Inc.
Hayes Wheels International - Missouri, Inc.
Hayes Wheels International - Kentuckulus, Inc.
Hayes Wheels Aftermarket, Inc.
Hayes Wheels Japan Limited
Hayes Wheels de Espana, S.A.
HWI Service Corporation
Hayes Wheels Foreign Sales Corp.
Motor Wheel de Mexico, S.A. de C.V.
Motor Wheel Corporation of Canada, Ltd.
AMW Holdings, Inc.
HL Holdings BV
HL Holdings de Espana
HL Holding GmbH
Hayes Wheels Hungary Consulting Limited Liability Company
Newco No. 17 Vermogensverwaltungs GmbH (post-Acquisition)
Newco No. 18 Vermogensverwaltungs GmbH (post-Acquisition)
Company Joint Venture and Other Interests
Numbers in parentheses represent percent of total owned by the Company or one
of its subsidiaries.
Hayes Wheels de Venezuela, C.A. (49)
Hayes Wheels de Mexico, S.A. de C.V. (40)
Aluminum Wheel Technology, Inc. (50)
Riviera Tool Company (30)
Metalurgica FPS do Brasil, Ltda. (49)
<PAGE> 36
-2-
Exhibit B-2
Lemmerz Subsidiaries
Metaalgieterij Geisen B.V.
Lemmerz Espanola S.A.
Lemmerz-Werke GmbH
Lemmerz-Werke Wohnungsbaugesellschaft mbH
Lemmerz Service System N.V.
Lemmerz Belgie N.V.
Lemmerz Comerico e Participacoes SRL
Lemmerz Canada Inc.
PSW Prazisions-und Spezialwerkzeuge AG
Lemmerz-Inci-Jany Sanayi A.S.
Lemmerz Joint Ventures and Other Interests
Numbers in parentheses represent percent of total owned by Lemmerz or one of
its subsidiaries.
Continental Lemmerz (Portugal), Componentes para
Automoveis, Lda. (49)
Borlem S.A. Empreendimentos Industriais (45)
Reynolds-Lemmerz Industries (25)
Kalyani-Lemmerz Ltd. (25)
Jantas Jant Sanayi ve Ticaret S.A. (25)
Siam Lemmerz Co., Ltd. (25)
Additional Information
See Section 4.3(c), paragraph (ii), of the Lemmerz Disclosure Schedule
delivered pursuant to the Acquisition Agreement regarding certain qualifying
shares held by third parties in certain Lemmerz Subsidiaries.
<PAGE> 37
Exhibit C
<TABLE>
<CAPTION>
Principal Amount
Initial Purchaser of Securities
- ----------------- ----------------
<S> <C>
CIBC Wood Gundy Securities Corp. $125,000,000
Merrill Lynch, Pierce, Fenner
& Smith Incorporated 50,000,000
Bear, Stearns & Co. Inc. 25,000,000
Morgan Stanley & Co. Incorporated 25,000,000
Salomon Brothers Inc 25,000,000
------------
Total $250,000,000
============
</TABLE>
<PAGE> 38
Exhibit D-1
Form of Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
Opinion, dated the Closing Date and addressed to the Initial
Purchasers, of Skadden, Arps, Slate, Meagher & Flom LLP, counsel to the Issuers,
to the effect that:
(i) The Securities have been duly and validly authorized by each of
the Issuers other than Hayes Wheels International-Michigan, Inc. (the
"Delaware Issuers") and when executed by the Delaware Issuers and
authenticated by the Trustee in accordance with the provisions of the
Indenture, and delivered to and paid for by the Initial Purchasers in
accordance with the terms of the Purchase Agreement, will have been duly
executed, issued and delivered and will constitute valid and legally
binding obligations of the Delaware Issuers, entitled to the benefits of
the Indenture and enforceable against the Delaware Issuers in accordance
with their terms, except that the enforcement thereof may be subject to
(a) bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally, and (b) general principles of equity
(regardless of whether enforceability is considered in a proceeding at
law or in equity).
(ii) The Exchange Notes, the Private Exchange Notes and the
guarantees thereof have been duly and validly authorized by the
Delaware Issuers and when executed by the Delaware Issuers and
authenticated by the Trustee in accordance with the provisions of the
Registration Rights Agreement and the Indenture, and delivered to the
Initial Purchasers in accordance with the terms of the Registration
Rights Agreement, will have been duly executed, issued and delivered and
will constitute valid and legally binding obligations of the Delaware
Issuers, entitled to the benefits of the Indenture and enforceable
against the Delaware Issuers in accordance with their terms, except that
the enforcement thereof may be subject to (a) bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally, and
(b) general principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity).
<PAGE> 39
-2-
(iii) Each of the Delaware Issuers has the requisite corporate power
and corporate authority to execute, deliver and perform its obligations
under the Indenture, the Securities, the Exchange Notes and the Private
Exchange Notes; the Indenture has been duly and validly authorized by the
Delaware Issuers and, when executed and delivered by the Delaware Issuers
(assuming the due authorization, execution and delivery by the Trustee),
will constitute a valid and legally binding agreement of the Delaware
Issuers, enforceable against the Delaware Issuers in accordance with its
terms, except that the enforcement thereof may be subject to (a)
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
or other similar laws now or hereafter in effect relating to creditors'
rights generally and (b) general principles of equity (regardless of
whether enforceability is considered in a proceeding at law or in
equity).
(iv) Each of the Delaware Issuers has the requisite corporate power
and authority to execute, deliver and perform its obligations under the
Registration Rights Agreement. The Registration Rights Agreement has
been duly and validly authorized by the Delaware Issuers and, when
executed and delivered by the Delaware Issuers, will constitute a valid
and legally binding agreement of the Delaware Issuers, enforceable
against the Delaware Issuers in accordance with its terms except (i) that
the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to or affecting creditors' rights generally or general
principles of equity (regardless of whether such enforcement is
considered in a proceeding at law or in equity) and (ii) as any rights to
indemnity or contribution hereunder may be limited by federal and state
securities laws and public policy considerations.
(v) Each of the Delaware Issuers has the requisite corporate power
and authority to execute, deliver and perform its obligations under the
Purchase Agreement. The Purchase Agreement has been duly and validly
authorized by the Delaware Issuers and, when executed and delivered by
the Delaware Issuers, will constitute a valid and legally binding
agreement of the Delaware Issuers, enforceable against the Delaware
Issuers in accordance with its terms except (i) that the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
or affecting creditors' rights generally or general prin-
<PAGE> 40
-3-
ciples of equity (regardless of whether such enforcement is considered in
a proceeding at law or in equity) and (ii) as any rights to indemnity or
contribution hereunder may be limited by federal and state securities
laws and public policy considerations.
(vi) No Governmental Approval is required for the performance by the
Delaware Issuers of their respective obligations under the Offering
Documents or the consummation of the transactions contemplated thereby
relating to the Securities.
As used in such counsel's opinion, (a) the term "Applicable Laws"
means only the General Corporation Law of the State of Delaware and
those laws, rules and regulations of the State of New York and the United
States of America which, in our experience, are normally applicable to
transactions of the type contemplated by the Purchase Agreement (other
than federal and state securities laws, the TIA and the rules and
regulations of the National Association of Securities Dealers, Inc.)
without having made any special investigation as to the applicability of
any specific law, rule or regulation except as specified herein; (b) the
term "Governmental Authorities" means any Delaware, New York or federal
executive, legislative, judicial, administrative or regulatory body; and
(c) the term "Governmental Approval" means any consent, approval,
license, authorization or validation of, or filing, qualification or
registration with, any Governmental Authority pursuant to Applicable
Laws.
(vii) The execution, delivery and performance by the Delaware
Issuers of each of the Offering Documents and the Credit Agreement and
the consummation by the Delaware Issuers of the transactions contemplated
thereby and the fulfillment of the terms thereof, will not violate or
conflict with the certificate of incorporation or bylaws of any of the
Delaware Issuers.
(viii) Each of the Transactions has been duly authorized by each of
the Delaware Issuers, which is a party thereto.
(ix) The statements set forth under the captions "Description of the
Notes" and "Description of Other Indebtedness" in the Final Memorandum,
insofar as such statements purport to summarize legal documents or
statements of law or legal conclusions are accurate summaries in all
<PAGE> 41
-4-
material respects and the Indenture and the Securities conform in all
material respects to the descriptions thereof thereunder.
(x) None of the Issuers or the Subsidiaries is required to register
as an "investment company" or a company "controlled by" an "investment
company" as such terms are defined in the Investment Company Act of 1940,
as amended.
(xi) Neither the consummation of the transactions contemplated by
the Purchase Agreement nor the sale, issuance, execution or delivery of
the Securities will violate Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System.
(xii) The Indenture appears on its face to be appropriately
responsive in all material respects to the requirements of the TIA.
(xiii) Assuming (i) the accuracy of the representations and
warranties of the Company set forth in Section 2 of the Purchase
Agreement and of you in Section 5 of the Purchase Agreement, (ii) the due
performance by the Company of the covenants and agreements set forth in
Section 6 of the Purchase Agreement and the due performance by you of the
covenants and agreements set forth in Sections 5 and 6 of the Purchase
Agreement, (iii) your compliance with the offering and transfer
procedures and restrictions described in the Offering Memorandum, (iv)
the accuracy of the representations and warranties made in accordance
with the Purchase Agreement and the Offering Memorandum by purchasers to
whom you initially resell Securities and (v) that purchasers to whom you
initially resell Securities receive a copy of the Offering Memorandum
prior to such sale, the offer, sale and delivery of the Securities to you
in the manner contemplated by the Purchase Agreement and the Offering
Memorandum and the initial resale of the Securities by you in the manner
contemplated in the Offering Memorandum and the Purchase Agreement, do
not require registration under the Act and the Indenture does not require
qualification under the TIA, it being understood that we express no
opinion as to any subsequent resale of any Security.
In addition, we have participated in conferences with officers and
other representatives of the Issuers, representatives of the independent public
accountants and representatives of the Initial Purchasers at which the contents
of the Memoran-
<PAGE> 42
-5-
dum were discussed and, although we are not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Final Memorandum (except as indicated in clause (ix) above)
and have not made any independent check or verification thereof, on the basis
of the foregoing (relying as to materiality to a large extent upon the
statements of officers and other representatives of each of the Issuers) no
facts have come to our attention that have caused us to believe that the Final
Memorandum as of its date and as of the Closing Date contained or contains an
untrue statement of a material fact or omitted or omits 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 (it being understood
that we express no opinion on or belief with respect to the financial
statements or other financial and statistical data or information included in
the Final Memorandum or on the information contained in the Final Memorandum
concerning Lemmerz and the Lemmerz Subsidiaries).
<PAGE> 43
Exhibit D-2
Form of Opinion of Daniel M. Sandberg, Esq.
Opinion, dated the Closing Date and addressed to the Initial
Purchasers, of Daniel M. Sandberg, Esq., General Counsel to the Company, to
the effect that:
(i) Each of the Issuers has been duly incorporated and is validly
existing in good standing, as a corporation under the laws of its
jurisdiction of incorporation, with the requisite corporate power and
authority to own its properties and conduct its business as described in
the Final Memorandum and is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions where the
ownership or leasing of its properties or the conduct of its business
requires such qualification, except when the failure to be so qualified
would not, individually or in the aggregate, have a Material Adverse
Effect; the outstanding shares of capital stock of the Issuers and the
Subsidiaries have been duly authorized and validly issued, are fully paid
and nonassessable and were not issued in violation of any preemptive or
similar rights and, in the case of the Subsidiary Guarantors and the
Subsidiaries, except in connection with the Credit Agreement, are owned
free and clear of all liens, encumbrances, equities and restrictions on
transferability (other than those imposed by the Act and the state
securities or "Blue Sky" laws); to the best of my knowledge, except as
set forth in the Final Memorandum, no options, warrants or other rights
to purchase from any Issuer or any Subsidiary or, agreements or other
obligations of any Issuer or any Subsidiary to issue or other rights to
cause the Company, to convert any obligation into, or exchange any
securities for, shares of capital stock or ownership interests in any
Issuer or any Subsidiary are outstanding.
(ii) The Guarantee has been duly and validly authorized by Hayes
Wheels International-Michigan, Inc. ("HWIM") and Motor Wheel Corporation
("MWC") and when the Securities are executed by the Company and
authenticated by the Trustee in accordance with the provisions of the
Indenture, and delivered to and paid for by the Initial Purchasers in
accordance with the terms of the Purchase Agreement, will have been duly
executed, issued and delivered and will constitute valid and legally
binding obliga-
<PAGE> 44
-2-
tion of HWIM and MWC, enforceable against HWIM and MWC in accordance with
its terms, except that the enforcement thereof may be subject to (a)
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
or other similar laws now or hereafter in effect relating to creditors'
rights generally, and (b) general principles of equity (regardless of
whether enforceability is considered in a proceeding at law or in equity).
(iii) The guarantee of the Exchange Notes and the Private Exchange
Notes have been duly and validly authorized by HWIM and MWC and when the
Exchange Notes and the Private Exchange Notes have been executed by the
Company and authenticated by the Trustee in accordance with the
provisions of the Registration Rights Agreement and the Indenture, and
delivered to the Initial Purchasers in accordance with the terms of the
Registration Rights Agreement, will have been duly executed, issued and
delivered and will constitute a valid and legally binding obligation of
HWIM and MWC, enforceable against HWIM and MWC in accordance with its
terms, except that the enforcement thereof may be subject to (a)
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
or other similar laws now or hereafter in effect relating to creditors'
rights generally, and (b) general principles of equity (regardless of
whether enforceability is considered in a proceeding at law or in
equity).
(iv) Each of HWIM and MWC has the requisite corporate power and
corporate authority to execute, deliver and perform its obligations under
the Indenture, the Securities, the Exchange Notes and the Private
Exchange Notes; the Indenture has been duly and validly authorized by
HWIM and MWC and, when executed and delivered by HWIM and MWC (assuming
the due authorization, execution and delivery by the Trustee), will
constitute a valid and legally binding agreement of HWIM and MWC,
enforceable against HWIM and MWC in accordance with its terms, except
that the enforcement thereof may be subject to (a) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally and (b) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity.
(v) Each of HWIM and MWC has the requisite corporate power and
authority to execute, deliver and perform its obligations under the
Registration Rights Agreement. The
<PAGE> 45
-3-
Registration Rights Agreement has been duly and validly authorized by
HWIM and MWC and, when executed and delivered by HWIM and MWC, will
constitute a valid and legally binding agreement of HWIM and MWC,
enforceable against HWIM and MWC in accordance with its terms except (i)
that the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to or affecting creditors' rights generally or general
principles of equity (regardless of whether such enforcement is
considered in a proceeding at law or in equity) and (ii) as any rights
to indemnity or contribution hereunder may be limited by federal and
state securities laws and public policy considerations.
(vi) Each of HWIM and MWC has the requisite corporate power and
authority to execute, deliver and perform its obligations under the
Purchase Agreement. The Purchase Agreement has been duly and validly
authorized by HWIM and MWC and, when executed and delivered by HWIM and
MWC, will constitute a valid and legally binding agreement of HWIM and
MWC, enforceable against HWIM and MWC in accordance with its terms except
(i) that the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting creditors' rights generally
or general principles of equity (regardless of whether such enforcement
is considered in a proceeding at law or in equity) and (ii) as any
rights to indemnity or contribution hereunder may be limited by federal
and state securities laws and public policy considerations.
(vii) No consent, approval, authorization or order of any
governmental agency or body, or to the best of my knowledge, any court,
is required for the performance of any of the Offering Documents or any
of the agreements contemplated thereby or delivered in connection
therewith, or the consummation of the transactions contemplated thereby,
except such as may be required and have been obtained as described in the
Final Memorandum or as may be required under the Act, the TIA or state
securities or "Blue Sky" laws in connection with the purchase and
distribution of the Securities or the exchange of the Exchange Notes and
the Private Exchange Notes.
(viii) None of the Issuers or the Subsidiaries is (a) in violation of
its certificate of incorporation or bylaws, (b) in violation of any
statute, judgment, decree,
<PAGE> 46
-4-
order, rule or regulation applicable to any of its properties or assets,
which violation would, individually or in the aggregate, have a Material
Adverse Effect or (c) in breach of or in default under any of the
Offering Documents or any material contract, indenture, mortgage, deed of
trust, loan agreement, note, lease, license, franchise agreement, permit,
certificate or other material agreement or instrument to which it is a
party or to which it is subject, which breach or default would
individually or in the aggregate, have a Material Adverse Effect.
(ix) The execution, delivery and performance by the Issuers, to the
extent each is a party thereto, of each of the Offering Documents and the
Credit Agreement and the consummation by the Issuers of the transactions
contemplated thereby and the fulfillment of the terms thereof, will not
violate, conflict with or constitute or result in a breach of or a
default under (or an event that with notice or lapse of time, or both,
would constitute a breach of or a default under) any of the terms or
provisions of (a) the certificate of incorporation or bylaws of HWIM, (b)
any material indenture, mortgage, deed of trust, loan agreement, note,
lease, license, franchise agreement or other material agreement or
instrument to which any of the Issuers or the Subsidiaries is a party or
to which any of their respective properties or assets are subject or (c)
to the best of my knowledge (assuming compliance with all applicable
Federal and state securities and "Blue Sky" laws) any statute, judgment,
decree, order, rule or regulation of any court or governmental agency or
body applicable to any of the Issuers or the Subsidiaries or any of their
respective properties or assets, which violation, conflict, breach or
default would, individually or in the aggregate, have any Material
Adverse Effect.
(x) Except as described in the Final Memorandum, there are no legal
or governmental proceedings pending or threatened to which any of the
Issuers or the Subsidiaries is a party or to which the respective
properties or assets of the Issuers or the Subsidiaries are subject that
would be required to be described in a prospectus pursuant to the Act
that are not described in the Final Memorandum, or that seek to restrain,
enjoin, prevent the consummation of or otherwise challenge the issuance
or sale of the Securities to the Initial Purchasers or the consummation
of the transactions described in the Final Memorandum under the captions
"Use of Proceeds" or "The Lemmerz Acquisition".
<PAGE> 47
-5-
(xi) Each of the Transactions has been duly authorized by HWIM to the
extent it is or will be a party thereto.
I have participated in conferences with officers and other
representatives of the Company, representatives of the independent public
accountants for the Company, outside counsel for the Company, your counsel
and your representatives at which the contents of the Memorandum and related
matters were discussed and, although I am not passing upon and do not assume
any responsibility for the accuracy, completeness or fairness of the statements
contained in the Final Memorandum, I advise you that, on the basis of the
foregoing (relying, with respect to Lemmerz, primarily upon (i) the
representations and warranties of Lemmerz and the shareholders of Lemmerz
contained in the Acquisition Agreement and (ii) the due diligence reports
prepared by counsel and other representatives of the Company retained in
connection with the Company's acquisition of Lemmerz (copies of which have been
provided to your counsel in connection with their due diligence review of the
Company); provided, however, that I have not independently investigated or
verified, nor do I assume any responsibility for, the information contained in
such reports), no facts have come to my attention that lead me to believe that
the Final Memorandum as of its date and as of the Closing Date contained or
contains an untrue statement of a material fact or omitted or omits to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (it being understood
that I have not been requested to and do not make any comment with respect to
the financial statements and the notes thereto and other financial and
accounting information included or incorporated by reference in the Final
Memorandum).
<PAGE> 1
EXHIBIT 1.2
HAYES WHEELS INTERNATIONAL, INC.
$150,000,000
9 1/8% Senior Subordinated Notes due 2007
PURCHASE AGREEMENT
July 16, 1997
CIBC WOOD GUNDY SECURITIES CORP.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
c/o CIBC Wood Gundy Securities Corp.
425 Lexington Avenue
3rd Floor
New York, New York 10017
Ladies and Gentlemen:
Hayes Wheels International, Inc., a Delaware corporation (the
"Company"), and each of the Company's subsidiaries listed in Exhibit A hereto
(each, a "Subsidiary Guarantor" and, collectively, the "Subsidiary Guarantors"
and, together with the Company, the "Issuers") hereby confirm their agreement
with you (the "Initial Purchasers"), as set forth below.
1. The Securities. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to the Initial Purchasers
$150,000,000 aggregate principal amount of its 9 1/8% Senior Subordinated Notes
due 2007 (the "Notes"). The obligations of the Company under the Indenture
(as hereinafter defined) and the Notes will be unconditionally guaranteed (the
"Guarantees"), on a joint and several basis, by each Subsidiary Guarantor. The
Notes and the Guarantees are to be issued pursuant to the Indenture (the
"Indenture"), dated July 15, 1997, among the Company, The Bank of New York, a
New York corporation, as trustee (the "Trustee"), and the Subsidiary
Guarantors. The Notes and the Guarantees are hereinafter referred to
collectively as the "Securities."
The sale of the Securities to the Initial Purchasers (the "Offering")
will be made without registration of the Securities under the Securities Act of
1933, as amended, (the "Act") and the rules and regulations of the Securities
and Exchange Commission (the "Commission") thereunder, in reliance upon the
exemption therefrom provided by Section 4(2) of the Act. Holders of the
Securities will have the benefits of a Registration Rights Agreement to be
dated as of July 15, 1997
<PAGE> 2
-2-
among the Issuers and the Initial Purchasers (the "Registration Rights
Agreement").
In connection with the sale of the Securities, the Company has
prepared an offering memorandum dated July 16, 1997 (the "Memorandum") setting
forth or including a description of the terms of the Securities, the terms of
the Offering, a description of the Company and any material developments
relating to the Company occurring after the date of the most recent financial
statements included therein.
The Securities are being issued and sold in connection with the
repayment of certain indebtedness outstanding under the Company's senior
secured term loan facility (as amended, the "Amended Credit Agreement")
among the Company, Canadian Imperial Bank of Commerce, as administrative agent,
Merrill Capital Corporation, as documentation agent, and the other financial
institutions party thereto, as lenders which will be further amended on or
prior to the closing date.
This Agreement, the Securities, the Exchange Notes (as defined in the
Registration Rights Agreement), the Private Exchange Notes (as defined in the
Registration Rights Agreement), the Registration Rights Agreement and the
Indenture are herein collectively referred to as the "Offering Documents."
2. Representations and Warranties of the Issuers. The Issuers,
jointly and severally, represent and warrant to and agree with the Initial
Purchasers that:
(a) The Memorandum, as of its date and at the Closing Date (as
defined in Section 3 hereof), did not and will not contain any 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, except that the
representations and warranties set forth in this Section 2(a) do not
apply to statements or omissions that are made in reliance upon and in
conformity with information relating to the Initial Purchasers furnished
to the Company in writing by the Initial Purchasers expressly for use in
the Memorandum or any amendment or supplement thereto, which information
is set forth in Section 15.
(b) Each of the Issuers and the Subsidiaries (as hereinafter
defined) that is a corporation organized under the laws of a jurisdiction
of the United States has been and at and as of the Closing Date will be
duly incorpo-
<PAGE> 3
-3-
rated and each of the Issuers and each Subsidiary that is a corporation
organized under the laws of a jurisdiction of the United States is and at
and as of the Closing Date will be validly existing in good standing as a
corporation under the laws of its jurisdiction of incorporation, with the
requisite corporate power and authority to own its properties and conduct
its business as now conducted as described in the Memorandum, is and at
and as of the Closing Date will be duly qualified to do business as a
foreign corporation in good standing in all other jurisdictions where the
ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to be so qualified
would not, individually or in the aggregate, have a material adverse
effect on the business, condition (financial or other) or results of
operations of any of the Issuers and the Subsidiaries, taken as a whole
(any such event a "Material Adverse Effect"); each of the Issuers and the
Subsidiaries that is not a corporation organized under the laws of a
jurisdiction of the United States, has been and at and as of the Closing
Date will be duly organized and validly existing under the laws of the
jurisdiction in which it is so organized, with the requisite power and
authority to own its properties and conduct its business as now conducted
and as described in the Memorandum; the Company had as of the date
specified therein the authorized, issued and outstanding capitalization
set forth in the Memorandum; except as set forth in Exhibit B hereto and
for the Subsidiary Guarantors (collectively, the "Subsidiaries"), the
Company does not have any subsidiaries or own directly or indirectly any
of the capital stock or other equity securities of any other person; all
of the outstanding shares of capital stock of the Issuers and the
Subsidiaries have been, duly authorized and validly issued, are fully
paid and nonassessable and were not issued in violation of any preemptive
or similar rights and, in the case of the Subsidiary Guarantors and the
Subsidiaries, are owned free and clear of all liens, encumbrances,
equities and restrictions on transferability (other than those imposed by
the Act and the state securities or "Blue Sky" laws); except as set forth
in the Memorandum, no options, warrants or other rights to purchase from
any Issuer or any Subsidiary, agreements or other obligations of any
Issuer or any Subsidiary or other rights to convert any obligation into,
or exchange any securities for, shares of capital stock of or ownership
interests in any Issuer or any Subsidiary are outstanding.
<PAGE> 4
-4-
(c) Each of the Issuers has the required corporate power and
authority to execute, deliver and perform its obligations under the
Indenture, the Securities, the Exchange Notes and the Private Exchange
Notes. The Securities, the Exchange Notes, the Private Exchange Notes
and the guarantees to be endorsed thereon have each been duly and validly
authorized by each of the Issuers for issuance and, when executed by the
Issuers and authenticated by the Trustee in accordance with the
provisions of the Indenture and, in the case of the Securities, delivered
to and paid for by the Initial Purchasers in accordance with the terms
hereof, will have been duly executed, issued and delivered and will
constitute valid and legally binding obligations of the Issuers, entitled
to the benefits of the Indenture and enforceable against the Issuers in
accordance with their terms except that the enforcement thereof may be
limited by (i) bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally or (ii) general principles of equity
(regardless of whether such enforcement is considered in a proceeding at
law or in equity); each of the Issuers has all requisite corporate power
and authority to execute, deliver and perform its obligations under the
Indenture, the Securities, the Exchange Notes and the Private Exchange
Notes, and the Indenture has been duly and validly authorized by the
Issuers and is in a form to be qualified under the Trust Indenture Act of
1939, as amended (the "TIA") and, when executed and delivered by the
Issuers (assuming the due authorization, execution and delivery by the
Trustee), will constitute a valid and legally binding agreement of the
Issuers, enforceable against the Issuers in accordance with its terms
except that the enforcement thereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting creditors' rights generally
or (ii) general principles of equity (regardless of whether such
enforcement is considered in a proceeding at law or in equity).
(d) Each of the Issuers has the requisite corporate power and
authority to execute, deliver and perform its obligations under the
Registration Rights Agreement. The Registration Rights Agreement has
been duly and validly authorized by the Issuers and, when executed and
delivered by the Issuers (assuming the due authorization, execution and
delivery by the Initial Purchasers), will constitute a valid and legally
binding agreement of the Issuers, en-
<PAGE> 5
-5-
forceable against the Issuers in accordance with its terms except (i)
that the enforcement thereof may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to or affecting creditors' rights generally, or general
principles of equity (regardless of whether such enforcement is
considered in a proceeding at law or in equity) and (ii) as any rights to
indemnity or contribution thereunder may be limited by federal and state
securities laws and public policy considerations.
(e) Each of the Issuers has the requisite corporate power and
authority to execute, deliver and perform its obligations under this
Agreement. This Agreement has been duly and validly authorized by the
Issuers and, when executed and delivered by the Issuers, will constitute
a valid and legally binding agreement of the Issuers, enforceable against
the Issuers in accordance with its terms except (i) that the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
or affecting creditors' rights generally or general principles of equity
(regardless of whether such enforcement is considered in a proceeding at
law or in equity) and (ii) as any rights to indemnity or contribution
hereunder may be limited by federal and state securities laws and public
policy considerations.
(f) Except as set forth in the Memorandum, no consent, approval,
authorization or order of any court or governmental agency or body is
required for the performance of any of the Offering Documents by the
Issuers or, to the extent each is or will be a party thereto, or for the
consummation by the Issuers or, of any of the transactions contemplated
thereby, except for such consents, approvals, authorizations or orders as
have been obtained or made or as may be required under the Act and the
TIA (with respect to the transactions contemplated by the Registration
Rights Agreement) or as may be required under state securities or "Blue
Sky" laws in connection with the purchase and distribution of the
Securities by the Initial Purchasers; and none of the Issuers or, is (i)
in violation of its certificate of incorporation or bylaws, (ii) in
violation of any statute, judgment, decree, order, rule or regulation
applicable to it or any of its properties or assets, which violation
would, individually or in the aggregate, have a Material Adverse Effect,
or (iii) in default in the performance or observance of any obliga-
<PAGE> 6
-6-
tion, agreement, covenant or condition contained in any of the Offering
Documents or any other contract, indenture, mortgage, deed of trust, loan
agreement, note, lease, license, franchise agreement, permit, certificate
or agreement or instrument to which it is a party or to which it is
subject, which default would, individually or in the aggregate, have a
Material Adverse Effect.
(g) The execution, delivery and performance by the Issuers of each
of the Offering Documents to which it is a party, and the consummation by
the Issuers of the transactions contemplated thereby and the fulfillment
of the terms thereof, will not violate, conflict with or constitute or
result in a breach of or a default under (or an event that, with notice
or lapse of time, or both, would constitute a breach of or a default
under) any of (a) the terms or provisions of any indenture, mortgage,
deed of trust, loan agreement, note, lease, license, franchise agreement,
or agreement or instrument to which any of the Issuers or the
Subsidiaries is a party or to which any of their respective properties or
assets are subject, which violation, conflict, breach or default would,
individually or in the aggregate, have a Material Adverse Effect, (b) the
certificate of incorporation or bylaws of any of the Issuers or the
Subsidiaries or (c) (assuming compliance with all applicable Federal and
state securities and "Blue Sky" laws) any statute, judgment, decree,
order, rule or regulation of any court or governmental agency or other
body applicable to the Issuers or the Subsidiaries or any of their
respective properties or assets, which violation, conflict, breach or
default would, individually or in the aggregate, have a Material Adverse
Effect.
(h) The audited consolidated financial statements and schedules of
each of the Company and Lemmerz included in the Memorandum present fairly
the consolidated financial position, results of operations and cash flows
of the Company and Lemmerz, at the dates and for the periods to which
they relate and have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis, except as otherwise
stated therein; the unaudited consolidated financial statements and the
related notes of the Company and Lemmerz included in the Memorandum
present fairly the consolidated financial position, results of operations
and cash flows of the Company and Lemmerz at the dates and for the
periods to which they relate, subject to year-end audit adjustments, and
have been prepared in accordance with generally accepted ac-
<PAGE> 7
-7-
counting principles applied on a consistent basis except as otherwise
stated therein and have been prepared on a basis substantially consistent
with that of the audited financial statements referred to above except as
otherwise stated therein; to the best knowledge of the Company, after due
inquiry, the summary and selected financial and statistical data included
in the Memorandum present fairly the information shown therein and have
been prepared and compiled on a basis consistent with the audited and
unaudited financial statements included therein, except as otherwise
stated therein; and KPMG Peat Marwick LLP and KPMG Deutsche
Treuhand-Gesellschaft Aktiengesellschaft Wirtschaftsprufungsgesellschaft,
which have examined certain of such financial statements and schedules as
set forth in their reports included in the Memorandum, are independent
public accounting firms as required by the Act.
(i) (i) The pro forma financial statements and other pro forma
financial information (including the notes thereto) included in the
Memorandum (A) have been prepared in accordance with applicable
requirements of Rule 11-02 of Regulation S-X promulgated under the Act
and (B) have been properly computed on the bases described therein; (ii)
the assumptions used in the preparation of the pro forma financial
statements and other pro forma financial information included in the
Memorandum are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances referred
to therein.
(j) Except as described in the Memorandum, there is not pending
or, to the best knowledge of the Issuers, threatened any action, suit,
proceeding, inquiry or investigation, governmental or otherwise, to which
any of the Issuers or the Subsidiaries is a party, or to which their
respective properties or assets are subject, before or brought by any
court, arbitrator or governmental agency or body, that, if determined
adversely to the Issuers or the Subsidiaries, would, individually or in
the aggregate, have a Material Adverse Effect or that seeks to restrain,
enjoin, prevent the consummation of or otherwise challenge the issuance
or sale of the Securities to be sold hereunder or the consummation of the
transactions described in the Memorandum under the captions "Use of
Proceeds."
(k) The Issuers and the Subsidiaries possess adequate licenses or
other rights to use all patents, trade-
<PAGE> 8
-8-
marks, service marks, trade names, copyrights and know-how (i) that are
necessary to conduct their business as described in the Memorandum and
(ii) the loss of which would, individually or in the aggregate, have a
Material Adverse Effect.
(l) None of the Issuers or the Subsidiaries has received any notice
of infringement of or conflict with (or knows of any such infringement of
or conflict with) asserted rights of others with respect to any patents,
trademarks, service marks, trade names, copyrights or know-how that, if
such assertion of infringement or conflict were sustained, would,
individually or in the aggregate, have a Material Adverse Effect.
(m) Each of the Issuers and the Subsidiaries has obtained all
licenses, permits, franchises and other governmental authorizations, the
lack of which would, individually or in the aggregate, have a Material
Adverse Effect.
(n) Subsequent to the respective dates as of which information is
given in the Memorandum and except as described therein, (i) the Issuers
and the Subsidiaries have not incurred any material liabilities or
obligations, direct or contingent, or entered into any material
transactions, in either case whether or not in the ordinary course of
business, and (ii) the Issuers and the Subsidiaries have not purchased
any of their respective outstanding capital stock, or declared, paid or
otherwise made any dividend or distribution of any kind on any of their
respective capital stock or otherwise.
(o) None of the Issuers or the Subsidiaries has taken or will take
any action that would cause this Agreement or the issuance or sale of the
Securities to violate Regulation G, T, U or X of the Board of Governors
of the Federal Reserve System, in each case as in effect, or as the same
may hereafter be in effect, on the Closing Date.
(p) Each of the Issuers and the Subsidiaries has good and
marketable title to all real property described in the Memorandum as
being owned by it and good and marketable title to the leasehold estate
in the real property described therein as being leased by it, free and
clear of all liens, charges, encumbrances or restrictions, except, in
each case, as described in the Memorandum or such as would not,
individually or in the aggregate, have a Material Adverse Effect.
<PAGE> 9
-9-
(q) Each of the Issuers and the Subsidiaries has filed all necessary
federal, state and foreign income and franchise tax returns, except where
the failure to so file such returns would not, individually or in the
aggregate, have a Material Adverse Effect; and, other than taxes due
thereon or tax deficiencies which any Issuer or Subsidiary reasonably
believe that it has provided adequate reserves, has paid all taxes due
thereon and there is no tax deficiency that has been asserted against any
Issuer or Subsidiary that would, individually or in the aggregate, have a
Material Adverse Effect.
(r) (i) Immediately after the consummation of the transactions
contemplated by this Agreement (including the use of proceeds from the
sale of Securities on the Closing Date), the fair value and present fair
saleable value of the assets of the Company will exceed the sum of its
stated liabilities and identified contingent liabilities; and (ii) the
Company is not, nor will it be, after giving effect to the execution,
delivery and performance of the Offering Documents, to the extent it is a
party thereto, and the consummation of the transactions contemplated
thereby, (a) left with unreasonably small capital with which to carry on
its business as it is proposed to be conducted, (b) unable to pay its
debts (contingent or otherwise) as they mature or (c) insolvent.
(s) Assuming the accuracy of the Initial Purchasers'
representations and warranties set forth in Section 5 hereof, and the due
performance by the Initial Purchasers of the covenants and agreements set
forth in Section 5 hereof, the offer and sale of the Securities to the
Initial Purchasers in the manner contemplated by this Agreement and the
Memorandum does not require registration under the Act and the Indenture
does not require qualification under the TIA.
(t) No securities of the Company or any of its Subsidiaries are (i)
of the same class (within the meaning of Rule 144A under the Act) as the
Securities and (ii) listed on a national securities exchange registered
under Section 6 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or quoted in a U.S. automated interdealer quotation
system.
(u) None of the Issuers or the Subsidiaries, any of their
respective Affiliates or any person acting on their behalf (other than
the Initial Purchasers) has, engaged in
<PAGE> 10
-10-
any directed selling efforts (as that term is defined in Regulation S
under the Act ("Regulation S")) with respect to the Securities; and the
Issuers, the Subsidiaries, their respective Affiliates and any person
acting on their behalf (other than the Initial Purchasers) have acted in
accordance with the offering restrictions requirements of Regulation S.
(v) Except as disclosed in the Memorandum and except as would not
individually or in the aggregate have a Material Adverse Effect, (A) each
of the Issuers and the Subsidiaries is in compliance with all applicable
Environmental Laws, (B) each of the Issuers and the Subsidiaries has made
all filings and provided all notices required under any applicable
Environmental Law, and has all permits, authorizations and approvals
required under any applicable Environmental Laws and is in compliance
with their requirements, (C) there are no pending or, to the best
knowledge of the Issuers, after due inquiry, threatened Environmental
Claims against any of the Issuers or the Subsidiaries and (D) none of the
Issuers or the Subsidiaries has knowledge of any circumstances with
respect to any of their respective properties or operations that could
reasonably be anticipated to form the basis of an Environmental Claim
against any of them or any of their subsidiaries or any of their
respective properties or operations and the business operations relating
thereto which Environmental Claims would, individually or in the
aggregate, have a Material Adverse Effect.
For purposes of this Agreement, the following terms shall have the
following meanings: "Environmental Law" means any federal, state, local
or municipal statute, law, rule, regulation, ordinance, code or rule and
any judicial or administrative interpretation thereof, including any
judicial or administrative order, consent decree or judgment binding on
any of the Issuers or the Subsidiaries relating to pollution or
protection of the environment or health or safety or any chemical,
material or substance that is subject to regulation thereunder.
"Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, written notices
of responsibility, information requests, liens, written notices of
noncompliance or violation, investigations or proceedings relating in any
way to any Environmental Law.
<PAGE> 11
-11-
(w) None of the Issuers or the Subsidiaries is required to
register as an "investment company" or a company "controlled by" an
"investment company" within the meaning of the Investment Company
Act of 1940, as amended.
(x) Except as stated in the Memorandum, none of the Issuers or the
Subsidiaries or any of their directors, officers or controlling persons,
has taken, directly or indirectly, any action designed, or that might
reasonably be expected, to cause or result, under the Act or otherwise,
in, or that has constituted, stabilization or manipulation of the price
of any security of any Issuer to facilitate the sale or resale of the
Securities (it being understood that no representation or warranty is
made as to any actions by the Initial Purchasers).
3. Purchase, Sale and Delivery of the Securities. On the basis of
the representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Issuers agree to
issue and sell to the Initial Purchasers, and each of the Initial Purchasers
severally agrees to purchase from the Issuers, at 97.5% of their principal
amount, the respective aggregate principal amounts of the Securities set forth
opposite their respective names on Exhibit C hereto. The obligations of the
Initial Purchasers under this Agreement are several and not joint. One or more
certificates in definitive form for the Securities that the Initial Purchasers
have agreed to purchase hereunder, and in such denomination or denominations
and registered in such name or names as each Initial Purchaser requests upon
notice to the Company at least 48 hours prior to the Closing Date, shall be
delivered by or on behalf of the Company, against payment by or on behalf of
the Initial Purchasers of the purchase price therefor by wire transfer of
immediately available funds net of the overnight cost of such funds to the
account of the Company previously designated by it in writing. Such delivery
of and payment for the Securities shall be made at the offices of Cahill Gordon
& Reindel, 80 Pine Street, New York, New York 10005, at 9:00 a.m., New York
time, on July 22, 1997, or at such date as the Initial Purchasers and the
Company may agree upon, such time and date of delivery against payment being
herein referred to as the "Closing Date." The Company will make such
certificate or certificates for the Securities available for checking and
packaging by the Initial Purchasers at the offices in New York, New York of
CIBC Wood Gundy Securities Corp. at least 24 hours prior to the Closing Date.
<PAGE> 12
-12-
4. Registration Rights of Holders of Securities. The Initial
Purchasers and their direct and indirect transferees of the Securities will
have such rights with respect to the registration thereof under the Act and
qualification of the Indenture under the TIA as are set forth in the
Registration Rights Agreement.
5. Resale of Securities. Each Initial Purchaser represents and
warrants to, and agrees with, the Company that (a) it is a "qualified
institutional buyer" as defined in Rule 144A under the Act ("QIB"); (b) it
has not and will not, directly or indirectly, solicit offers for, or offer or
sell, the Securities by any form of general solicitation or general advertising
(as those terms are used in Regulation D under the Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the Act; (c)
it has not and will not, directly or indirectly, engage in any "directed
selling efforts" (as defined in Regulation S under the Act); and (d) it has and
will solicit offers for the Securities only from, and will offer, sell and
deliver the Securities only to, (A) in the case of offers inside the United
States, (i) persons whom such Initial Purchasers reasonably believe to be QIBs
or, if any such person is buying for one or more institutional accounts for
which such person is acting as fiduciary or agent, only when such person has
represented to such Initial Purchasers that each such account is a QIB to whom
notice has been given that such sale or delivery is being made in reliance on
Rule 144A or (ii) a limited number of other institutional investors each of
which is reasonably believed by the Initial Purchaser to be an "accredited
investor" (as defined in Rule 501(a)(1)(2), (3) or (7) of the Act) that, prior
to their purchase of the Securities, deliver to the Initial Purchaser a letter
containing the representations and agreements set forth in Annex I to the
Memorandum and (B) in the case of offers outside the United States, to persons
other than U.S. Persons in compliance with Regulation S under the Act ("foreign
purchasers," which terms shall include dealers or other professional
fiduciaries in the United States acting on a discretionary basis for foreign
beneficial owners (other than an estate or trust)); provided, however, that, in
the case of this clause (B), in purchasing such Securities such persons are
deemed to have represented and agreed as provided under the caption "Notice to
Investors" contained in the Memorandum.
6. Certain Covenants. The Issuers, jointly and severally, covenant
and agree with the Initial Purchasers that:
<PAGE> 13
-13-
(a) None of the Issuers will amend or supplement the Memorandum or
any amendment or supplement thereto of which the Initial Purchasers shall
not previously have been advised and furnished a copy for a reasonable
period of time prior to the proposed amendment or supplement and as to
which the Initial Purchasers or counsel for the Initial Purchasers shall
reasonably object. The Issuers will promptly, upon the reasonable
request of the Initial Purchasers or counsel to the Initial Purchasers,
make any amendments or supplements to the Memorandum that may be
reasonably necessary or advisable in connection with the resale of the
Securities by the Initial Purchasers.
(b) The Issuers will cooperate with the Initial Purchasers in
arranging for the qualification of the Securities for offering and sale
under the securities or "Blue Sky" laws of such jurisdictions as the
Initial Purchasers may designate and will continue such qualifications in
effect for as long as may be necessary to complete the distribution of
the Securities by the Initial Purchasers; provided, however, that in
connection therewith none of the Issuers shall be required to qualify as
a foreign corporation or to execute a general consent to service of
process in any jurisdiction or to take any other action that would
subject it to general service of process or to taxation in respect of
doing business in any jurisdiction in which it is not otherwise subject.
(c) If, at any time prior to the completion of the distribution by
the Initial Purchasers of the Securities or, if issued, the Private
Exchange Notes, any event occurs or information becomes known as a result
of which the Memorandum as then amended or supplemented would include any
untrue statement of a material fact, or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if for any
other reason it is necessary at any time to amend or supplement the
Memorandum to comply with applicable law, the Issuers will promptly
notify the Initial Purchasers thereof (who thereafter will not use such
Memorandum until appropriately amended or supplemented) and will prepare,
at the expense of the Issuers, an amendment or supplement to the
Memorandum that corrects such statement or omission or effects such
compliance.
(d) The Company will, without charge, provide to each Initial
Purchaser and to counsel to the Initial Pur-
<PAGE> 14
-14-
chasers as many copies of the Memorandum or any amendment or supplement
thereto as the Initial Purchasers may reasonably request.
(e) During the period of five years from the Closing Date, the
Company will furnish to the Initial Purchasers (a) as soon as available,
a copy of each report and other communication (financial or otherwise) of
the Company mailed to the Trustee or the holders of the Securities,
stockholders or filed with the Commission or any national securities
exchange on which any class of securities of the Company may be listed
and (b) from time to time such other information concerning the Company
as you may reasonably request.
(f) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (other than solely by reason
of a default by the Initial Purchasers of their obligations hereunder
after all conditions hereunder have been satisfied in accordance
herewith) or if this Agreement shall be terminated by the Initial
Purchasers because of any failure or refusal on the part of the Issuers
to comply with the terms or fulfill any of the conditions of this
Agreement, the Company agrees to reimburse you for all reasonable
out-of-pocket expenses (including fees and expenses of counsel for the
Initial Purchasers) incurred by you in connection herewith.
(g) The Company will apply the net proceeds from the sale of the
Securities as set forth under "Use of Proceeds" in the Memorandum.
(h) Prior to the Closing Date, the Company will furnish to the
Initial Purchasers, as soon as they have been prepared by or are
available to the Company, a copy of any unaudited interim consolidated
financial statements of the Company for any period subsequent to the
period covered by the most recent financial statements appearing in the
Memorandum.
(i) None of the Issuers or any of their respective Affiliates will
sell, offer for sale or solicit offers to buy or otherwise negotiate in
respect of any "security" (as defined in the Act) which could be
integrated with the sale of the Securities in a manner which would
require the registration under the Act of the Securities.
<PAGE> 15
-15-
(j) The Issuers will not, and will not permit any of the
Subsidiaries to, solicit any offer to buy or offer to sell the Securities
by means of any form of general solicitation or general advertising (as
those terms are used in Regulation D under the Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the Act.
(k) For so long as any of the Securities remain outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Act and not able to be sold in their entirety under Rule 144 under the
Act (or any successor provision), the Company will make available, upon
request, to any seller of such Securities the information specified in
Rule 144A(d)(4) under the Act, unless the Company is then subject to
Section 13 or 15(d) of the Exchange Act.
(l) The Issuers will use their best efforts to (i) permit the
Securities to be included for quotation on the Private Offering, Resales,
and Trading through Automated Linkages Market ("PORTAL") and (ii) permit
the Securities to be eligible for clearance and settlement through The
Depository Trust Company ("DTC").
(m) In connection with Securities offered and sold in an offshore
transaction (as defined in Regulation S), the Company will not register
any transfer of such Securities not made in accordance with the
provisions of Regulation S and will not, except in accordance with the
provisions of Regulation S, if applicable, issue any such Securities in
the form of definitive securities.
7. Expenses. Notwithstanding any termination of this Agreement
(pursuant to Section 11 or otherwise), the Company agrees to pay the following
costs and expenses and all other costs and expenses incident to the performance
by the Issuers of their obligations hereunder: (i) the preparation, printing
or reproduction of the Memorandum, (including financial statements) and each
amendment or supplement to it; (ii) the printing (or reproduction) and delivery
(including postage, air freight charges and charges for counting and packaging)
of such copies of the Memorandum and all amendments or supplements to it as may
be reasonably requested for use in connection with the offering and sale of the
Securities; (iii) the preparation, printing, authentication, issuance and
delivery of certificates for the Securities, including any stamp taxes in
connection with the original issuance and sale
<PAGE> 16
-16-
of the Securities and trustees' fees; (iv) the reproduction and delivery of
this Agreement, the preliminary and supplemental "Blue Sky" memoranda,
including filing fees and reasonable fees and disbursements of Cahill Gordon &
Reindel, counsel to the Initial Purchasers, relating thereto, and all other
agreements or documents reproduced and delivered in connection with the
offering of the Securities; (v) the registration or qualification of the
Securities for offer and sale under the securities or Blue Sky laws of the
several states (including the reasonable fees, expenses and disbursements of
counsel to the Initial Purchasers relating to such registration and
qualification); (vi) the transportation and other expenses incurred by or on
behalf of Company representatives in connection with presentations to
prospective purchasers of the Securities; (vii) the fees and expenses of the
Company's accountants and the fees and expenses of counsel (including local and
special counsel) for the Issuers; (viii) fees and expenses of the Trustee
including fees and expenses of its counsel; and (ix) any fees charged by
investment rating agencies for the rating of the Securities.
8. Conditions of the Initial Purchasers' Obligations. The several
obligations of the Initial Purchasers to purchase and pay for the Securities
are subject to the accuracy of the representations and warranties contained
herein, to the performance by the Issuers of their respective covenants and
agreements hereunder and to the following additional conditions unless waived
in writing by the Initial Purchasers:
(i) None of the issuance and sale of the Securities pursuant to this
Agreement or any other transactions contemplated by any of the Offering
Documents or the Memorandum shall be enjoined (temporarily or
permanently) and no restraining order or other injunctive order shall
have been issued; and there shall not have been any legal action, order,
decree or other administrative proceeding instituted or threatened
against any of the Issuers or against you relating to the issuance of the
Securities or the Initial Purchasers' activities in connection therewith,
or any other transaction contemplated by any of the Offering Documents or
the Memorandum.
(ii) Subsequent to the effective date of this Agreement, there shall
not have occurred (i) any change, or any development involving a
prospective change, in or affecting the condition (financial or other),
business, properties, prospects, net worth or results of operations of
the Issuers and the Subsidiaries, taken as a whole, not contemplated by
the Memorandum that, in your opinion, would
<PAGE> 17
-17-
materially adversely affect the market for the Securities, or (ii) any
event or development relating to or involving any of the Issuers, the
Subsidiaries or any of the respective officers or directors of the
Issuers or the Subsidiaries that makes any statement made in the
Memorandum untrue or that, in the opinion of the Issuers and their
counsel or the Initial Purchasers and their counsel, requires the making
of any addition to or change in the Memorandum in order to state a
material fact necessary in order to make the statements made therein not
misleading or to comply with law.
(iii) The Initial Purchasers shall have received an opinion of
counsel to the Issuers in form and substance satisfactory to the Initial
Purchasers and counsel to the Initial Purchasers, dated the Closing Date,
of each of (i) Skadden, Arps, Slate, Meagher & Flom LLP, substantially in
the form of Exhibit D-1 hereto, and (ii) Daniel M. Sandberg, Esquire,
General Counsel to the Company substantially in the form of Exhibit D-2.
(iv) The Initial Purchasers shall have received an opinion, dated
the Closing Date, of Cahill Gordon & Reindel, counsel to the Initial
Purchasers, with respect to the sufficiency of certain legal matters
relating to this Agreement and such other related matters as the Initial
Purchasers may require. In rendering such opinion, Cahill Gordon &
Reindel shall have received and may rely upon such certificates and other
documents and information as they may reasonably request to pass upon
such matters. In addition, in rendering their opinion, Cahill Gordon &
Reindel may state that its opinion is limited to matters of New York,
Delaware corporate and federal law.
(v) The Initial Purchasers shall have received, from KPMG Peat
Marwick LLP, independent public accountants for the Issuers, and KPMG
Deutsche Treuhand-Gesellschaft Aktiengesellschaft
Wirtschaftsprufungsgesellschaft, independent public accountants for
Lemmerz Holding GmbH, a wholly-owned subsidiary of the Company
("Lemmerz"), "comfort" letters dated the date hereof and the Closing
Date, in form and substance reasonably satisfactory to the Initial
Purchasers and Cahill Gordon & Reindel, counsel to the Initial
Purchasers.
(vi) The representations and warranties of the Issuers contained in
this Agreement which are qualified as to materiality shall be true and
correct, and those represen-
<PAGE> 18
-18-
tations and warranties of the Issuers which are not so qualified shall be
true and correct in all material respects, on and as of the Closing Date;
the Issuers shall have complied in all material respects with all
agreements and satisfied all conditions on their part to be performed or
satisfied hereunder at or prior to the Closing Date.
(vii) There shall not have been any change in the capital stock of
the Issuers nor any material increase in the consolidated short-term or
long-term debt of the Issuers, in each case, from that set forth or
contemplated in the Memorandum (or any amendment or supplement thereto)
and (b) the Issuers shall not have any liabilities or obligations,
contingent or otherwise (whether or not in the ordinary course of
business), that are material to the Issuers, taken as a whole, other than
those reflected in the Memorandum (or any amendment or supplement
thereto) or contemplated by the Offering Documents.
(viii) You shall have received certificates, dated the Closing Date
and signed by the chief executive officer and the chief financial officer
of the Company and each Subsidiary Guarantor (or such other officers as
are acceptable to you), to the effect that each of the conditions to
closing set forth in this Section 8 have been satisfied.
(ix) The Initial Purchasers shall have received on or before the
Closing Date from the Company a true and correct copy of an amendment to
the Amended Credit Agreement, in a form satisfactory to the Initial
Purchasers (the "Amendment"), which Amendment shall have been executed by
all necessary parties thereto and shall be in full force and effect.
(x) The Issuers shall have furnished or caused to be furnished to you
such further certificates and documents as you shall have reasonably
requested.
Any certificate or document signed by any officer of an Issuer and
delivered to you or to counsel for the Initial Purchasers shall be deemed a
representation and warranty by such Issuer to each Initial Purchaser as to the
statements made therein.
All such opinions, certificates, letters, schedules, documents or
instruments delivered pursuant to this Agreement will comply with the
provisions hereof only if they are reasonably satisfactory in all material
respects to the Initial
<PAGE> 19
-19-
Purchasers and counsel to the Initial Purchasers. The Issuers shall furnish to
the Initial Purchasers such conformed copies of such opinions, certificates,
letters, schedules, documents and instruments in such quantities as the Initial
Purchasers shall reasonably request.
9. Indemnification and Contribution. (a) Each Issuer jointly and
severally agrees to indemnify and hold harmless each Initial Purchaser, and
each person, if any, who controls any of the Initial Purchasers within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, against any
losses, claims, damages or liabilities, joint or several, to which such Initial
Purchaser or such controlling person may become subject under the Act, the
Exchange Act or otherwise, insofar as any such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of any material
fact contained in (A) the Memorandum or (B) any application or other
document, or any amendment or supplement thereto, executed by any Issuer
or based upon written information furnished by or on behalf of any Issuer
filed in any jurisdiction in order to qualify the Securities under the
securities or "Blue Sky" laws thereof or filed with the Commission or any
securities association or securities exchange (each an "Application"); or
(ii) the omission or alleged omission to state, in the Memorandum or
any amendment thereto, or any Application, a material fact required to be
stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading,
and will reimburse, as incurred, each Initial Purchaser and each such
controlling person for any reasonable and documented out-of-pocket legal or
other expenses reasonably incurred by the Initial Purchasers or such
controlling person in connection with investigating, defending against or
appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action;
provided, however, that none of the Issuers will be liable in any such case to
an Initial Purchaser or any controlling person of such Initial Purchaser to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any untrue statement or alleged untrue statement or omission or alleged
omission made in the Memorandum or any amendment thereto or any Application in
reliance upon and in conformity with
<PAGE> 20
-20-
written information furnished to the Issuers by or on behalf of such Initial
Purchaser specifically for use therein. This indemnity agreement will be in
addition to any liability that the Issuers may otherwise have to the
indemnified parties. None of the Issuers will, without the prior written
consent of the Initial Purchasers, which shall not be unreasonably withheld or
delayed, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification by the Initial Purchasers may be sought hereunder (whether or
not the Initial Purchasers or any person who controls either of the Initial
Purchasers within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act is a party to such claim, action, suit or proceeding), unless such
settlement, compromise or consent includes an unconditional release (or any
other release reasonably acceptable to the Initial Purchasers) of the Initial
Purchasers and each such controlling person from all liability arising out of
such claim, action, suit or proceeding.
(b) Each Initial Purchaser will severally and not jointly indemnify and
hold harmless the Issuers, their respective directors, officers and each
person, if any, who controls any of the Issuers within the meaning of Section
15 of the Act or Section 20 of the Exchange Act against any losses, claims,
damages or liabilities to which any of the Issuers or any such director,
officer or controlling person may become subject under the Act, the Exchange
Act, or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in the
Memorandum or any amendment thereto or any Application or (ii) the omission or
the alleged omission to state therein a material fact required to be stated in
the Memorandum or any amendment thereto, 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 reliance upon and in conformity with written information
furnished to any of the Issuers by or on behalf of such Initial Purchaser
specifically for use therein; and, subject to the limitation set forth
immediately preceding this clause, will reimburse, as incurred, any reasonable
and documented out-of-pocket legal or other expenses reasonably incurred by any
of the Issuers or any such director, officer or controlling person in
connection with investigating or defending against or appearing as a
third-party witness in connection with any such loss, claim, damage, liability
or action in respect thereof. This indemnity agreement will be in addition to
any liability that the Initial Purchasers may oth-
<PAGE> 21
-21-
erwise have to the indemnified parties. The Initial Purchasers will not,
without the prior written consent of the Issuers, which shall not be
unreasonably withheld or delayed, settle or compromise or consent to the entry
of any judgment in any pending or threatened claim, action, suit or proceeding
in respect of which indemnification by any of the Issuers may be sought
hereunder (whether or not any of the Issuers or any person who controls the
Issuers within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act is a party to such claim, action, suit or proceeding), unless such
settlement, compromise or consent includes an unconditional release or any
other release reasonably acceptable to the Issuers) of any such Issuer and each
such controlling person from all liability arising out of such claim, action,
suit or proceeding.
(c) Promptly after receipt by an indemnified party under this Section 9
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
this Section 9, notify the indemnifying party of the commencement thereof; but
the omission so to notify the indemnifying party will not relieve it from any
liability that it may have to any indemnified party except to the extent that
such omission results in the forfeiture by the indemnifying party of
substantial rights and defenses. In case any such action is brought against
any indemnified party, and such indemnified party notifies the indemnifying
party of the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party; provided, however,
that if the defendants in any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have reasonably
concluded, based on the advice of counsel, that there may be one or more legal
defenses available to it and/or other indemnified parties that are different
from or additional to those available to any such indemnifying party then the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of such indemnified party or parties and such indemnified
party or parties shall have the right to select separate counsel to defend such
action on behalf of such indemnified party or parties. After notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof and approval by such indemnified party of counsel appointed to
defend such action, the indemnifying party will not be liable to such
indemnified party under this Section 9 for any legal or other expenses, other
than reasonable and documented
<PAGE> 22
-22-
out-of-pocket costs of investigation, 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
immediately preceding sentence (it being understood, however, that in
connection with such action the indemnifying party shall not be liable for the
expenses of more than one separate counsel (in addition to local counsel) in
any one action or separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations or circumstances,
designated by the Initial Purchasers in the case of paragraph (a) of this
Section 9 or the Issuers in the case of paragraph (b) of this Section 9,
representing the indemnified parties under such paragraph (a) or paragraph (b),
as the case may be, who are parties to such action or actions); (ii) the
indemnifying party has authorized in writing the employment of counsel for the
indemnified party at the expense of the indemnifying parties; or (iii) the
indemnifying party shall have failed to assume the defense or retain counsel
reasonably satisfactory to the indemnified party.
(d) In circumstances in which the indemnity agreement provided for in the
preceding paragraphs of this Section 9 is unavailable or insufficient to hold
harmless an indemnified party in respect of any losses, claims, damages or
liabilities (or actions in respect thereof), other than as a result of the
proviso to Section 9(a), each indemnifying party, in order to provide for just
and equitable contribution, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect (i) the relative benefits received by the indemnifying
party or parties on the one hand and the indemnified party on the other from
the offering of the Securities or (ii) if the allocation provided by the
foregoing clause (i) is not permitted by applicable law, not only such relative
benefits but also the relative fault of the indemnifying party or parties on
the one hand and the indemnified party on the other in connection with the
statements or omissions or alleged statements or omissions that resulted in
such losses, claims, damages or liabilities (or actions in respect thereof).
The relative benefits received by the Issuers on the one hand and the Initial
Purchasers on the other shall be deemed to be in the same proportion as the
total proceeds from the offering of the Securities (before deducting expenses
other than Initial Purchasers' discounts and commissions) received by the
Issuers bear to the total initial purchasers' discounts and commissions
received by the Initial Purchasers. The relative fault of the parties
<PAGE> 23
-23-
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 Issuers on the
one hand or the Initial Purchasers on the other, the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission, and any other equitable considerations appropriate in
the circumstances. The Issuers and the Initial Purchasers agree that it would
not be equitable if the amount of such contribution were determined by pro rata
or per capita allocation (even if the Issuers on the one hand and the Initial
Purchasers on the other hand were treated as one entity for such purpose) or by
any other method of allocation that does not take into account the equitable
considerations referred to in the first sentence of this paragraph (d).
Notwithstanding any other provision of this paragraph (d), the Initial
Purchasers shall not be obligated to make contributions hereunder that in the
aggregate exceed the total initial purchasers' discounts and commissions
received by the Initial Purchasers under this Agreement, less the aggregate
amount of any damages that the Initial Purchasers have otherwise been required
to pay by reason of the untrue or alleged untrue statements or the omissions or
alleged omissions to state a material fact, and no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this paragraph (d), each person, if any,
who controls any of the Initial Purchasers within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act shall have the same rights to
contribution as the Initial Purchasers, and each director of any of the
Issuers, each officer and each person, if any, who controls any of the Issuers
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
shall have the same rights to contribution as the Issuers.
(e) Notwithstanding anything to the contrary in this Article 9, the
indemnification and contribution provisions of the Registration Rights
Agreement shall govern any claim with respect thereto.
10. Survival Clause. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Issuers, their
respective officers and the Initial Purchasers set forth in this Agreement or
made by or on behalf of them, respectively, pursuant to this Agreement shall
remain in full force and effect, regardless of (i) any investigation made by or
on behalf of the Issuers, any of their re-
<PAGE> 24
-24-
spective officers or directors, the Initial Purchasers or any controlling
person referred to in Section 9 hereof and (ii) delivery of and payment for the
Securities, and shall be binding upon and shall inure to the benefit of, any
successors, assigns, heirs, personal representatives of the Issuers, the
Initial Purchasers and indemnified parties referred to in Section 9 hereof.
The respective agreements, covenants, indemnities and other statements set
forth in Sections 7 and 9 hereof shall remain in full force and effect,
regardless of any termination or cancellation of this Agreement.
11. Termination. (a) This Agreement may be terminated in the sole
discretion of the Initial Purchasers by notice to the Issuers given in the
event that the Issuers shall have failed, refused or been unable to satisfy all
conditions on its respective part to be performed or satisfied hereunder on or
prior to the Closing Date or, if at or prior to the Closing Date:
(i) any of the Issuers or the Subsidiaries shall have sustained any
loss or interference with respect to their respective businesses or
properties from fire, flood, hurricane, earthquake, accident or other
calamity, whether or not covered by insurance, or from any labor dispute
or any legal or governmental proceeding, which loss or interference has
had or has a material adverse effect on the business, condition
(financial or other), properties, prospects or results of operations of
the Issuers and the Subsidiaries taken as a whole, or there shall have
been any material adverse change, or any development involving a
prospective material adverse change (including without limitation a
change in management or control of the Issuers), in the business,
condition (financial or other), properties, prospects or results of
operations of the Issuers and the Subsidiaries except as described in or
contemplated by the Memorandum (exclusive of any amendment or supplement
thereto);
(ii) trading in securities generally on the New York or American
Stock Exchange shall have been suspended or minimum or maximum prices
shall have been established on any such exchange;
(iii) a banking moratorium shall have been declared by New York or
United States authorities; or
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any for-
<PAGE> 25
-25-
eign power, (B) an outbreak or escalation of any other insurrection or
armed conflict involving the United States or (C) any material change in
the financial markets of the United States that, in the sole judgment of
the Initial Purchasers, makes it impracticable or inadvisable to proceed
with the offering or the delivery of the Securities as contemplated by
the Memorandum, as amended as of the date hereof.
(b) Termination of this Agreement pursuant to this Section 11 shall
be without liability of any party to any other party except as provided in
Section 10 hereof.
12. Notices. All communications hereunder shall be in writing and,
if sent to the Initial Purchasers, shall be mailed or delivered or telecopied
and confirmed in writing to the Initial Purchasers c/o CIBC Wood Gundy
Securities Corp., 425 Lexington Avenue, 3rd Floor, New York, New York 10017,
Attention: Walter F. McLallen, and with a copy to Cahill Gordon & Reindel,
80 Pine Street, New York, New York 10005, Attention: Roger Meltzer, Esq. If
sent to the Company or any of the Subsidiary Guarantors, shall be mailed,
delivered or telegraphed and confirmed in writing, to Hayes Wheels
International, Inc., 38481 Huron River Drive, Romulus, Michigan 48174,
Attention: General Counsel and with a copy to Skadden, Arps, Slate, Meagher &
Flom LLP, One Rodney Square, Wilmington, Delaware 19801, Attention: Robert B.
Pincus, Esq.
13. Successors. This Agreement shall inure to the benefit of and be
binding upon the Initial Purchasers and each of the Issuers and their
respective successors and legal representatives, and nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy or claim under or in respect of
this Agreement, or any provisions herein contained; this Agreement and all
conditions and provisions hereof being intended to be and being for the sole
and exclusive benefit of such persons and for the benefit of no other person
except that (i) the indemnities of the Issuers contained in Section 9 of this
Agreement shall also be for the benefit of any person or persons who control
the Initial Purchasers within the meaning of Section 15 of the Act or Section
20 of the Exchange Act and (ii) the indemnities of the Initial Purchasers
contained in Section 9 of this Agreement shall also be for the benefit of the
directors of the Issuers, their respective officers and any person or persons
who controls any Issuer within the meaning of Section 15 of the Act or Section
20 of the Exchange Act. No
<PAGE> 26
-26-
purchaser of Securities from the Initial Purchasers will be deemed a successor
because of such purchase.
14. Joint and Several Obligations. All of the obligations of the
Issuers hereunder shall be joint and several obligations of each of them.
15. Information Supplied by the Initial Purchasers. The statements
set forth in the first legend on the inside front cover of the Memorandum and in
the penultimate and last sentence of the third paragraph and the seventh
paragraph under the heading "Plan of Distribution" constitute the only
information furnished by the Initial Purchasers to the Issuers for purposes of
Section 2(a) hereof.
16. Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto and supersedes all prior agreements,
understandings and arrangements, oral or written, among the parties hereto with
respect to the subject matter hereof.
17. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAW.
18. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
<PAGE> 27
-27-
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among the Issuers
and the Initial Purchasers.
Very truly yours,
HAYES WHEELS INTERNATIONAL, INC.,
a Delaware corporation
By:
----------------------------------------
Name:
Title:
HAYES WHEELS INTERNATIONAL-CALIFORNIA,
INC., a Delaware corporation
By:
----------------------------------------
Name:
Title:
HAYES WHEELS INTERNATIONAL-GEORGIA,
INC., a Delaware
corporation
By:
----------------------------------------
Name:
Title:
HAYES WHEELS INTERNATIONAL-INDIANA,
INC., a Delaware corporation
By:
----------------------------------------
Name:
Title:
<PAGE> 28
-28-
HAYES WHEELS INTERNATIONAL-MEXICO, INC., a
Delaware corporation
By:
----------------------------------------
Name:
Title:
HAYES WHEELS INTERNATIONAL-MICHIGAN,
INC., a Michigan corporation
By:
----------------------------------------
Name:
Title:
MOTOR WHEEL CORPORATION,
an Ohio corporation
By:
----------------------------------------
Name:
Title:
MWC ACQUISITION SUB, INC.,
a Delaware corporation
By:
----------------------------------------
Name:
Title:
<PAGE> 29
-29-
The foregoing Agreement is hereby confirmed
and accepted as of the date first above
written.
CIBC WOOD GUNDY SECURITIES CORP.
By:
---------------------------------------
Name:
Title:
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
By:
---------------------------------------
Name:
Title:
<PAGE> 30
Exhibit A
Subsidiary Guarantors
Hayes Wheels International-California, Inc.
Hayes Wheels International-Georgia, Inc.
Hayes Wheels International-Indiana, Inc.
Hayes Wheels International-Mexico, Inc.
Hayes Wheels International-Michigan, Inc.
Motor Wheel Corporation
MWC Acquisition Sub, Inc.
<PAGE> 31
Exhibit B
Company Subsidiaries
Hayes (Europe), Ltd.
Hayes Wheels, S.p.A.
Hayes Wheels Autokola NH, as
Reliable Transportation Components Inc.
Hayes Wheels International - Missouri, Inc.
Hayes Wheels International - Kentuckulus, Inc.
Hayes Wheels Aftermarket, Inc.
Hayes Wheels Japan Limited
Hayes Wheels de Espana, S.A.
HWI Service Corporation
Hayes Wheels Foreign Sales Corp.
Motor Wheel de Mexico, S.A. de C.V.
Motor Wheel Corporation of Canada, Ltd.
AMW Holdings, Inc.
HL Holdings BV
HL Holdings de Espana
HL Holding GmbH
Hayes Wheels Hungary Consulting Limited Liability Company
Newco No. 17 Vermogensverwaltungs GmbH (post-Acquisition)
Newco No. 18 Vermogensverwaltungs GmbH (post-Acquisition)
Lemmerz Holding GmbH
Metaalgieterij Geisen B.V.
Lemmerz Espanola S.A.
Lemmerz-Werke GmbH
Lemmerz-Werke Wohnungsbaugesellschaft mbH
Lemmerz Service System N.V.
Lemmerz Belgie N.V.
Lemmerz Comerico e Participacoes SRL
Lemmerz Canada Inc.
PSW Prazisions-und Spezialwerkzeuge AG
Lemmerz-Inci-Jany Sanayi A.S.
Company Joint Venture and Other Interests
Numbers in parentheses represent percent of total owned by the Company or one
of its subsidiaries.
Hayes Wheels de Venezuela, C.A. (49)
Hayes Wheels de Mexico, S.A. de C.V. (40)
Aluminum Wheel Technology, Inc. (50)
Riviera Tool Company (30)
Metalurgica FPS do Brasil, Ltda. (49)
Continental Lemmerz (Portugal), Componentes para
Automoveis, Lda. (49)
<PAGE> 32
-2-
Borlem S.A. Empreendimentos Industriais (45)
Reynolds-Lemmerz Industries (25)
Kalyani-Lemmerz Ltd. (25)
Jantas Jant Sanayi ve Ticaret S.A. (25)
Siam Lemmerz Co., Ltd. (25)
Additional Information
See Section 4.3(c), paragraph (ii), of the disclosure schedule provided by
Lemmerz pursuant to the acquisition agreement dated as of June 6, 1997 among
the Company, Cromodoro Wheels S.p.A., and the shareholders of Lemmerz (the
"Acquisition Agreement") regarding certain qualifying shares held by third
parties in certain Subsidiaries of Lemmerz.
<PAGE> 33
Exhibit C
<TABLE>
<CAPTION>
Principal Amount
Initial Purchaser of Securities
- ----------------- ----------------
<S> <C>
CIBC Wood Gundy Securities Corp. $ 90,000,000
Merrill Lynch, Pierce, Fenner
& Smith Incorporated 60,000,000
Total $150,000,000
============
</TABLE>
<PAGE> 34
Exhibit D-1
Form of Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
Opinion, dated the Closing Date and addressed to the Initial
Purchasers, of Skadden, Arps, Slate, Meagher & Flom LLP, counsel to the Issuers,
to the effect that:
(i) The Securities have been duly authorized by each of the Issuers
other than Hayes Wheels International-Michigan, Inc. (the "Delaware
Issuers") and when executed by the Delaware Issuers and authenticated by
the Trustee in accordance with the provisions of the Indenture, and
delivered to and paid for by the Initial Purchasers in accordance with
the terms of the Purchase Agreement, will have been duly executed, issued
and delivered and will constitute valid and binding obligations of the
Delaware Issuers, entitled to the benefits of the Indenture and
enforceable against the Delaware Issuers in accordance with their terms,
except that the enforcement thereof may be subject to (a) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally, and (b) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity).
(ii) The Exchange Notes, the Private Exchange Notes and the
guarantees thereof have been duly and validly authorized by the Delaware
Issuers and when executed by the Delaware Issuers and authenticated by
the Trustee in accordance with the provisions of the Registration Rights
Agreement and the Indenture, and delivered to the Initial Purchasers in
accordance with the terms of the Registration Rights Agreement, will have
been duly executed, issued and delivered and will constitute valid and
binding obligations of the Delaware Issuers, entitled to the benefits of
the Indenture and enforceable against the Delaware Issuers in accordance
with their terms, except that the enforcement thereof may be subject to
(a) bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally, and (b) general principles of equity
(regardless of whether enforceability is considered in a proceeding at
law or in equity).
<PAGE> 35
-2-
(iii) Each of the Delaware Issuers has the requisite corporate power
and corporate authority to execute, deliver and perform its obligations
under the Indenture, the Securities, the Exchange Notes and the Private
Exchange Notes; the Indenture has been duly authorized by the Delaware
Issuers and, when executed and delivered by the Delaware Issuers
(assuming the due authorization, execution and delivery by the Trustee),
will constitute a valid and binding agreement of the Delaware Issuers,
enforceable against the Delaware Issuers in accordance with its terms,
except that the enforcement thereof may be subject to (a) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally and (b) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity).
(iv) Each of the Delaware Issuers has the requisite corporate power
and authority to execute, deliver and perform its obligations under the
Registration Rights Agreement. The Registration Rights Agreement has
been duly authorized by the Delaware Issuers and, when executed and
delivered by the Delaware Issuers, will constitute a valid and binding
agreement of the Delaware Issuers, enforceable against the Delaware
Issuers in accordance with its terms except (i) that the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally or general principles of equity (regardless
of whether such enforcement is considered in a proceeding at law or in
equity) and (ii) as any rights to indemnity or contribution hereunder may
be limited by federal and state securities laws and public policy
considerations.
(v) Each of the Delaware Issuers has the requisite corporate power
and authority to execute, deliver and perform its obligations under the
Purchase Agreement. The Purchase Agreement has been duly authorized by
the Delaware Issuers and, when executed and delivered by the Delaware
Issuers, will constitute a valid and binding agreement of the Delaware
Issuers, enforceable against the Delaware Issuers in accordance with its
terms except (i) that the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally or
general principles of equity
<PAGE> 36
-3-
(regardless of whether such enforcement is considered in a proceeding at
law or in equity) and (ii) as any rights to indemnity or contribution
hereunder may be limited by federal and state securities laws and public
policy considerations.
(vi) No Governmental Approval is required for the performance by the
Delaware Issuers of their respective obligations under the Offering
Documents or the consummation of the transactions contemplated thereby
relating to the Securities.
As used in such counsel's opinion, (a) the term "Applicable Laws"
means only the General Corporation Law of the State of Delaware and those
laws, rules and regulations of the State of New York and the United
States of America which, in our experience, are normally applicable to
transactions of the type contemplated by the Purchase Agreement (other
than federal and state securities laws, the TIA and the rules and
regulations of the National Association of Securities Dealers, Inc.)
without having made any special investigation as to the applicability of
any specific law, rule or regulation except as specified herein; (b) the
term "Governmental Authorities" means any Delaware, New York or federal
executive, legislative, judicial, administrative or regulatory body; and
(c) the term "Governmental Approval" means any consent, approval,
license, authorization or validation of, or filing, qualification or
registration with, any Governmental Authority pursuant to Applicable
Laws.
(vii) The execution, delivery and performance by the Delaware
Issuers of each of the Offering Documents and the consummation by the
Delaware Issuers of the transactions contemplated thereby and the
fulfillment of the terms thereof, will not violate or conflict with the
certificate of incorporation or bylaws of any of the Delaware Issuers.
(viii) The Amendment has been duly authorized by each of the
Delaware Issuers, which is a party thereto.
(ix) The statements set forth in the Memorandum under the captions
"Description of the Notes" and "Description of Other Indebtedness,"
insofar as such statements constitute a summary of the terms of the
documents referred to therein, fairly summarize such terms in all
material respects.
<PAGE> 37
-4-
(x) None of the Issuers or the Subsidiaries is required to register
as an "investment company" or a company "controlled by" an "investment
company" as such terms are defined in the Investment Company Act of 1940,
as amended.
(xi) Neither the consummation of the transactions contemplated by
the Purchase Agreement nor the sale, issuance, execution or delivery of
the Securities will violate Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System.
(xii) The Indenture appears on its face to be appropriately
responsive in all material respects to the requirements of the TIA.
(xiii) Assuming (i) the accuracy of the representations and
warranties of the Company set forth in Section 2 of the Purchase
Agreement and of you in Section 5 of the Purchase Agreement, (ii) the due
performance by the Company of the covenants and agreements set forth in
Section 6 of the Purchase Agreement and the due performance by you of the
covenants and agreements set forth in Sections 5 and 6 of the Purchase
Agreement, (iii) your compliance with the offering and transfer
procedures and restrictions described in the Memorandum, (iv) the
accuracy of the representations and warranties made in accordance with
the Purchase Agreement and the Memorandum by purchasers to whom you
initially resell Securities and (v) that purchasers to whom you initially
resell Securities receive a copy of the Memorandum prior to such sale,
the offer, sale and delivery of the Securities to you in the manner
contemplated by the Purchase Agreement and the Memorandum and the initial
resale of the Securities by you in the manner contemplated in the
Memorandum and the Purchase Agreement, do not require registration under
the Act and the Indenture does not require qualification under the TIA,
it being understood that we express no opinion as to any subsequent
resale of any Security.
In addition, we have participated in conferences with officers and
other representatives of the Issuers, representatives of the independent public
accountants and representatives of the Initial Purchasers at which the contents
of the Memorandum were discussed and, although we are not passing upon and do
not assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Memorandum (except as indicated in clause (ix)
above) and have not made any independent check or verification thereof, on the
basis of the
<PAGE> 38
-5-
foregoing (relying as to materiality to a large extent upon the statements of
officers and other representatives of each of the Issuers) no facts have come
to our attention that have caused us to believe that the Memorandum as of its
date and as of the Closing Date contained or contains an untrue statement of a
material fact or omitted or omits 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 (it being understood that we express no opinion
on or belief with respect to the financial statements or other financial and
statistical data or information included in the Memorandum or on the
information contained in the Memorandum concerning Lemmerz and the subsidiaries
of Lemmerz).
<PAGE> 39
Exhibit D-2
Form of Opinion of Daniel M. Sandberg, Esq.
Opinion, dated the Closing Date and addressed to the Initial
Purchasers, of Daniel M. Sandberg, Esq., General Counsel to the Company, to
the effect that:
(i) Each of the Issuers has been duly incorporated and is validly
existing in good standing, as a corporation under the laws of its
jurisdiction of incorporation, with the requisite corporate power and
authority to own its properties and conduct its business as described in
the Memorandum and is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions where the
ownership or leasing of its properties or the conduct of its business
requires such qualification, except when the failure to be so qualified
would not, individually or in the aggregate, have a Material Adverse
Effect; the outstanding shares of capital stock of the Issuers and the
Subsidiaries have been duly authorized and validly issued, are fully paid
and nonassessable and were not issued in violation of any preemptive or
similar rights and, in the case of the Subsidiary Guarantors and the
Subsidiaries, except in connection with the Amended Credit Agreement, are
owned free and clear of all liens, encumbrances, equities and
restrictions on transferability (other than those imposed by the Act and
the state securities or "Blue Sky" laws); to the best of my knowledge,
except as set forth in the Memorandum, no options, warrants or other
rights to purchase from any Issuer or any Subsidiary or, agreements or
other obligations of any Issuer or any Subsidiary to issue or other
rights to cause the Company, to convert any obligation into, or exchange
any securities for, shares of capital stock or ownership interests in any
Issuer or any Subsidiary are outstanding.
(ii) The Guarantee has been duly and validly authorized by Hayes
Wheels International-Michigan, Inc. ("HWIM") and Motor Wheel Corporation
("MWC") and when the Securities are executed by the Company and
authenticated by the Trustee in accordance with the provisions of the
Indenture, and delivered to and paid for by the Initial Purchasers in
accordance with the terms of the Purchase Agreement, will have been duly
executed, issued and delivered and will constitute valid and legally
binding obliga-
<PAGE> 40
-2-
tion of HWIM and MWC, enforceable against HWIM and MWC in accordance with
its terms, except that the enforcement thereof may be subject to (a)
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
or other similar laws now or hereafter in effect relating to creditors'
rights generally, and (b) general principles of equity (regardless of
whether enforceability is considered in a proceeding at law or in
equity).
(iii) The guarantee of the Exchange Notes and the Private Exchange
Notes have been duly and validly authorized by HWIM and MWC and when the
Exchange Notes and the Private Exchange Notes have been executed by the
Company and authenticated by the Trustee in accordance with the
provisions of the Registration Rights Agreement and the Indenture, and
delivered to the Initial Purchasers in accordance with the terms of the
Registration Rights Agreement, will have been duly executed, issued and
delivered and will constitute a valid and legally binding obligation of
HWIM and MWC, enforceable against HWIM and MWC in accordance with its
terms, except that the enforcement thereof may be subject to (a)
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
or other similar laws now or hereafter in effect relating to creditors'
rights generally, and (b) general principles of equity (regardless of
whether enforceability is considered in a proceeding at law or in
equity).
(iv) Each of HWIM and MWC has the requisite corporate power and
corporate authority to execute, deliver and perform its obligations under
the Indenture, the Securities, the Exchange Notes and the Private
Exchange Notes; the Indenture has been duly and validly authorized by
HWIM and MWC and, when executed and delivered by HWIM and MWC (assuming
the due authorization, execution and delivery by the Trustee), will
constitute a valid and legally binding agreement of HWIM and MWC,
enforceable against HWIM and MWC in accordance with its terms, except
that the enforcement thereof may be subject to (a) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally and (b) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity.
(v) Each of HWIM and MWC has the requisite corporate power and
authority to execute, deliver and perform its obligations under the
Registration Rights Agreement. The
<PAGE> 41
-3-
Registration Rights Agreement has been duly and validly authorized by
HWIM and MWC and, when executed and delivered by HWIM and MWC, will
constitute a valid and legally binding agreement of HWIM and MWC,
enforceable against HWIM and MWC in accordance with its terms except (i)
that the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to or affecting creditors' rights generally or general
principles of equity (regardless of whether such enforcement is
considered in a proceeding at law or in equity) and (ii) as any rights
to indemnity or contribution hereunder may be limited by federal and
state securities laws and public policy considerations.
(vi) Each of HWIM and MWC has the requisite corporate power and
authority to execute, deliver and perform its obligations under the
Purchase Agreement. The Purchase Agreement has been duly and validly
authorized by HWIM and MWC and, when executed and delivered by HWIM and
MWC, will constitute a valid and legally binding agreement of HWIM and
MWC, enforceable against HWIM and MWC in accordance with its terms except
(i) that the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting creditors' rights generally
or general principles of equity (regardless of whether such enforcement
is considered in a proceeding at law or in equity) and (ii) as any
rights to indemnity or contribution hereunder may be limited by federal
and state securities laws and public policy considerations.
(vii) No consent, approval, authorization or order of any
governmental agency or body, or to the best of my knowledge, any court,
is required for the performance of any of the Offering Documents or any
of the agreements contemplated thereby or delivered in connection
therewith, or the consummation of the transactions contemplated thereby,
except such as may be required and have been obtained as described in the
Memorandum or as may be required under the Act, the TIA or state
securities or "Blue Sky" laws in connection with the purchase and
distribution of the Securities or the exchange of the Exchange Notes and
the Private Exchange Notes.
(viii) None of the Issuers or the Subsidiaries is (a) in violation
of its certificate of incorporation or bylaws, (b) in violation of any
statute, judgment, decree,
<PAGE> 42
-4-
order, rule or regulation applicable to any of its properties or assets,
which violation would, individually or in the aggregate, have a Material
Adverse Effect or (c) in breach of or in default under any of the
Offering Documents or any material contract, indenture, mortgage, deed of
trust, loan agreement, note, lease, license, franchise agreement, permit,
certificate or other material agreement or instrument to which it is a
party or to which it is subject, which breach or default would
individually or in the aggregate, have a Material Adverse Effect.
(ix) The execution, delivery and performance by the Issuers, to the
extent each is a party thereto, of each of the Offering Documents and the
Amended Credit Agreement and the consummation by the Issuers of the
transactions contemplated thereby and the fulfillment of the terms
thereof, will not violate, conflict with or constitute or result in a
breach of or a default under (or an event that with notice or lapse of
time, or both, would constitute a breach of or a default under) any of
the terms or provisions of (a) the certificate of incorporation or bylaws
of HWIM, (b) any material indenture, mortgage, deed of trust, loan
agreement, note, lease, license, franchise agreement or other material
agreement or instrument to which any of the Issuers or the Subsidiaries
is a party or to which any of their respective properties or assets are
subject or (c) to the best of my knowledge (assuming compliance with all
applicable Federal and state securities and "Blue Sky" laws) any statute,
judgment, decree, order, rule or regulation of any court or governmental
agency or body applicable to any of the Issuers or the Subsidiaries or
any of their respective properties or assets, which violation, conflict,
breach or default would, individually or in the aggregate, have any
Material Adverse Effect.
(x) Except as described in the Memorandum, there are no legal or
governmental proceedings pending or threatened to which any of the
Issuers or the Subsidiaries is a party or to which the respective
properties or assets of the Issuers or the Subsidiaries are subject that
would be required to be described in a prospectus pursuant to the Act
that are not described in the Memorandum, or that seek to restrain,
enjoin, prevent the consummation of or otherwise challenge the issuance
or sale of the Securities to the Initial Purchasers or the consummation
of the transactions described in the Memorandum under the captions "Use
of Proceeds".
<PAGE> 43
-5-
(xi) The Amendment has been duly authorized by HWIM to the extent it
is or will be a party thereto.
I have participated in conferences with officers and other
representatives of the Company, representatives of the independent public
accountants for the Company, outside counsel for the Company, your counsel and
your representatives at which the contents of the Memorandum and related
matters were discussed and, although I am not passing upon and do not assume
any responsibility for the accuracy, completeness or fairness of the statements
contained in the Memorandum, I advise you that, on the basis of the foregoing
[(relying, with respect to Lemmerz, primarily upon (i) the representations and
warranties of Lemmerz and the shareholders of Lemmerz contained in the
Acquisition Agreement and (ii) the due diligence reports prepared by counsel
and other representatives of the Company retained in connection with the
Company's acquisition of Lemmerz (copies of which have been provided to your
counsel in connection with their due diligence review of the Company);
provided, however, that I have not independently investigated or verified, nor
do I assume any responsibility for, the information contained in such
reports)], no facts have come to my attention that lead me to believe that the
Memorandum as of its date and as of the Closing Date contained or contains an
untrue statement of a material fact or omitted or omits to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (it being understood
that I have not been requested to and do not make any comment with respect to
the financial statements and the notes thereto and other financial and
accounting information included or incorporated by reference in the
Memorandum).
<PAGE> 1
EXHIBIT 4.2
================================================================================
HAYES WHEELS INTERNATIONAL, INC.
THE GUARANTORS NAMED HEREIN,
and
THE BANK OF NEW YORK, as Trustee
____________________
INDENTURE
Dated as of July 15, 1997
____________________
$150,000,000
9 1/8% Senior Subordinated Notes due 2007
================================================================================
<PAGE> 2
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
TIA Indenture
Section _Section_
- ------- ---------
<S> <C>
310(a)(1)................................................................ 7.10
(a)(2)................................................................ 7.10
(a)(3)................................................................ N.A.
(a)(4)................................................................ N.A.
(b)................................................................... 7.08; 7.10;
12.02
(b)(1)................................................................ 7.10
(b)(9)................................................................ 7.10
(c)................................................................... N.A.
311(a)................................................................... 7.11
(b)................................................................... 7.11
(c)................................................................... N.A.
312(a)................................................................... 2.05
(b)................................................................... 12.03
(c)................................................................... 12.03
313(a)................................................................... 7.06
(b)(1)................................................................ 7.06
(b)(2)................................................................ 7.06
(c)................................................................... 12.02
(d)................................................................... 7.06
314(a)................................................................... 4.02; 4.04
12.02
(b)................................................................... N.A.
(c)(1)................................................................ 12.04; 12.05
(c)(2)................................................................ 12.04; 12.05
(c)(3)................................................................ N.A.
(d)................................................................... N.A.
(e)................................................................... 12.05
(f)................................................................... N.A.
315(a)................................................................... 7.01; 7.02
(b)................................................................... 7.05; 12.02
(c)................................................................... 7.01
(d)................................................................... 6.05; 7.01;
7.02
(e)................................................................... 6.11
316(a) (last sentence)................................................... 12.06
(a)(1)(A)............................................................. 6.05
(a)(1)(B)............................................................. 6.04
(a)(2)................................................................ 8.02
(b)................................................................... 6.07
(c)................................................................... 8.04
317(a)(1)................................................................ 6.08
(a)(2)................................................................ 6.09
(b)................................................................... 7.12
318(a)................................................................... 12.01
</TABLE>
- --------------
N.A. means Not Applicable
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be
a part of the Indenture.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
<S> <C>
Section 1.01. Definitions ............................................... 1
Section 1.02. Other Definitions ......................................... 25
Section 1.03. Incorporation by Reference
of Trust Indenture Act ................................. 26
Section 1.04. Rules of Construction ..................................... 27
ARTICLE 2
THE NOTES
Section 2.01. Amount of Notes and Form and Dating ....................... 27
Section 2.02. Execution and Authentication .............................. 28
Section 2.03. Registrar and Paying Agent ................................ 29
Section 2.04. Paying Agent To Hold Assets in Trust ...................... 30
Section 2.05. Noteholder Lists .......................................... 30
Section 2.06. Transfer and Exchange ..................................... 30
Section 2.07. Replacement Notes ......................................... 32
Section 2.08. Outstanding Notes ......................................... 32
Section 2.09. Temporary Notes ........................................... 32
Section 2.10. Cancellation .............................................. 33
Section 2.11. Defaulted Interest ........................................ 33
Section 2.12. Deposit of Moneys ......................................... 33
Section 2.13. CUSIP Number .............................................. 34
Section 2.14. Book-Entry Provisions for Global Notes .................... 34
Section 2.15. Special Transfer Provisions ............................... 37
Section 2.16. Computation of Interest ................................... 39
ARTICLE 3
REDEMPTION
Section 3.01. Notices to Trustee ........................................ 39
Section 3.02. Selection by Trustee of Notes To Be Redeemed ............. 39
Section 3.03. Notice of Redemption ...................................... 40
Section 3.04. Effect of Notice of Redemption ............................ 41
Section 3.05. Deposit of Redemption Price ............................... 41
Section 3.06. Notes Redeemed in Part .................................... 42
</TABLE>
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<PAGE> 4
ARTICLE 4
COVENANTS
<TABLE>
<CAPTION>
Page
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<S> <C>
Section 4.01. Payment of Notes .......................................... 42
Section 4.02. SEC Reports ............................................... 42
Section 4.03. Waiver of Stay, Extension or Usury Laws ................... 43
Section 4.04. Compliance Certificate .................................... 44
Section 4.05. Payment of Taxes and Other Claims ......................... 45
Section 4.06. Maintenance of Properties and Insurance ................... 45
Section 4.07. Compliance with Laws ...................................... 46
Section 4.08. Corporate Existence ....................................... 46
Section 4.09. Maintenance of Office or Agency ........................... 47
Section 4.10. Limitation on Additional Indebtedness ..................... 47
Section 4.11. Limitation on Foreign Indebtedness ........................ 49
Section 4.12. Limitation on Common Stock of Subsidiaries ................ 50
Section 4.13. Limitation on Restricted Payments ......................... 50
Section 4.14. Limitation on Other Senior Subordinated Debt............... 52
Section 4.15. Limitation on Certain Asset Sales ......................... 52
Section 4.16. Limitation on Transactions with Affiliates ................ 55
Section 4.17. Limitations on Liens ...................................... 56
Section 4.18. Limitation on Creation of Subsidiaries .................... 56
Section 4.19. Payments for Consent ...................................... 57
Section 4.20. Change of Control ......................................... 57
ARTICLE 5
SUCCESSOR CORPORATION
Section 5.01. Limitation on Consolidation, Merger
and Sale of Assets ......................................... 60
Section 5.02. Successor Person Substituted ............................... 61
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default .......................................... 61
Section 6.02. Acceleration ............................................... 63
Section 6.03. Other Remedies ............................................. 64
Section 6.04. Waiver of Past Defaults and Events of Default .............. 64
Section 6.05. Control by Majority ........................................ 65
</TABLE>
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<PAGE> 5
<TABLE>
<CAPTION>
Page
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<S> <C>
Section 6.06. Limitation on Suits ....................................... 65
Section 6.07. Rights of Holders To Receive Payment ...................... 66
Section 6.08. Collection Suit by Trustee ................................ 66
Section 6.09. Trustee May File Proofs of Claim .......................... 66
Section 6.10. Priorities ................................................ 67
Section 6.11. Undertaking for Costs ..................................... 67
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee ......................................... 68
Section 7.02. Rights of Trustee ......................................... 69
Section 7.03. Individual Rights of Trustee .............................. 70
Section 7.04. Trustee's Disclaimer ...................................... 71
Section 7.05. Notice of Default ......................................... 71
Section 7.06. Reports by Trustee to Holders ............................. 71
Section 7.07. Compensation and Indemnity ................................ 71
Section 7.08. Replacement of Trustee .................................... 72
Section 7.09. Successor Trustee by Consolidation, Merger or Conversion .. 74
Section 7.10. Eligibility; Disqualification ............................. 74
Section 7.11. Preferential Collection of Claims ......................... 74
Against Company
Section 7.12. Paying Agents ............................................. 74
ARTICLE 8
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 8.01. Without Consent of Holders ................................ 75
Section 8.02. With Consent of Holders ................................... 76
Section 8.03. Compliance with Trust Indenture Act ....................... 77
Section 8.04. Revocation and Effect of Consents ......................... 77
Section 8.05. Notation on or Exchange of Notes .......................... 78
Section 8.06. Trustee To Sign Amendments, etc. .......................... 78
ARTICLE 9
DISCHARGE OF INDENTURE; DEFEASANCE
Section 9.01. Discharge of Indenture .................................... 79
Section 9.02. Legal Defeasance .......................................... 79
Section 9.03. Covenant Defeasance ....................................... 80
Section 9.04. Conditions to Defeasance or Covenant Defeasance ........... 80
</TABLE>
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<PAGE> 6
<TABLE>
<CAPTION>
Page
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<S> <C>
Section 9.05. Deposited Money and U.S. Government Obligations To Be
Held in Trust; Other Miscellaneous Provisions ............ 82
Section 9.06. Reinstatement .............................................. 83
Section 9.07. Moneys Held by Paying Agent ................................ 83
Section 9.08. Moneys Held by Trustee ..................................... 84
ARTICLE 10
GUARANTEE OF NOTES
Section 10.01. Guarantee ................................................ 85
Section 10.02. Execution and Delivery of Guarantees ..................... 86
Section 10.03. Limitation of Guarantee .................................. 86
Section 10.04. Additional Guarantors .................................... 87
Section 10.05. Release of Guarantor ..................................... 87
Section 10.06. Guarantee Obligations Subordinated to Guarantor
Senior Indebtedness .................................... 87
Section 10.07. Payment Over of Proceeds upon Dissolution, etc., of a
Guarantor .............................................. 88
Section 10.08. Suspension of Guarantee Obligations When Guarantor Senior
Indebtedness in Default ................................ 90
Section 10.09. Subrogation to Rights of Holders of Guarantor Senior
Indebtedness ........................................... 92
Section 10.10. Guarantee Subordination Provisions Solely To Define
Relative Rights ........................................ 93
Section 10.11. Application of Certain Article 11 Provisions ............. 94
ARTICLE 11
SUBORDINATION OF NOTES
Section 11.01. Notes Subordinate to Senior Indebtedness ................. 94
Section 11.02. Payment Over of Proceeds upon Dissolution, etc. .......... 94
Section 11.03. Suspension of Payment When Senior Indebtedness
in Default ............................................. 96
Section 11.04. Trustee's Relation to Senior Indebtedness ................ 98
Section 11.05. Subrogation to Rights of Holders of Senior
Indebtedness ........................................... 99
Section 11.06. Provisions Solely To Define Relative Rights .............. 99
</TABLE>
-iv-
<PAGE> 7
<TABLE>
<CAPTION>
Page
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Section 11.07. Trustee To Effectuate Subordination ....................... 100
Section 11.08. No Waiver of Subordination Provisions ..................... 100
Section 11.09. Notice to Trustee ......................................... 101
Section 11.10. Reliance on Judicial Order or Certificate of
Liquidating Agent ....................................... 102
Section 11.11. Rights of Trustee as a Holder of Senior
Indebtedness; Preservation of Trustee's Rights .......... 103
Section 11.12. Article Applicable to Paying Agents ....................... 103
Section 11.13. No Suspension of Remedies ................................. 103
ARTICLE 12
MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls .............................. 103
Section 12.02. Notices ................................................... 103
Section 12.03. Communications by Holders with Other Holders .............. 105
Section 12.04. Certificate and Opinion as to Conditions Precedent ........ 105
Section 12.05. Statements Required in Certificate and Opinion ............ 105
Section 12.06. When Treasury Notes Disregarded ........................... 106
Section 12.07. Rules by Trustee and Agents ............................... 106
Section 12.08. Business Days; Legal Holidays ............................. 106
Section 12.09. Governing Law ............................................. 107
Section 12.10. No Adverse Interpretation of Other Agreements.............. 107
Section 12.11. No Recourse Against Others ................................ 107
Section 12.12. Successors ................................................ 107
Section 12.13. Multiple Counterparts ..................................... 107
Section 12.14. Table of Contents, Headings, etc. ......................... 108
Section 12.15. Separability .............................................. 108
EXHIBITS
Exhibit A. Form of Note .............................................. A-1
Exhibit B. Form of Legend for 144A Note .............................. B-1
Exhibit C. Form of Legend for Regulation S Note ...................... C-1
Exhibit D. Form of Legend for Global Note ............................ D-1
Exhibit E. Form of Certificate for Non-QIB Transfers ................. E-1
Exhibit F. Form of Certificate for Regulation S Transfers............. F-1
</TABLE>
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Exhibit G. Form of Guarantee ....................................... G-1
</TABLE>
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<PAGE> 9
INDENTURE, dated as of July 15, 1997, among HAYES WHEELS
INTERNATIONAL, INC., a Delaware corporation, as Issuer (the "Company"), the
GUARANTORS (as hereinafter defined), and THE BANK OF NEW YORK, a New York
banking corporation, as Trustee (the "Trustee").
Each party agrees as follows for the benefit of the other parties
and for the equal and ratable benefit of the Holders of the Company's 9 1/8%
Senior Subordinated Notes due 2007 (the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.
"9 1/8% Notes" means the 9 1/8% Senior Subordinated Notes due 2007
of the Company, originally issued on June 30, 1997.
"9 1/8% Notes Indenture" means the Indenture, dated as of June 30,
1997, among the Company, the Guarantors and The Bank of New York, as Trustee, as
such indenture may be amended, modified or supplemented from time to time.
"11% Notes" means the 11% Senior Subordinated Notes due 2006 of the
Company.
"11% Notes Indenture" means the Indenture, dated as of July 2, 1996,
among the Company, the Guarantors and Comerica Bank, as Trustee, as such
indenture may be amended, modified or supplemented from time to time.
"Acquired Indebtedness" means Indebtedness of a Person (including an
Unrestricted Subsidiary) existing at the time such Person becomes a Restricted
Subsidiary or is merged or consolidated with or into the Company or a Restricted
Subsidiary or assumed in connection with the acquisition of assets from such
Person.
"Adjusted EBITDA" means, for any Person, for any period, the EBITDA
of such Person, plus any amounts excluded from the calculation of the
Consolidated Net Income of such Person pursuant to clause (b) of the definition
thereof.
"Additional Interest" means additional interest on the Notes which
the Company and the Guarantors, jointly and
<PAGE> 10
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severally, agree to pay to the Holders pursuant to Section 4a of the
Registration Rights Agreement.
"Adjusted Net Assets" of a Guarantor at any date shall mean the
lesser of the amount by which (x) the fair value of the property of such
Guarantor exceeds the total amount of liabilities, including, without
limitation, contingent liabilities (after giving effect to all other fixed and
contingent liabilities (including, without limitation, any guarantees of Senior
Indebtedness)), but excluding liabilities under the Guarantee, of such Guarantor
at such date and (y) the present fair salable value of the assets of such
Guarantor at such date exceeds the amount that will be required to pay the
probable liability of such Guarantor on its debts (after giving effect to all
other fixed and contingent liabilities (including, without limitation, any
guarantees of Senior Indebtedness)) and after giving effect to any collection
from any Subsidiary of such Guarantor in respect of the obligations of such
Subsidiary under the Guarantee), excluding Indebtedness in respect of the
Guarantee, as they become absolute and matured.
"Affiliate" of any specified Person means any other Person which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such specified Person. For the
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlling," "controlled by," and "under common control with"), as
used with respect to any Person, means 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.
"Agent" means any Registrar, Paying Agent, co-registrar or agent for
service of notices and demands.
"Amended Credit Agreement" means the Amended Credit Agreement, to be
dated on or about the Issue Date, among the Company, CIBC, as administrative
agent, Merrill Lynch, as documentation agent, and the lenders from time to time
parties thereto, as such agreement may be amended, modified or supplemented from
time to time or deferred, renewed, extended, refunded, refinanced, restructured
or replaced from time to time in whole or in part (whether with the original
administrative agent and lenders or other agents and lenders or otherwise, and
whether provided under the Amended Credit Agreement or other credit agreements
or otherwise).
<PAGE> 11
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"Argosy" means CIBC WG Argosy Merchant Fund 2, L.L.C.
"Asset Sale" means the sale, transfer or other disposition in any
single transaction or series of related transactions of (a) any Capital Stock of
or other equity interest in any Restricted Subsidiary of the Company, (b) all or
substantially all of the assets of the Company or of any Restricted Subsidiary
thereof, (c) real property or (d) all or substantially all of the assets of any
business, owned by the Company or any Restricted Subsidiary thereof, or a
division, line of business or comparable business segment of the Company or any
Restricted Subsidiary thereof; provided that Asset Sales shall not include (i)
sales, leases, conveyances, transfers or other dispositions to the Company or to
a Restricted Subsidiary or to any other Person if after giving effect to such
sale, lease, conveyance, transfer or other disposition such other Person becomes
a Restricted Subsidiary, (ii) leases, conveyances or other transfers by the
Company or a Restricted Subsidiary of Property to any Person as an Investment in
such Person provided that the Company or such Restricted Subsidiary receives
consideration at the time of such lease, conveyance or other transfer at least
equal to the fair market value of such Property and such Investment is included
in clause (v) of the second paragraph of Section 4.13.
"Asset Sale Proceeds" means, with respect to any Asset Sale, (i)
cash received by the Company or any Restricted Subsidiary from such Asset Sale
(including cash received as consideration for the assumption of liabilities
incurred in connection with or in anticipation of such Asset Sale), after (a)
provision for all income or other taxes measured by or resulting from such Asset
Sale, (b) payment of all brokerage commissions, underwriting and other fees and
expenses related to such Asset Sale, (c) provision for minority interest holders
in any Restricted Subsidiary as a result of such Asset Sale and (d) deduction of
appropriate amounts to be provided by the Company or a Restricted Subsidiary as
a reserve, in accordance with GAAP, against any liabilities associated with the
assets sold or disposed of in such Asset Sale and retained by the Company or a
Restricted Subsidiary after such Asset Sale, including, without limitation,
pension and other post-employment benefit liabilities and liabilities related to
environmental matters or against any indemnification obligations associated with
the assets sold or disposed of in such Asset Sale, and (ii) promissory notes and
other non-cash consideration received by the Company or any Restricted
Subsidiary from such Asset Sale or other disposition upon the liquidation or
conversion of such notes or non-cash consideration into cash.
<PAGE> 12
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"Attributable Indebtedness" in respect of a Sale and Lease-Back
Transaction means, as at the time of determination, the present value of the
notes (discounted according to GAAP at the cost of indebtedness implied in the
lease) of the total obligations of the lessee for rental payments during the
remaining term of the lease included in such Sale and Lease-Back Transaction
(including any period for which such lease has been extended).
"Autokola" means Hayes-Wheels Autokola N.H. a.s.
"Available Asset Sale Proceeds" means, with respect to any Asset
Sale, the aggregate Asset Sale Proceeds from such Asset Sale that have not been
applied in accordance with clause (iii)(A), (iii)(B), (iii)(C) or (iii)(D) of
Section 4.15(a) and which have not been the basis for an Excess Proceeds Offer
in accordance with clause (iii)(E) of such Section 4.15(a).
"Board of Directors" means the board of directors of the Company or
a Guarantor, as appropriate, or any committee authorized to act therefor.
"Board Resolution" means a copy of a resolution certified pursuant
to an Officers' Certificate to have been duly adopted by the Board of Directors
of the Company or a Guarantor, as appropriate, and to be in full force and
effect, and delivered to the Trustee.
"Capital Stock" means, with respect to any Person, any and all
shares or other equivalents (however designated) of capital stock, partnership
interests or any other participation, right or other interest in the nature of
an equity interest in such Person or any option, warrant or other security
convertible into any of the foregoing.
"Capitalized Lease Obligations" means Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP, and the amount of such Indebtedness
shall be the capitalized amount of such obligations determined in accordance
with GAAP.
"Cash Equivalents" means (i) direct obligations of the United States
of America or any agency thereof, or obligations guaranteed or insured by the
United States of America, provided that in each case such obligations mature
within one year from the date of acquisition thereof, (ii) certificates of
deposit maturing within one year from the date of creation
<PAGE> 13
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thereof issued by any U.S. national or state banking institution having
capital, surplus and undivided profits aggregating at least $500,000,000 and
rated at least A-1 by S&P and P-1 by Moody's, (iii) commercial paper with a
maturity of 180 days or less issued by a corporation (except an Affiliate of
the Company) organized under the laws of any state of the United States or the
District of Columbia and rated at least A-1 by S&P or at least P-1 by Moody's
and (iv) repurchase agreements and reverse repurchase agreements relating to
marketable direct obligations issued or unconditionally guaranteed by the
United States of America or issued by an agency thereof and backed by the full
faith and credit of the United States of America, in each case maturing within
one year from the date of acquisition; provided that the terms of such
agreements comply with the guidelines set forth in the Federal Financial
Agreements of Depository Institutions with Securities Dealers and Others, as
adopted by the Comptroller of the Currency and (v) tax-exempt auction rate
securities and municipal preferred stock, in each case, subject to reset no
more than 35 days after the date of acquisition and having a rating of at least
AA by S&P or AA by Moody's.
A "Change of Control" of the Company will be deemed to have occurred
at such time as (i) any Person (including a Person's Affiliates and associates),
other than a Permitted Holder, becomes the beneficial owner (as defined under
Rule 13d-3 or any successor rule or regulation promulgated under the Exchange
Act) of 50% or more of the total voting power of the Company's Common Stock,
(ii) any Person (including a Person's Affiliates and associates), other than a
Permitted Holder, becomes the beneficial owner of more than 30% of the total
voting power of the Company's Common Stock, and either (A) the Permitted Holders
beneficially own, in the aggregate, a lesser percentage of the total voting
power of the Common Stock of the Company than such other Person and do not have
the right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the Board of Directors of the Company or
[(B) JLL is the beneficial owner of less than 20% of the total voting power of
the Company's Common Stock], (iii) there shall be consummated any consolidation
or merger of the Company in which the Company is not the continuing or surviving
corporation or pursuant to which the Common Stock of the Company would be
converted into cash, securities or other property, other than a merger or
consolidation of the Company in which the holders of the Common Stock of the
Company outstanding immediately prior to the consolidation or merger hold,
directly or indirectly, at least a majority of the Common Stock of the surviving
corporation immediately after such consolida-
<PAGE> 14
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tion or merger, or (iv) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of Directors of the
Company (together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of the Company
has been approved by 66 2/3% of the directors then still in office who either
were directors at the beginning of such period or whose election or
recommendation for election was previously so approved) cease to constitute a
majority of the Board of Directors of the Company.
"Chase" means Chase Equity Associates, L.P.
"CIBC" means Canadian Imperial Bank of Commerce.
"Common Stock" of any Person means all Capital Stock of such Person
that is generally entitled to (i) vote in the election of directors of such
Person or (ii) if such Person is not a corporation, vote or otherwise
participate in the selection of the governing body, partners, managers or others
that will control the management and policies of such Person.
"Company" means the party named as such in the first paragraph of
this Indenture until a successor replaces such party pursuant to Article 5 of
this Indenture and thereafter means the successor and any other obligor on the
Notes.
"Company Request" means any written request signed in the name of
the Company by the Chief Executive Officer, the President, any Vice President,
the Chief Financial Officer or the Treasurer and attested to by the Secretary or
any Assistant Secretary of the Company.
"Consolidated Fixed Charges" means, with respect to any Person, the
sum of a Person's (i) Consolidated Interest Expense, plus (ii) the product of
(x) the aggregate amount of all dividends paid on Disqualified Capital Stock of
the Company or on each series of preferred stock of each Subsidiary of such
Person (other than dividends paid or payable in additional shares of preferred
stock or to the Company or any of its Wholly-Owned Subsidiaries) times (y) a
fraction, the numerator of which is one and the denominator of which is one
minus the then current effective combined federal, state and local tax rate of
such Person (expressed as a decimal), in each case, for such four-quarter
period.
"Consolidated Interest Expense" means, with respect to any Person,
for any period and without duplication, the ag-
<PAGE> 15
-7-
gregate amount of interest which, in conformity with GAAP, would be set forth
opposite the caption "interest expense" or any like caption on an income
statement for such Person and its Subsidiaries on a consolidated basis
(including, but not limited to, (i) imputed interest included in Capitalized
Lease Obligations, (ii) all commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers' acceptance financing, (iii)
net payments made in connection with Interest Rate Agreements, (iv) the
interest portion of any deferred payment obligation, (v) amortization of
discount or premium, if any, and (vi) all other non-cash interest expense
(other than interest amortized to cost of sales)) plus, all net capitalized
interest for such period and all interest paid under any guarantee of
Indebtedness (including a guarantee of principal, interest or any combination
thereof) of any Person, and minus (i) net payments received in connection with
Interest Rate Agreements and (ii) amortization of deferred financing costs and
expenses.
"Consolidated Net Income" means, with respect to any Person, for any
period, the aggregate of the net income of such Person and its Subsidiaries for
such period, on a consolidated basis, determined in accordance with GAAP;
provided, however, that there shall be excluded from Consolidated Net Income (a)
the net income of any Person which under GAAP is not consolidated with the
Person in question other than the amount of dividends or distributions paid to
the Person in question or the Subsidiary, (b) the net income of any Subsidiary
of the Person in question, other than a Domestic Subsidiary, that is subject to
any restriction or limitation on the payment of dividends or the making of other
distributions (other than pursuant to the Notes or this Indenture) to the extent
of such restriction or limitation (provided that if any such restriction or
limitation by its terms takes effect upon the occurrence of a default or an
event of default, such exclusion shall become effective only upon the occurrence
and during the continuance of such default or event of default), (c) the net
income of any Person acquired in a pooling of interests transaction for any
period prior to the date of such acquisition, (d) any net gain or loss resulting
from a sale of Property by the Person in question or any of its Subsidiaries
other than in the ordinary course of business, (e) extraordinary gains and
losses, (f) non-recurring gains, non-cash non-recurring losses and charges
(including restructuring charges and costs) and, in the case of the Company,
cash restructuring charges for any period prior to July 31, 1998, (g) any
amounts received by the Company or a Restricted Subsidiary which are used to
offset Investments pursuant to the terms of clause (ii) of the definition of
"Net In-
<PAGE> 16
-8-
vestments," and (h) in the case of clauses (d), (e) and (f), the associated tax
effects during such period.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Indenture is located
at 101 Barclay Street, Floor 21 West, New York, New York 10286.
"Default" means any event that is, or with the passing of time or
giving of notice or both would be, an Event of Default.
"Depository" means, with respect to the notes issued in the form of
one or more Global Notes, The Depository Trust Company or another Person
designated as Depository by the Company, which Person must be a clearing agency
registered under the Exchange Act.
"Designated Senior Indebtedness," as to the Company or any
Guarantor, as the case may be, means any Senior Indebtedness (a) under or in
respect of the Amended Credit Agreement, or (b) which at the time of
determination exceeds $25,000,000 in aggregate principal amount (or accreted
value in the case of Indebtedness issued at a discount) outstanding or available
under a committed facility, and (i) which is specifically designated in the
instrument evidencing such Senior Indebtedness as "Designated Senior
Indebtedness" by such Person and (ii) as to which the Trustee has been given
written notice of such designation.
"Disqualified Capital Stock" means any Capital Stock of the Company
or a Restricted Subsidiary thereof which, by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable at the
option of the holder), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, in whole or in part, on or
prior to the maturity date of the Notes, for cash or securities constituting
Indebtedness. Without limitation of the foregoing, Disqualified Capital Stock
shall be deemed to include any Preferred Stock of a Restricted Subsidiary of the
Company or the Company, under which, by agreement or otherwise, such Restricted
Subsidiary or the Company is obligated to pay current dividends or distributions
in cash during the period prior to the maturity date of the Notes; provided,
however, that Preferred Stock of the Company or any Restricted Subsidiary
thereof that is issued with the benefit
<PAGE> 17
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of provisions requiring a change of control offer to be made for such Preferred
Stock in the event of a change of control of the Company or Restricted
Subsidiary, which provisions have substantially the same effect as the
provisions described in Section 4.20, shall not be deemed to be Disqualified
Capital Stock solely by virtue of such provisions and, provided, further, that
Capital Stock owned by the Company or any Restricted Subsidiary shall not
constitute Disqualified Capital Stock.
"Domestic" with respect to any Person shall mean a Person whose
jurisdiction of incorporation or formation is the United States, any state
thereof or the District of Columbia.
"EBITDA" means, for any Person, for any period, an amount equal to
(a) the sum of (i) Consolidated Net Income for such period, plus (ii) the
provision for taxes for such period based on income or profits to the extent
such income or profits were included in computing Consolidated Net Income and
any provision for taxes utilized in computing net loss under clause (i) hereof,
plus (iii) Consolidated Interest Expense for such period, plus (iv) depreciation
for such period, plus (v) amortization for such period (including the
amortization of deferred financing costs and expenses), plus (vi) any other
non-cash items (including minority interests) reducing Consolidated Net Income
for such period, plus (vii) non-recurring losses and charges (including
restructuring charges and costs) whether cash or non-cash for such period to the
extent not included in the calculation of Consolidated Net Income, minus (viii)
all non-cash items increasing Consolidated Net Income for such period, all for
such Person and its Subsidiaries determined on a consolidated basis in
accordance with GAAP, except that with respect to the Company each of the
foregoing items shall be determined on a consolidated basis with respect to the
Company and its Restricted Subsidiaries only.
"Equity Offering" means an offering by the Company 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.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Notes" has the meaning provided in the Registration Rights
Agreement.
"Fixed Charge Coverage Ratio" of any Person means, with respect to
any determination date, the ratio of (i) EBITDA
<PAGE> 18
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for such Person's prior four full fiscal quarters for which financial results
have been reported immediately preceding the determination date, to (ii)
Consolidated Fixed Charges of such Person.
"Foreign EBITDA" means, for any period, the aggregate of the EBITDA
of each of the Company's Restricted Subsidiaries which are not Guarantors.
"Foreign Interest Expense" means, for any period, the aggregate of
the Consolidated Interest Expense of each of the Company's Restricted
Subsidiaries which are not Guarantors.
"GAAP" means generally accepted accounting principles consistently
applied as in effect in the United States from time to time.
"Guarantee" means the guarantee of the Obligations of the Company
with respect to the Notes by each Guarantor pursuant to the terms of Article 10
hereof.
"Guarantor" means (i) each of Hayes Wheels International-California,
Inc., a Delaware corporation, Hayes Wheels International-Georgia, Inc., a
Delaware corporation, Hayes Wheels International-Indiana, Inc., a Delaware
corporation, Hayes Wheels International-Mexico, Inc., a Delaware corporation,
Hayes Wheels International-Michigan, Inc., a Michigan corporation, Motor Wheel
Corporation, an Ohio corporation and MWC Acquisition Sub, Inc., a Delaware
corporation and (ii) each Restricted Subsidiary of the Company that hereafter
becomes a Guarantor pursuant to Section 10.04, and "Guarantors" means such
entities, collectively.
"Guarantor Senior Indebtedness" means the principal of and premium,
if any, and interest (including, without limitation, interest accruing or that
would have accrued but for the filing of a bankruptcy, reorganization or other
insolvency proceeding whether or not such interest constitutes an allowed claim
in such proceeding) on, and any and all other fees, charges, expense
reimbursement obligations, indemnities and other amounts due pursuant to the
terms of all agreements, documents and instruments providing for, creating,
securing, guaranteeing or evidencing or otherwise entered into in connection
with, (a) Guarantor's direct incurrence of any Indebtedness or its guarantee of
all Indebtedness of the Company, in each case, owed to lenders under or in
respect of the Amended Credit Agreement, (b) all obligations of such Guarantor
with respect to any Interest Rate Agreement, (c) all obligations of
<PAGE> 19
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such Guarantor to reimburse any bank or other person in respect of amounts paid
under letters of credit, acceptances or other similar instruments, (d) all
other Indebtedness of such Guarantor which does not provide that it is to rank
pari passu with or subordinate to the Guarantees and (e) all deferrals,
renewals, extensions, refundings, refinancings and restructurings of, and
amendments, modifications and supplements to, any of the Guarantor Senior
Indebtedness described above. Notwithstanding anything to the contrary in the
foregoing, Guarantor Senior Indebtedness will not include (i) Indebtedness of
such Guarantor to any of its Subsidiaries, (ii) Indebtedness represented by the
Notes, the Existing Notes, the Guarantees and the Guarantees of the Existing
Notes, (iii) any Indebtedness which by the express terms of the agreement or
instrument creating, evidencing or governing the same is junior or subordinate
in right of payment to any item of Guarantor Senior Indebtedness, (iv) any
trade payable arising from the purchase of goods or materials or for services
obtained in the ordinary course of business or (v) Indebtedness incurred in
violation of this Indenture.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Registrar's books.
"incur" means, with respect to any Indebtedness or other obligation
of any Person, to create, issue, incur (by conversion, exchange or otherwise),
assume, guarantee or otherwise become liable in respect of such Indebtedness or
other obligation or the recording, as required pursuant to GAAP or otherwise, of
any such Indebtedness or other obligation on the balance sheet of such Person
(and "incurrence," "incurred," "incurrable," and "incurring" shall have meanings
correlative to the foregoing); provided that a change in GAAP that results in an
obligation of such Person that exists at such time becoming Indebtedness shall
not be deemed an incurrence of such Indebtedness.
"Indebtedness" means (without duplication), with respect to any
Person, any indebtedness at any time outstanding, secured or unsecured,
contingent or otherwise, which is for borrowed money (whether or not the
recourse of the lender is to the whole of the assets of such Person or only to a
portion thereof), or evidenced by bonds, notes, debentures or similar
instruments or representing the balance deferred and unpaid of the purchase
price of any Property (excluding, without limitation, any balances that
constitute accounts payable or trade payables, and other accrued liabilities
arising in the ordinary course of business) if and to the extent any of the
foregoing
<PAGE> 20
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indebtedness would appear as a liability upon a balance sheet of such Person
prepared in accordance with GAAP, and shall also include, to the extent not
otherwise included, (i) any Capitalized Lease Obligations, (ii) obligations of
others secured by a Lien to which the property or assets owned or held by such
Person is subject, whether or not the obligation or obligations secured thereby
shall have been assumed, (iii) guarantees of obligations of other Persons which
would be included within this definition for such other Persons (whether or not
such items would appear upon the balance sheet of the guarantor), (iv) all
obligations for the reimbursement of any obligor on any letter of credit,
banker's acceptance or similar credit transaction, (v) in the case of the
Company, Disqualified Capital Stock and, in the case of any Restricted
Subsidiary, Preferred Stock, (vi) obligations of any such Person under any
Interest Rate Agreement (if and to the extent such Interest Rate Agreement
obligations would appear as a liability upon a balance sheet of such Person
prepared in accordance with GAAP) and (vii) Attributable Indebtedness. The
amount of Indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above and,
with respect to contingent obligations, the maximum liability upon the
occurrence of the contingency giving rise to the obligation, provided (i) that
the amount outstanding at any time of any Indebtedness issued with original
issue discount is the principal amount of such Indebtedness less the remaining
unamortized portion of the original issue discount of such Indebtedness at such
time as determined in conformity with GAAP and (ii) that Indebtedness shall not
include any liability for Federal, state, local or other taxes.
Notwithstanding any other provision of the foregoing definition, any trade
payable arising from the purchase of goods or materials or for services
obtained in the ordinary course of business shall not be deemed to be
"Indebtedness" of the Company or any Restricted Subsidiaries for purposes of
this definition. Furthermore, guarantees of (or obligations with respect to
letters of credit supporting) Indebtedness and Liens securing Indebtedness
otherwise included in the determination of such amount shall not also be
included.
"Indenture" means this Indenture as amended, restated or
supplemented from time to time.
"Initial Global Securities" means the Regulation S Global Security
and the 144A Global Security, each of which contains a Securities Act Legend.
<PAGE> 21
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"Initial Purchasers" means CIBC Wood Gundy Securities Corp. and
Merrill Lynch, Pierce, Fenner & Smith Incorporated.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
promulgated under the Securities Act.
"Interest Payment Date" means the stated maturity of an installment
of interest on the Notes.
"Interest Rate Agreement" means, for any Person, any interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement or
other similar agreement designed to protect the party indicated therein against
fluctuations in interest rates.
"Investments" means, directly or indirectly, any advance, account
receivable, loan or capital contribution to (by means of transfers of property
to others, payments for property or services for the account or use of others or
otherwise), the purchase of any stock, bonds, notes, debentures, partnership or
joint venture interests or other securities of, the acquisition, by purchase or
otherwise, of all or substantially all of the business or assets or stock or
other evidence of beneficial ownership of, any Person. Investments shall
exclude extensions of trade credit on commercially reasonable terms in
accordance with normal trade practices.
"Issue Date" means the date the Notes are first issued by the
Company and authenticated by the Trustee under this Indenture.
"JLL" means Joseph Littlejohn & Levy Fund II, L.P.
"Lemmerz" means Lemmerz Holding GmbH, a limited liability company
organized under the laws of the Federal Republic of Germany.
"Lemmerz Acquisition" means the acquisition by the Company of
Lemmerz pursuant to the purchase agreement dated June 6, 1997 among the Company,
Cromodora Wheels S.p.A., Lemmerz and the shareholders of Lemmerz.
"Lien" means, with respect to any Property of any Person, any
mortgage or deed of trust, pledge, hypothecation, deposit arrangement, security
interest, lien, charge, encumbrance, preference, priority, or other security
agreement or
<PAGE> 22
-14-
preferential arrangement of any kind or nature whatsoever on or with respect to
such Property or assets (including, without limitation, any Capitalized Lease
Obligation, conditional sales, or other title retention agreement having
substantially the same economic effect as any of the foregoing).
"Maturity Date" means July 15, 2007.
"Merrill Lynch" means Merrill Lynch Capital Corporation.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Motor Wheel" means Motor Wheel Corporation, a wholly owned
subsidiary of the Company.
"Net Cash Proceeds" means (a) in the case of any sale of Capital
Stock by the Company, the aggregate net cash proceeds received by the Company,
after payment of expenses, commissions, underwriting discounts and the like
incurred in connection therewith, (b) in the case of any exchange, exercise,
conversion or surrender of outstanding securities of any kind for or into shares
of Capital Stock of the Company which is not Disqualified Capital Stock, the net
cash proceeds received from the sale of such outstanding securities so
exchanged, exercised, converted or surrendered (plus any additional amount
required to be paid in cash by the holder to the Company upon such exchange,
exercise, conversion or surrender, less any and all payments made to the
holders, e.g., on account of fractional shares and less all expenses incurred by
the Company in connection therewith) and (c) in the case of any issuance of any
Indebtedness by the Company or any Restricted Subsidiary, the aggregate net cash
proceeds received by such Person after payment of expenses, commissions,
underwriting discounts and the like incurred in connection therewith.
"Net Investment" means the excess of (i) the aggregate amount of all
Investments in Unrestricted Subsidiaries or joint ventures made by the Company
or any Restricted Subsidiary on or after the Original Issue Date (in the case of
an Investment made other than in cash, the amount shall be the fair market value
of such Investment as determined in good faith by the Board of Directors of the
Company or such Restricted Subsidiary) over (ii) the sum of (A) the aggregate
amount returned in cash on or with respect to such Investments whether through
interest payments, principal payments, dividends or other distributions or
payments and (B) the Net Cash Proceeds received by
<PAGE> 23
-15-
the Company or any Restricted Subsidiary or joint ventures from the disposition
of all or any portion of such Investments (other than to a Subsidiary of the
Company); provided, however, that with respect to all Investments made in any
Unrestricted Subsidiary or joint ventures the sum of clauses (A) and (B) above
with respect to such Investments shall not exceed the aggregate amount of all
such Investments made in such Unrestricted Subsidiary.
"Nomura" means Nomura Holding America, Inc.
"Non-Payment Event of Default" means any event (other than a Payment
Default) the occurrence of which entitles one or more Persons to accelerate the
maturity of any Designated Senior Indebtedness.
"Non-U.S. Person" means a Person who is not a U.S. person, as
defined in Regulation S.
"Notes" means the 9 1/8% Senior Subordinated Notes due 2007 issued
by the Company, including, without limitation, the Private Exchange Notes, if
any, and the Exchange Notes, treated as a single class of securities, as amended
or supplemented from time to time in accordance with the terms hereof, that are
issued pursuant to this Indenture.
"Obligations" means, with respect to any Indebtedness, any
principal, premium, interest, penalties, fees, indemnifications, reimbursements,
damages and other expenses payable under the documentation governing such
Indebtedness.
"Offering" means the offering of the Notes as described in the
Offering Memorandum.
"Offering Memorandum" means the Offering Memorandum dated July 16,
1997 pursuant to which the Notes issued on the Issue Date were offered.
"Officer" means the Chief Executive Officer, the President, any Vice
President, the Chief Financial Officer, the Treasurer or the Secretary of the
Company or a Guarantor, or any other officer designated by the Board of
Directors, as the case may be.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chief Executive Officer, the President or any Vice
President, and the Chief Financial
<PAGE> 24
-16-
Officer or any Treasurer of such Person that shall comply with applicable
provisions of this Indenture.
"Opinion of Counsel" means a written opinion from legal counsel
which counsel is reasonably acceptable to the Trustee.
"Original Issue Date" means July 2, 1996.
"Original Credit Agreement" means the Credit Agreement, dated as of
July 2, 1996, among the Company, CIBC, as administrative agent, Merrill Lynch,
as documentation agent, and the lenders from time to time parties thereto.
"Payment Default" means any default, whether or not any requirement
for the giving of notice, the lapse of time or both, or any other condition to
such default becoming an Event of Default has occurred, in the payment of
principal of (or premium, if any) or interest on or any other amount payable in
connection with Designated Senior Indebtedness.
"Permitted Holders" means (i) JLL or any other fund controlled by
Joseph Littlejohn & Levy, (ii) TSG, (iii) Argosy, (iv) Nomura and (v) Chase.
"Permitted Indebtedness" means:
(i) Indebtedness of the Company or any Domestic Restricted
Subsidiary arising under or in respect of the Amended Credit Agreement in
an aggregate amount (the "Permitted Credit Agreement Amount") not to
exceed (A) $590,500,000 (which gives effect to the concurrent repayment
of amounts outstanding under the Credit Agreement on the Issue Date),
less (B) 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, in each case, after consummation of
the Lemmerz Acquisition;
(ii) Indebtedness under the Notes and the Guarantees;
(iii) Indebtedness not covered by any other clause of this
definition which is outstanding on the Issue Date;
(iv) Indebtedness incurred to finance the working capital
requirements of the Western European operations of the Company's
Restricted Subsidiaries pursuant to commit-
<PAGE> 25
-17-
ments outstanding on the Issue Date in an aggregate amount not to exceed
$10,000,000 (or, to the extent non-U.S. dollar denominated, the U.S.
dollar equivalent thereof);
(v) Indebtedness of Autokola not to exceed $35,000,000 in principal
amount in the aggregate which is incurred after the Issue Date as a
result of it becoming a Subsidiary of the Company;
(vi) Indebtedness of the Company to any Domestic Restricted
Subsidiary which is a Wholly-Owned Subsidiary and Indebtedness of any
Restricted Subsidiary to the Company or another Restricted Subsidiary
provided that in the case of Indebtedness of a Domestic Restricted
Subsidiary such Indebtedness is owed to another Domestic Restricted
Subsidiary;
(vii) Purchase Money Indebtedness and Capitalized Lease Obligations
incurred to acquire property in the ordinary course of business which
Indebtedness and Capitalized Lease Obligations do not in the aggregate
exceed 5% of the Company's consolidated total assets as of the Company's
most recent quarterly balance sheet;
(viii) Interest Rate Agreements;
(ix) additional Indebtedness of the Company and its Restricted
Subsidiaries not to exceed $50,000,000 in aggregate principal amount
outstanding at any time;
(x) Refinancing Indebtedness;
(xi) Indebtedness incurred in accordance with Section 4.11; and
(xii) Indebtedness of the Company or its Subsidiaries which is
denominated in a currency other than U.S. dollars, provided that (a) the
U.S. dollar equivalent thereof on the date of incurrence (together with
the U.S. dollar equivalent on such date of all other Indebtedness
incurred under this clause (xii)) shall not exceed $80,000,000, and (b)
on the last Business Day of each month, the sum of (1) the U.S. dollar
equivalent of all Indebtedness outstanding under this clause (xii), and
(2) the outstanding principal amount of Indebtedness under the Amended
Credit Agreement, including reimbursement obligations in respect of
letters of credit (in each case after giving effect to any currency
hedging arrangements applicable thereto to which the
<PAGE> 26
-18-
Company or a Subsidiary of the Company is a party), shall not exceed the
Permitted Credit Agreement Amount.
"Permitted Investments" means, for any Person, Investments made on
or after the date of this Indenture consisting of:
(i) Investments by the Company, or by a Restricted Subsidiary
thereof, in the Company or a Restricted Subsidiary;
(ii) Temporary Cash Investments;
(iii) Investments by the Company, or by a Restricted Subsidiary
thereof, 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;
(iv) reasonable and customary loans made to employees not to exceed
$1,000,000 in the aggregate at any one time outstanding;
(v) an Investment that is made by the Company or a Restricted
Subsidiary thereof in the form of any stock, bonds, notes, debentures,
partnership or joint venture interests or other securities that are
issued by a third party to the Company or Restricted Subsidiary solely as
partial consideration for the consummation of an Asset Sale;
(vi) Investments in Unrestricted Subsidiaries and joint ventures
permitted under subclause (v) of the second paragraph of Section 4.13;
(vii) Investments received in connection with the bankruptcy or
reorganization of Persons having obligations in favor of the Company or
its Subsidiaries (which obligations were incurred in the ordinary
course), in settlement of such obligations; and
(viii) Investments paid for in Common Stock of the Company.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust,
<PAGE> 27
-19-
unincorporated organization or government (including any agency or political
subdivision thereof).
"Physical Notes" means certificated Notes in registered form in
substantially the form set forth in Exhibit A.
"Preferred Stock" means any Capital Stock of a Person, however
designated, which entitles the holder thereof to a preference with respect to
dividends, distributions or liquidation proceeds of such Person over the holders
of other Capital Stock issued by such Person.
"Private Exchange" has the meaning set forth in the Registration
Rights Agreement.
"Private Exchange Notes" has the meaning set forth in the
Registration Rights Agreement.
"Private Placement Legend" means the legend initially set forth on
the Rule 144A Notes in the form set forth in Exhibit B.
"Property" of any Person means all types of real, personal,
tangible, intangible or mixed property owned by such Person whether or not
included in the most recent consolidated balance sheet of such Person and its
Subsidiaries under GAAP.
"Purchase Agreement" means the Purchase Agreement dated as of July
16, 1997 by and among the Company, the Guarantors and the Initial Purchasers.
"Purchase Money Indebtedness" means any Indebtedness incurred in the
ordinary course of business by a Person to finance the cost (including the cost
of construction) of an item of Property, the principal amount of which
Indebtedness does not exceed the sum of (i) 100% of such cost and (ii)
reasonable fees and expenses of such Person incurred in connection therewith.
"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A promulgated under the Securities Act.
"Redemption Date" when used with respect to any Note to be redeemed
means the date fixed for such redemption pursuant to this Indenture.
<PAGE> 28
-20-
"Refinancing Indebtedness" means Indebtedness that refunds,
refinances or extends any Indebtedness of the Company or its Subsidiaries
outstanding on the Issue Date or other Indebtedness permitted to be incurred by
the Company or its Restricted Subsidiaries pursuant to the terms of this
Indenture, but only to the extent that (i) the Refinancing Indebtedness is
subordinated to the Notes to at least the same extent as the Indebtedness being
refunded, refinanced or extended, if at all, (ii) the Refinancing Indebtedness
is scheduled to mature either (a) no earlier than the Indebtedness being
refunded, refinanced or extended, or (b) after the maturity date of the Notes,
(iii) the portion, if any, of the Refinancing Indebtedness that is scheduled to
mature on or prior to the maturity date of the Notes has a weighted average life
to maturity at the time such Refinancing Indebtedness is incurred that is equal
to or greater than the weighted average life to maturity of the portion of the
Indebtedness being refunded, refinanced or extended that is scheduled to mature
on or prior to the maturity date of the Notes, (iv) such Refinancing
Indebtedness is in an aggregate principal amount that is equal to or less than
the sum of (a) the aggregate principal amount then outstanding under the
Indebtedness being refunded, refinanced or extended, (b) the amount of accrued
and unpaid interest, if any, and any necessary premiums (including the amount of
any premium reasonably determined by the Company or the applicable Restricted
Subsidiary as necessary to accomplish such refunding, refinancing or extension)
on such Indebtedness being refunded, refinanced or extended and (c) the amount
of customary fees, expenses and costs related to the incurrence of such
Refinancing Indebtedness, (v) such Refinancing Indebtedness is incurred by the
same Person that initially incurred the Indebtedness being refunded, refinanced
or extended, except that the Company may incur Refinancing Indebtedness to
refund, refinance or extend Indebtedness of any Wholly-Owned Subsidiary of the
Company; provided, however, that any non-Domestic Restricted Subsidiary may
incur Refinancing Indebtedness to refund, refinance or extend Indebtedness of
the Company arising under or in respect of the Amended Credit Agreement in an
aggregate amount not to exceed $20,000,000 outstanding at any time; and
provided, further, that with respect to such Refinancing Indebtedness referred
to in the previous provision, clauses (ii) and (iii) shall not apply, and (vi)
if such Indebtedness was incurred pursuant to Section 4.11(a) and does not
contain any restriction or limitation on the payment of dividends or the making
of other distributions then the Refinancing Indebtedness shall not contain any
such limitation or restriction.
<PAGE> 29
-21-
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of the Issue Date among the Company, the Guarantors and the
Initial Purchasers, as amended from time to time.
"Regulation S" means Regulation S promulgated under the Securities
Act.
"Responsible Officer" when used with respect to the Trustee, means
any officer within the corporate trust department 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 Note" has the same meaning as "Restricted Security" set
forth in Rule 144(a)(3) promulgated under the Securities Act; provided, that the
Trustee shall be entitled to request and conclusively rely upon an Opinion of
Counsel with respect to whether any Note is a Restricted Note.
"Restricted Payment" means any of the following: (i) the
declaration or payment of any dividend or any other distribution or payment on
Capital Stock of the Company or any Restricted Subsidiary of the Company or any
payment made to the direct or indirect holders (in their capacities as such) of
Capital Stock of the Company or any Restricted Subsidiary of the Company (other
than (x) dividends or distributions payable solely in Capital Stock (other than
Disqualified Capital Stock) or in options, warrants or other rights to purchase
Capital Stock (other than Disqualified Capital Stock), and (y) in the case of
Restricted Subsidiaries of the Company, dividends or distributions payable to
the Company or to a Wholly-Owned Subsidiary of the Company), (ii) the purchase,
redemption or other acquisition or retirement for value of any Capital Stock of
the Company or any of its Restricted Subsidiaries (other than Capital Stock
owned by the Company or a Wholly-Owned Subsidiary of the Company, excluding
Disqualified Capital Stock), (iii) the purchase, defeasance, repurchase,
redemption or other acquisition or retirement for value, prior to any scheduled
maturity, scheduled repayment or scheduled sinking fund payment of, or the
making of any principal payment on, any Indebtedness which is subordinated in
right of payment to the Notes other than subordinated Indebtedness acquired in
anticipation of satisfying a scheduled sinking fund obligation, principal
installment
<PAGE> 30
-22-
or final maturity (in each case due within one year of the date of
acquisition), (iv) the making of any Investment or guarantee of any Investment
in any Person other than a Permitted Investment, (v) any designation of a
Restricted Subsidiary as an Unrestricted Subsidiary on the basis of the Net
Investment by the Company therein and (vi) forgiveness of any Indebtedness of
an Affiliate of the Company to the Company or a Restricted Subsidiary. For
purposes of determining the amount expended for Restricted Payments, cash
distributed or invested shall be valued at the face amount thereof and property
other than cash shall be valued at its fair market value determined in good
faith by the Board of Directors of the Company.
"Restricted Subsidiary" means a Subsidiary of the Company other than
an Unrestricted Subsidiary. The Board of Directors of the Company may designate
any Unrestricted Subsidiary or any Person that is to become a Subsidiary as a
Restricted Subsidiary if immediately after giving effect to such action (and
treating any Acquired Indebtedness as having been incurred at the time of such
action), the Company could have incurred at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) pursuant to Section 4.10.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Sale and Lease-Back Transaction" means any arrangement with any
Person providing for the leasing by the Company or any Restricted Subsidiary of
the Company of any real or tangible personal Property, which Property has been
or is to be sold or transferred by the Company or such Restricted Subsidiary to
such Person in contemplation of such leasing.
"S&P" means Standard & Poor's Corporation and its successors.
"SEC" means the United States Securities and Exchange Commission as
constituted from time to time or any successor performing substantially the same
functions.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means the principal of and premium, if any,
and interest (including, without limitation, in-
<PAGE> 31
-23-
terest accruing or that would have accrued but for the filing of a bankruptcy,
reorganization or other insolvency proceeding whether or not such interest
constitutes an allowed claim in such proceeding) on, and any and all other
fees, charges, expense reimbursement obligations, indemnities and other amounts
due pursuant to the terms of all agreements, documents and instruments
providing for, creating, securing, guaranteeing or evidencing or otherwise
entered into in connection with (a) all obligations, whether outstanding on the
Issue Date or thereafter incurred, of the Company owed to lenders under or in
respect of the Amended Credit Agreement, (b) all obligations of the Company
with respect to any Interest Rate Agreement, (c) all obligations of the Company
to reimburse any bank or other person in respect of amounts paid under letters
of credit, acceptances or other similar instruments, (d) all other Indebtedness
of the Company which does not provide that it is to rank pari passu with or
subordinate to the Notes and (e) all deferrals, renewals, extensions,
refundings, refinancings and restructurings of, and amendments, modifications
and supplements to, any of the Senior Indebtedness described above.
Notwithstanding anything to the contrary in the foregoing, Senior Indebtedness
will not include (i) Indebtedness of the Company to any of its Subsidiaries,
(ii) Indebtedness represented by the Notes, the 11% Notes, the 9 1/8% Notes,
and, in each case, the guarantees thereof, (iii) any Indebtedness which by the
express terms of the agreement or instrument creating, evidencing or governing
the same is junior or subordinate in right of payment to any item of Senior
Indebtedness, (iv) any trade payable arising from the purchase of goods or
materials or for services obtained in the ordinary course of business, or (v)
Indebtedness incurred in violation of this Indenture.
"Subsidiary" of any specified Person means any corporation,
partnership, joint venture, association or other business entity, whether now
existing or hereafter organized or acquired, (i) in the case of a corporation,
of which more than 50% of the total voting power of the Capital Stock entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, officers or trustees thereof is held by such first-named Person or
any of its Subsidiaries; or (ii) in the case of a partnership, joint venture,
association or other business entity, with respect to which such first-named
Person or any of its Subsidiaries has the power to direct or cause the direction
of the management and policies of such entity by contract or otherwise or if in
accordance with GAAP such entity is consolidated with the first-named Person for
financial statement purposes.
<PAGE> 32
-24-
"Temporary Cash Investments" means (i) Investments in marketable,
direct obligations issued or guaranteed by the United States of America, or of
any governmental agency or political subdivision thereof, maturing within 365
days of the date of purchase; (ii) Investments in demand deposits or
certificates of deposit issued by a bank organized under the laws of the United
States of America or any state thereof or the District of Columbia, in each case
having capital, surplus and undivided profits totaling more than $500,000,000
and rated at least A by S&P and A-2 by Moody's, maturing within 365 days of
purchase; (iii) Investments in commercial paper, maturing not more than 180 days
after the date of acquisition, issued by a corporation (other than an Affiliate
of the Company) organized and in existence under the laws of the United States
of America or any foreign country recognized by the United States of America
with a rating at the time as of which any Investment therein is made of "P-1"
(or higher) according to Moody's or "A-1" (or higher) according to S&P; (iv) in
the case of any non-Domestic Restricted Subsidiary, Investments: (a) in direct
obligations of the sovereign nation (or any agency thereof) in which such
non-Domestic Restricted Subsidiary is organized and is conducting business or in
obligations fully and unconditionally guaranteed by such sovereign nation (or
any agency thereof) or (b) of the type and maturity described in clauses (i)
through (iii) above of foreign obligors, which Investments or obligors (of the
parents of such obligors) have ratings described in such clauses or equivalent
ratings from comparable foreign rating agencies; or (v) Investments not
exceeding 365 days in duration in money market funds that invest substantially
all of such funds' assets in the Investments described in the preceding clauses
(i) and (iv).
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Section
Section 77aaa-77bbbb) as in effect on the date of this Indenture (except as
provided in Section 8.03 hereof).
"Trust Officer" means any officer or assistant officer of the
Trustee assigned by the Trustee to administer trust accounts.
"Trustee" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means the
successor.
"TSG" means TSG Capital Fund II, L.P.
"Unrestricted Subsidiary" means (a) any Subsidiary of an
Unrestricted Subsidiary and (b) any Subsidiary of the Com-
<PAGE> 33
-25-
pany which is classified after the Issue Date as an Unrestricted Subsidiary by
a resolution adopted by the Board of Directors of the Company; provided that a
Subsidiary organized or acquired after the Issue Date may be so classified as
an Unrestricted Subsidiary only if such classification is in compliance with
Section 4.13 hereof. The Trustee shall be given prompt written notice by the
Company of each resolution adopted by the Board of Directors of the Company
under this provision, together with a copy of each such resolution adopted.
"U.S. Government Obligations" means direct non-callable obligations
of, or non-callable obligations guaranteed by, the United States of America for
the payment of which obligation or guarantee the full faith and credit of the
United States of America is pledged.
"Western Europe" means, with respect to any jurisdictional matter,
any of the twelve current member states of the European Community and
Switzerland, Norway, Sweden, Finland, Austria and the Czech Republic (and
"Western European" shall have a meaning correlative to the foregoing).
"Wholly-Owned Subsidiary" means any Restricted Subsidiary all of the
outstanding voting securities (other than directors' qualifying shares or
similar requirements of law in respect of non-Domestic Subsidiaries and other
than shares of Lemmerz representing not more than .01% of the voting securities
thereof) of which are owned, directly or indirectly, by the Company.
Section 1.02. Other Definitions.
The definitions of the following terms may be found in the sections
indicated as follows:
<TABLE>
<CAPTION>
Term Defined in Section
- ---- ------------------
<S> <C>
"Acquisition" ......................................... 4.10
"Affiliate Transaction" ............................... 4.16
"Bankruptcy Law" ...................................... 6.01
"Business Day" ........................................ 12.08
"Change of Control Offer".............................. 4.20
"Change of Control Payment Date" ...................... 4.20
"Change of Control Purchase Price" .................... 4.20
"Covenant Defeasance" ................................. 9.03
"Custodian" ........................................... 6.01
"Event of Default" .................................... 6.01
"Excess Proceeds Offer"................................ 4.15
</TABLE>
<PAGE> 34
-26-
<TABLE>
<S> <C>
"Guarantee Payment Blockage Period".......... 10.08
"Guarantor Representative ................... 10.08
"Initial Blockage Period" ................... 11.03
"Initial Guarantee Blockage Period" ......... 10.08
"Legal Defeasance" .......................... 9.02
"Legal Holiday" ............................. 12.08
"Offer Period" .............................. 4.15
"Other Notes" ............................... 2.01
"Paying Agent" .............................. 2.03
"Payment Blockage Period" ................... 11.03
"Purchase Date" ............................. 4.15
"Registrar" ................................. 2.03
"Regulation S Notes ......................... 2.01
"Reinvestment Date" ......................... 4.15
"Representative" ............................ 11.03
"Restricted Global Notes" ................... 2.42
"Rule 144A Notes" ........................... 2.01
Section 1.03. Incorporation by Reference of Trust
Indenture Act.
-----------------------------------
</TABLE>
Whenever this Indenture refers to a provision of the TIA, the
portion of such provision required to be incorporated herein in order for this
Indenture to be qualified under the TIA is incorporated by reference in and made
a part of this Indenture. The following TIA terms used in this Indenture have
the following meanings:
"Commission" means the SEC.
"indenture securities" means the Notes.
"indenture securityholder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor on the indenture securities" means the Company, the
Guarantors or any other obligor on the Notes or the Guarantees.
All other terms used in this Indenture that are defined by the TIA,
defined in the TIA by reference to another statute or defined by SEC rule have
the meanings therein assigned to them.
<PAGE> 35
-27-
Section 1.04. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it herein, whether defined
expressly or by reference;
(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; and
(5) words used herein implying any gender shall apply to every
gender.
ARTICLE 2
THE NOTES
Section 2.01. Amount of Notes and Form and Dating.
The Trustee shall, upon receipt of a Company Request, authenticate
Notes for original issue on the Issue Date in the aggregate principal amount of
$150,000,000. Each such written order shall specify the amount of Notes to be
authenticated and the date on which the Notes are to be authenticated and the
title of the Notes of the series (which shall distinguish the Notes of the
series from Notes of any other series). All Notes issued on the Issue Date
shall be identical in all respects. The aggregate principal amount of Notes
outstanding at any time may not exceed $150,000,000 except as provided in
Section 2.08.
Upon receipt of a Company Request and an Officers' Certificate
certifying that a registration statement relating to an exchange offer specified
in the Registration Rights Agreement is effective and that, if necessary, the
conditions precedent to a Private Exchange thereunder have been met, the Trustee
shall authenticate an additional series of Notes in an aggregate principal
amount not to exceed $150,000,000 for issuance in exchange for the Notes
tendered for exchange pursuant to such exchange offer registered under the
Securities Act and, if necessary, pursuant to a Private Exchange. Exchange
Notes or Private Exchange Notes may have such distinctive series designations
and such changes in the form thereof as are specified in the Company Request.
<PAGE> 36
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The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A which is incorporated in and made part of
this Indenture. The Notes may have notations, legends or endorsements required
by law, rule or usage. The Company may use "CUSIP" numbers in issuing the
Notes. The Company shall approve the form of the Notes.
Without limiting the generality of the foregoing, Notes offered and
sold to Qualified Institutional Buyers in reliance on Rule 144A ("Rule 144A
Notes") shall bear the Private Placement Legend and include the form of
assignment set forth in Exhibit C-1, Notes offered and sold in offshore
transactions in reliance on Regulation S ("Regulation S Notes") shall bear the
Private Placement Legend and include the form of assignment set forth in Exhibit
C-2, and Notes offered and sold to Institutional Accredited Investors in
transactions exempt from registration under the Securities Act not made in
reliance on Rule 144A or Regulation S ("Other Notes") may be represented by the
Restricted Global Note or, if such an investor may not hold an interest in the
Restricted Global Note, a Physical Note in each case bearing the Private
Placement Legend. Each Note shall be dated the date of its authentication.
The terms and provisions contained in the Notes and the Guarantee
shall constitute, and are hereby expressly made, a part of this Indenture and,
to the extent applicable, the Company, the Subsidiary Guarantors and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.
Section 2.02. Execution and Authentication.
The Notes shall be executed on behalf of the Company by two Officers
of the Company or an Officer and an Assistant Secretary of the Company. Such
signature may be either manual or facsimile. The Company's seal shall be
impressed, affixed, imprinted or 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 the Trustee authenticates the Note, the Note shall be valid
nevertheless.
A Note shall not be valid until the Trustee manually signs the
certificate of authentication on the Note. Such signature shall be conclusive
evidence that the Note has been authenticated under this Indenture.
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The Trustee or an authenticating agent shall authenticate Notes for
original issue in the aggregate principal amount of $150,000,000 upon a Company
Request. The aggregate principal amount of Notes outstanding at any time may
not exceed such amount except as provided in Section 2.07 hereof. The Notes
shall be issuable only in registered form without coupons and only in
denominations of $1,000 and integral multiples thereof.
The Trustee may appoint an authenticating agent reasonably
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 right as an Agent to deal with the
Company or an Affiliate.
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"), an office
or agency located in the Borough of Manhattan, City of New York, State of New
York where Notes may be presented for payment ("Paying Agent") and an office or
agency where notices and demands to or upon the Company in respect of the Notes
and this Indenture may be served. The Registrar shall keep a register of the
Notes and of their transfer and exchange. The Company may have one or more
co-registrars and one or more additional paying agents. Neither the Company nor
any Affiliate may act as Paying Agent. The Company may change any Paying Agent,
Registrar or co-registrar without notice to any Noteholder.
The Company shall enter into an appropriate agency agreement with
any Registrar or Paying Agent not a party to this Indenture. The agreement
shall implement the provisions of this Indenture that relate to such Agent. The
Company shall notify the Trustee in writing of the name and address of any such
Agent. If the Company fails to maintain a Registrar or Paying Agent, or agent
for service of notices and demands, or fails to give the foregoing notice, the
Trustee shall act as such. The Company initially appoints the Trustee as
Registrar, Paying Agent and agent for service of notices and demands in
connection with the Notes.
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Section 2.04. Paying Agent To Hold Assets in Trust.
The Company shall require each Paying Agent other than the Trustee
to agree in writing that, subject to Articles 10 and 11, each Paying Agent shall
hold in trust for the benefit of the Holders or the Trustee all assets held by
the Paying Agent for the payment of principal of, or interest on, the Notes
(whether such assets have been distributed to it by the Company or any other
obligor on the Notes), and the Company and the Paying Agent shall notify the
Trustee in writing of any Default by the Company (or any other obligor on the
Notes) in making any such payment. The Company at any time may require a Paying
Agent to distribute all assets held by it to the Trustee and account for any
assets disbursed and the Trustee may at any time during the continuance of any
Payment Default, upon written request to a Paying Agent, require such Paying
Agent to distribute all assets held by it to the Trustee and to account for any
assets distributed. Upon distribution to the Trustee of all assets that shall
have been delivered by the Company to the Paying Agent, the Paying Agent shall
have no further liability for such assets.
Section 2.05. Noteholder 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
Noteholders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Company shall furnish to the Trustee as of each Record
Date and at least seven Business Days before each related 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 Noteholders.
Section 2.06. Transfer and Exchange.
Subject to Sections 2.14 and 2.15, when a Note is presented to the
Registrar with a request to register the transfer thereof, the Registrar shall
register the transfer as requested if the requirements of applicable law are met
and, when Notes are presented to the Registrar with a request to exchange them
for an equal principal amount of Notes of other authorized denominations, the
Registrar shall make the exchange as requested provided that every Note
presented or surrendered for registration of transfer or exchange shall be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Registrar duly exe-
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cuted by the Holder thereof or his attorney duly authorized in writing. To
permit transfers and exchanges, upon surrender of any Note for registration of
transfer at the office or agency maintained pursuant to Section 2.03 hereof,
the Company shall execute and the Trustee shall authenticate Notes (and the
Subsidiary Guarantors shall execute the guarantee thereon) at the Registrar's
written request. Any exchange or transfer shall be without charge, except that
the Company may require payment by the Holder of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation to a transfer
or exchange, but this provision shall not apply to any exchange pursuant to
Sections 2.09, 3.06 or 8.05 hereof. The Trustee shall not be required to
register transfers of Notes or to exchange Notes for a period of 15 days before
selection of any Notes to be redeemed. The Trustee shall not be required to
exchange or register transfers of any Notes called or being called for
redemption in whole or in part, except the unredeemed portion of any Note being
redeemed in part.
Any Holder of the Global Note shall, by acceptance of such Global
Note, agree that transfers of the beneficial interests in such Global Note may
be effected only through a book entry system maintained by the Holder of such
Global Note (or its agent), and that ownership of a beneficial interest in the
Global Note shall be required to be reflected in a book entry.
Each Holder of a Note agrees to indemnify the Company and the
Trustee against any liability that may result from the transfer, exchange or
assignment of such Holder's Note in violation of any provision of this Indenture
and/or applicable United States federal or state securities law.
The Trustee shall have no obligation or duty to monitor, determine
or inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Note (including any transfers between or among Depository Participants or
beneficial owners of interests in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by the terms
of, this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
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Section 2.07. Replacement Notes.
If a mutilated Note is surrendered to the Trustee or if the Holder
of a Note presents evidence to the satisfaction of the Company and the Trustee
that the Note has been lost, destroyed or wrongfully taken, the Company shall
issue and the Trustee shall authenticate a replacement Note (and the Guarantors
shall execute a guarantee thereon) if the Trustee's requirements are met. An
indemnity bond must be supplied by such Holder that is sufficient in the
judgment of the Company and the Trustee to protect the Company, the Trustee or
any Agent from any loss which any of them may suffer if a Note is replaced. The
Company may charge such Holder for its reasonable, out-of-pocket expenses in
replacing a Note, including reasonable fees and expenses of counsel. Every
replacement Note is an additional obligation of the Company.
Section 2.08. Outstanding Notes.
Notes outstanding at any time are all Notes authenticated by the
Trustee except for those cancelled by it, those delivered to it for
cancellation, and those described in this Section 2.08 as not outstanding.
If a Note is replaced pursuant to Section 2.07 (other than a
mutilated Note surrendered for replacement), it ceases to be outstanding until
the Company and the Trustee receive proof satisfactory to each of them that the
replaced Note is held by a bona fide purchaser. A mutilated Note ceases to be
outstanding upon surrender of such Note and replacement thereof pursuant to
Section 2.07.
If a Paying Agent holds on a Redemption Date or Maturity Date money
sufficient to pay the principal of, premium, if any, and accrued interest on
Notes payable on that date and is not prohibited from paying such money to the
Holders thereof pursuant to the terms of this Indenture, then on and after that
date such Notes cease to be outstanding and interest on them ceases to accrue.
Subject to Section 12.06, a Note does not cease to be outstanding
solely because the Company or an Affiliate holds the Note.
Section 2.09. Temporary Notes.
Until definitive Notes are ready for delivery, the Company may
prepare and the Trustee shall, upon receipt of a
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Company Request, authenticate temporary Notes. Temporary Notes shall be
substantially in the form, and shall carry all rights, of definitive Notes but
may have variations that the Company considers appropriate for temporary Notes.
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Notes in exchange for temporary Notes presented to it.
Section 2.10. Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Notes surrendered to them for transfer, exchange or payment. The Trustee,
or at the direction of the Trustee, the Registrar or the Paying Agent, and no
one else, shall cancel and at the written request of the Company, shall dispose
of all Notes surrendered for transfer, exchange, payment or cancellation,
provided, however, that in no event shall the Trustee be required to destroy any
such Notes. If the Company or any Guarantor shall acquire any of the Notes,
such acquisition shall not operate as a redemption or satisfaction of the
Indebtedness represented by such Notes unless and until the same are surrendered
to the Trustee for cancellation or pursuant to this Section 2.10.
Section 2.11. Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it
shall pay the defaulted amounts, plus any interest payable on defaulted amounts
pursuant to Section 4.01 hereof, to the persons who are Noteholders on a
subsequent special record date, which date shall be the fifteenth day next
preceding the date fixed by the Company for the payment of defaulted interest or
the next succeeding Business Day if such date is not a Business Day. At least
15 days before the special record date, the Company shall mail or cause to be
mailed to each Noteholder, with a copy to the Trustee, a notice that states the
special record date, the payment date, and the amount of defaulted interest, and
interest payable on such defaulted interest, if any, to be paid.
Section 2.12. Deposit of Moneys.
Prior to 10:00 a.m., New York City time, on each Interest Payment
Date and on the Maturity Date, the Company shall have deposited with the Paying
Agent in immediately available funds money sufficient to make cash payments, if
any, due on such Interest Payment Date or on the Maturity Date, as the case
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may be, in a timely manner which permits the Trustee to remit payment to the
Holders on such Interest Payment Date or on the Maturity Date, as the case may
be.
Section 2.13. CUSIP Number.
The Company in issuing the Notes may use one or more "CUSIP"
numbers, and if so, the Trustee shall use the CUSIP number(s) in notices of
redemption or exchange as a convenience to Holders, provided that any such
notice may state that no representation is made as to the correctness or
accuracy of the CUSIP number(s) printed in the notice or on the Notes, and that
reliance may be placed only on the other identification numbers printed on the
Notes.
Section 2.14. Book-Entry Provisions for Global
Notes.
(a) Rule 144A Notes and Other Notes which may be held in global
form, other than Regulation S Notes, initially shall be represented by one or
more notes in registered, global form without interest coupons (collectively,
the "Restricted Global Note"). Regulation S Notes initially shall be
represented by one or more notes in registered, global form without interest
coupons (collectively, the "Regulation S Global Note," and, together with the
Restricted Global Note, the "Global Notes"). The Global Notes initially shall
(i) be registered in the name of The Depository Trust Company ("DTC") or the
nominee of DTC, in each case for credit to an account of an Agent Member (as
defined below) (or, in the case of the Regulation S Global Notes, of Morgan
Guaranty Trust Company, as operator of the Euroclear System ("Euroclear") and
Cedel Bank, Societe Anonyme ("CEDEL")), (ii) be delivered to the Trustee as
custodian for DTC and (iii) bear legends as set forth in Exhibit D.
Members of, or direct or indirect participants in, DTC ("Agent
Members") shall have no rights under this Indenture with respect to any Global
Note held by DTC, or the Trustee as its custodian, or under the Global Notes,
and DTC may be treated by the Company, the Trustee and any agent of the Company
or the Trustee as the absolute owner of the Global Note for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
DTC or impair, as between DTC and its Agent Members, the operation of customary
practices governing the exercise of the rights of a Holder of any Note.
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(b) Transfers of Global Notes shall be limited to transfer in
whole, but not in part, to DTC, its successors or their respective nominees.
Interests of beneficial owners in the Global Notes may be transferred or
exchanged for Physical Notes upon receipt by the Trustee of written instructions
from DTC or its nominee on behalf of any beneficial owner and in accordance with
the rules and procedures of DTC and the provisions of Section 2.15. In
addition, a Global Note shall be exchangeable for Physical Notes if (i) DTC (x)
notifies the Company that it is unwilling or unable to continue as depository
for such Global Note and the Company thereupon fails to appoint a successor
depository or (y) has ceased to be a clearing agency registered under the
Exchange Act, (ii) the Company, at its option, notifies the Trustee in writing
that it elects to cause the issuance of such Physical Notes or (iii) there shall
have occurred and be continuing a Default or an Event of Default with respect to
the Notes. In all cases, Physical Notes delivered in exchange for any Global
Note or beneficial interests therein shall be registered in the names, and
issued in any approved denominations, requested by or on behalf of DTC (in
accordance with its customary procedures).
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in any Global Note to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more Physical Notes are to be
issued) reflect on its books and records the date and a decrease in the
principal amount of the Global Note in an amount equal to the principal amount
of the beneficial interest in the Global Note to be transferred, and the Company
shall execute, and the Trustee shall upon receipt of a written order from the
Company authenticate and make available for delivery, one or more Physical Notes
of like tenor and amount.
(d) In connection with the transfer of Global Notes as an entirety
to beneficial owners pursuant to paragraph (b), the Global Notes shall be deemed
to be surrendered to the Trustee for cancellation, and the Company shall
execute, and the Trustee shall authenticate and deliver or make available for
delivery, to each beneficial owner identified by the Depository in writing in
exchange for its beneficial interest in the Global Notes, an equal aggregate
principal amount of Physical Notes of authorized denominations.
(e) Any Physical Note constituting a Restricted Note delivered in
exchange for an interest in a Global Note pursuant to paragraph (b) shall,
except as otherwise provided by paragraphs (a)(i)(x) and (c) of Section 2.15,
bear the Private
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Placement Legend or, in the case of the Regulation S Global Note, the legend
set forth in Exhibit C, in each case, unless the Company determines otherwise
in compliance with applicable law.
(f) On or prior to the 40th-day after the later of the commencement
of the offering of the Notes represented by the Regulation S Global Note and the
issue date of such Notes (such period through and including such 40th day, the
"Restricted Period"), a beneficial interest in a Regulation S Global Note may be
transferred to a Person who takes delivery in the form of an interest in the
corresponding Restricted Global Note only upon receipt by the Trustee of a
written certification from the transferor to the effect that such transfer is
being made (i)(a) to a Person whom the transferor reasonably believes is a
Qualified Institutional Buyer in a transaction meeting the requirements of Rule
144A or (b) pursuant to another exemption from the registration requirements
under the Securities Act which is accompanied by an opinion of counsel regarding
the availability of such exemption and (ii) in accordance with all applicable
securities laws of any state of the United States or any other jurisdiction.
(g) Beneficial interests in the Restricted Global Note may be
transferred to a Person who takes delivery in the form of an interest in the
Regulation S Global Note, whether before or after the expiration of the
Restricted Period, only if the transferor first delivers to the Trustee a
written certificate to the effect that such transfer is being made in accordance
with Rule 903 or 904 of Regulation S or Rule 144 (if available) and that, if
such transfer occurs prior to the expiration of the Restricted Period, the
interest transferred will be held immediately thereafter through Euroclear or
CEDEL.
(h) Any beneficial interest in one of the Global Notes that is
transferred to a Person who takes delivery in the form of an interest in another
Global Note shall, upon transfer, cease to be an interest in such Global Note
and become an interest in such other Global Note and, accordingly, shall
thereafter be subject to all transfer restrictions and other procedures
applicable to beneficial interests in such other Global Note for as long as it
remains such an interest.
(i) The Holder of any Global Note may grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Notes.
<PAGE> 45
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Section 2.15. Special Transfer Provisions.
(a) Transfers to Non-QIB Institutional Accredited Investors and
Non-U.S. Persons. The following provisions shall apply with respect to the
registration of any proposed transfer of a Note constituting a Restricted Note
to any Institutional Accredited Investor which is not a QIB or to any Non-U.S.
Person:
(i) the Registrar shall register the transfer of any Note
constituting a Restricted Note, whether or not such Note bears the
Private Placement Legend, if (x) the requested transfer is after the
Issue Date plus two years or such other date as such Note shall be freely
transferable under Rule 144 as certified in an Officers' Certificate or
(y)(1) in the case of a transfer to an Institutional Accredited Investor
which is not a QIB (excluding Non-U.S. Persons), the proposed transferee
has delivered to the Registrar a certificate substantially in the form of
Exhibit E hereto or (2) in the case of a transfer to a Non-U.S. Person
(including a QIB), the proposed transferor has delivered to the Registrar
a certificate substantially in the form of Exhibit F hereto; provided
that in the case of a transfer of a Note bearing the Private Placement
Legend for a Note not bearing the Private Placement Legend, the Registrar
has received an Officers' Certificate authorizing such transfer; and
(ii) if the proposed transferor is an Agent Member holding a
beneficial interest in a Global Note, upon receipt by the Registrar of
(x) the certificate, if any, required by paragraph (i) above and (y)
instructions given in accordance with the Depository's and the
Registrar's procedures,
whereupon the Registrar shall reflect on its books and records the date and (if
the transfer does not involve a transfer of outstanding Physical Notes) a
decrease or increase, as the case may be, in the principal amount of a Global
Note in an amount equal to the principal amount of the beneficial interest in a
Global Note to be transferred.
(b) Transfers to QIBs. The following provisions shall apply
with respect to the registration of any proposed registration of transfer of a
Note constituting a Restricted Note to a QIB (excluding transfers to Non-U.S.
Persons):
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(i) the Registrar shall register the transfer if such transfer is
being made by a proposed transferor who has checked the box provided for
on such Holder's Note stating, or has otherwise advised the Company and
the Registrar in writing, that the sale has been made in compliance with
the provisions of Rule 144A to a transferee who has signed the
certification provided for on such Holder's Note stating, or has
otherwise advised the Company and the Registrar in writing, that it is
purchasing the Note for its own account or an account with respect to
which it exercises sole investment discretion and that it and any such
account is a QIB within the meaning of Rule 144A, and is aware that the
sale to it is being made in reliance on Rule 144A and acknowledges that
it has received such information regarding the Company as it has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon its
foregoing representations in order to claim the exemption from
registration provided by Rule 144A; and
(ii) if the proposed transferee is an Agent Member, and the Notes to
be transferred consist of Physical Notes which after transfer are to be
evidenced by an interest in the Global Note, upon receipt by the
Registrar of instructions given in accordance with the Depository's and
the Registrar's procedures, the Registrar shall reflect on its books and
records the date and an increase in the principal amount of the Global
Note in an amount equal to the principal amount of the Physical Notes to
be transferred, and the Trustee shall cancel the Physical Notes so
transferred.
(c) Private Placement Legend. Upon the registration of
transfer, exchange or replacement of Notes not bearing the Private Placement
Legend, the Registrar shall deliver Notes that do not bear the Private Placement
Legend. Upon the registration of transfer, exchange or replacement of Notes
bearing the Private Placement Legend, the Registrar shall deliver only Notes
that bear the Private Placement Legend unless (i) it has received the Officers'
Certificate required by paragraph (a)(i)(y) of this Section 2.15, (ii) there is
delivered to the Registrar an Opinion of Counsel reasonably satisfactory to the
Company and the Trustee to the effect that neither such legend nor the related
restrictions on transfer are required in order to maintain compliance with the
provisions of the Securities Act or (iii) such Note has been sold pursuant to an
effective registration statement under the Securities Act and the Regis-
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trar has received an Officers' Certificate from the Company to such effect.
(d) General. By its acceptance of any Note bearing the Private
Placement Legend, each Holder of such Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private Placement
Legend and agrees that it will transfer such Note only as provided in this
Indenture.
The Registrar shall retain for a period of two years copies of all
letters, notices and other written communications received pursuant to Section
2.14 or this Section 2.15. The Company shall have the right to inspect and make
copies of all such letters, notices or other written communications at any
reasonable time upon the giving of reasonable notice to the Registrar.
Section 2.16. Computation of Interest.
Interest on the Notes shall be computed on the basis of a 360-day
year of twelve 30-day months.
ARTICLE 3
REDEMPTION
Section 3.01. Notices to Trustee.
If the Company elects to redeem Notes pursuant to Paragraph 5 of the
Notes, it shall notify the Trustee of the Redemption Date and the principal
amount of Notes to be redeemed at least 30 days (unless a shorter notice shall
be satisfactory to the Trustee) but not more than 60 days before the Redemption
Date. Any such notice may be cancelled at any time prior to notice of such
redemption being mailed to any Holder and shall thereby be void and of no
effect.
Section 3.02. Selection by Trustee of Notes To Be Redeemed.
If fewer than all of the Notes are to be redeemed, the Trustee shall
select the Notes to be redeemed pro rata, by lot or by any other method that the
Trustee considers fair and appropriate and, if such Notes are listed on any
securities exchange, by a method that complies with the requirements of such
exchange.
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The Trustee shall make the selection from the Notes outstanding and
not previously called for redemption and 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 in denominations of $1,000 may be redeemed only in whole. The Trustee may
select for redemption portions (equal to $1,000 or integral multiples thereof)
of the principal amount of Notes that have denominations larger than $1,000.
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.
At least 30 days, and no more than 60 days, before a Redemption
Date, the Company shall mail, or cause to be mailed, a notice of redemption by
first-class mail to each Holder of Notes to be redeemed at his or her last
address as the same appears on the registry books maintained by the Registrar
pursuant to Section 2.03 hereof.
The notice shall identify the Notes to be redeemed (including the
CUSIP number(s) thereof) and shall state:
(1) the Redemption Date;
(2) the redemption price;
(3) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
Redemption Date and upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion will be issued;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(6) that, unless (a) the Company defaults in making the redemption
payment or (b) such redemption payment is prohibited pursuant to Article
10 or 11 hereof or otherwise, interest on the Notes called for redemption
ceases to accrue on and after the Redemption Date, and the only remaining
right of the Holders of such Notes is to receive payment of the
redemption price upon surrender to the Paying Agent of the Notes
redeemed;
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(7) the paragraph of the Notes pursuant to which the Notes called
for redemption are being redeemed; and
(8) if fewer than all the Notes are to be redeemed, the
identification of the particular Notes (or portion thereof) to be
redeemed, as well as the aggregate principal amount of Notes to be
redeemed and the aggregate principal amount of Notes to be outstanding
after such partial redemption.
At the Company's written request delivered at least 45 days prior to
the Redemption Date, the Trustee shall give the notice of redemption in the
Company's name and at the Company's sole expense; provided, however, that the
Company shall have delivered to the Trustee, at least 30 days prior to the
Redemption Date, a Company Request requesting that the Trustee give such notice
and setting forth the information to be stated in such notice as provided in the
preceding paragraph.
Section 3.04. Effect of Notice of Redemption.
Once the notice of redemption described in Section 3.03 is mailed,
Notes called for redemption become due and payable on the Redemption Date and at
the redemption price, plus interest, if any, accrued to the Redemption Date.
Upon surrender to the Trustee or Paying Agent, such Notes shall be paid at the
redemption price, plus accrued interest, if any, to the Redemption Date unless
prohibited by Article 10 or 11, provided that if the Redemption Date is after a
regular interest payment record date and on or prior to the Interest Payment
Date, the accrued interest shall be payable to the Holder of the redeemed Notes
registered on the relevant record date.
Section 3.05. Deposit of Redemption Price.
On or prior to 10:00 A.M., New York City time, on each Redemption
Date, the Company shall deposit with the Paying Agent in immediately available
funds money sufficient to pay the redemption price of and accrued interest, if
any, on all Notes to be redeemed on that date other than Notes or portions
thereof called for redemption on that date which have been delivered by the
Company to the Trustee for cancellation.
On and after any Redemption Date, if money sufficient to pay the
redemption price of and accrued interest on Notes called for redemption shall
have been made available in accordance with the preceding paragraph, the Notes
called for redemption will cease to accrue interest and the only right of
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the Holders of such Notes will be to receive payment of the redemption price of
and, subject to the first proviso in Section 3.04, accrued and unpaid interest
on such Notes to the Redemption Date. If any Note called for redemption shall
not be so paid, interest will be paid, from the Redemption Date until such
redemption payment is made, on the unpaid principal of the Note and any
interest not paid on such unpaid principal, in each case, at the rate and in
the manner provided in the Notes.
Section 3.06. Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, upon the
Company's written request, the Trustee shall authenticate for a Holder, at the
expense of the Company, a new Note equal in principal amount to the unredeemed
portion of the Note surrendered.
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes.
The Company shall pay the principal of and interest on the Notes on
the dates and in the manner provided in the Notes and this Indenture. An
installment of principal or interest shall be considered paid on the date it is
due if the Trustee or Paying Agent holds, as of 10:00 A.M., New York City time
on that date money designated for and sufficient to pay such installment and is
not prohibited from paying such money to the Holders pursuant to the terms of
this Indenture.
The Company shall pay interest on overdue principal, and overdue
interest, to the extent lawful, at the rate specified in the Notes.
Section 4.02. SEC Reports.
The Company will deliver to the Trustee within 15 days after the
filing of the same with the SEC, copies of the quarterly and annual reports and
of the information documents and other reports, if any, which the Company is
required to file with the SEC pursuant to Section 13 or 15(d) of the Securities
Exchange Act. The Company will also comply with the other provisions of TIA
Section 314(a).
Notwithstanding that the Company may not be subject to the reporting
requirements of Section 13 or 15(d) of the Ex-
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change Act, the Company will file with the SEC, to the extent permitted, and
provide the Trustee and Holders of Notes with such quarterly and annual reports
and such information, documents and other reports specified in Section 13 and
15(d) of the Exchange Act. In such event, the Company shall also, upon
request, provide to any Holder of Notes or any prospective transferee of any
such Holder any information concerning the Company (including financial
statements) necessary in order to permit such Holder to sell or transfer Notes
in compliance with Rule 144A under the Securities Act; provided, however, that
the Company shall not be required to furnish such information in connection
with any request made on or after the date which is two years from the later of
(i) the date such Note (or any predecessor Note) was acquired from the Company
or (ii) the date such Note (or any predecessor Note) was last acquired from an
"affiliate" of the Company within the meaning of Rule 144 under the Securities
Act.
Delivery of such reports, information and documents to the Trustee
is for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Issuer's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
Section 4.03. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead (as a defense or otherwise)
or in any manner whatsoever claim or take the benefit or advantage of, any stay
or extension law or any usury law or other law which would prohibit or forgive
the Company from paying all or any portion of the principal of, premium, if any,
and/or interest on the Notes as contemplated herein, wherever enacted, now or at
any time hereafter in force, or which may affect the covenants or the
performance of this Indenture; and (to the extent that it may lawfully do so)
the Company hereby expressly waives all benefit or advantage of any such law,
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
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Section 4.04. Compliance Certificate.
(a) The Company shall deliver to the Trustee, within 100 days after
the end of each fiscal year and on or before 50 days after the end of the first,
second and third quarters of each fiscal year, an Officers' Certificate which
complies with TIA Section 314(a)(4) stating that a review of the activities of
the Company and its Subsidiaries during such fiscal year or fiscal quarter, as
the case may be, has been made under the supervision of the signing Officers
with a view to determining whether each 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
each 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 hereof (or, if a
Default or Event of Default shall have occurred, describing all or such Defaults
or Events of Default of which he or she may have knowledge and what action each
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 each is taking or proposes to take with respect thereto.
(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 4.02 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 which would lead them to believe that the Company has violated
any provisions of this Article 4 or Article 5 hereof of this Indenture 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 for any failure to obtain knowledge of any such violation.
(c) (i) If any Default or Event of Default has occurred and is
continuing or (ii) if any Holder seeks to exercise any remedy hereunder with
respect to a claimed Default under this Indenture or the Notes, the Company
shall deliver to the Trustee an Officers' Certificate specifying such event, no-
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tice or other action within five Business Days of its becoming aware of such
occurrence.
Section 4.05. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (i) all taxes, assessments
and governmental charges (including withholding taxes and any penalties,
interest and additions to taxes) levied or imposed upon it or any of its
Subsidiaries or properties of it or any of its Subsidiaries and (ii) all lawful
claims for labor, materials and supplies that, if unpaid, might by law become a
Lien upon the property of it or any of its Subsidiaries; provided, however, that
the Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim if the amount,
applicability or validity thereof is being contested in good faith by
appropriate proceedings and an adequate reserve has been established therefor to
the extent required by GAAP.
Section 4.06. Maintenance of Properties and Insurance.
(a) The Company shall cause all properties used or useful to the
conduct of its business or the business of any of its Subsidiaries to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and shall cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in its
judgment may be necessary, so that the business carried on in connection
therewith may be properly and advantageously conducted at all times unless the
failure to so maintain such properties (together with all other such failures)
would not have a material adverse effect on the financial condition or results
of operations of the Company and its Subsidiaries, taken as a whole; provided,
however, that nothing in this Section 4.06 shall prevent the Company or any
Subsidiary from discontinuing the operation or maintenance of any of such
properties, or disposing of any of them, if such discontinuance or disposal is
in the good faith judgment of the Board of Directors of the Company or the
Subsidiary concerned, as the case may be, desirable in the conduct of the
business of the Company or such Subsidiary, as the case may be, and is not
disadvantageous in any material respect to the Holders.
(b) The Company shall provide or cause to be provided, for itself
and each of its Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of
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the kinds that, in the reasonable, good faith opinion of the Company are
adequate and appropriate for the conduct of the business of the Company and
such Subsidiaries in a prudent manner, with reputable insurers or with the
government of the United States of America or an agency or instrumentality
thereof, in such amounts, with such deductibles, and by such methods as shall
be customary, in the good faith judgment of the Company, for corporations
similarly situated in the industry, unless the failure to provide such
insurance (together with all other such failures) would not have a material
adverse effect on the financial condition or results of operations of the
Company and its Subsidiaries, taken as a whole.
Section 4.07. Compliance with Laws.
The Company shall, and shall cause each of its Subsidiaries to,
comply with all applicable statutes, rules, regulations, orders and restrictions
of the United States of America, all states and municipalities thereof, and of
any governmental department, commission, board, regulatory authority, bureau,
agency and instrumentality of the foregoing, in respect of the conduct of its
businesses and the ownership of its properties, except for such noncompliances
as would not in the aggregate have a material adverse effect on the business or
financial condition of the Company and its Subsidiaries, taken as a whole.
Section 4.08. 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
Restricted Subsidiary, in accordance with the respective organizational
documents (as the same may be amended from time to time) of each Restricted
Subsidiary and the rights (charter and statutory), licenses and franchises of
the Company and its Restricted 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 Restricted 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
Restricted Subsidiaries, taken as a whole, and that the loss thereof is not
adverse in any material respect to the Holders.
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Section 4.09. Maintenance of Office or Agency.
The Company shall maintain an office or agency where Notes may be
surrendered for registration of transfer or exchange or for presentation for
payment and where notices and demands to or upon the Company in respect of the
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 address of the Trustee as set forth in Section 12.02.
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. The
Company shall give prompt written notice to the Trustee of such designation or
rescission and of any change in the location of any such other office or agency.
The Company hereby initially designates the Corporate Trust Office
of the Trustee set forth in Section 12.02 as such office of the Company.
Section 4.10. Limitation on Additional Indebtedness.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary of the Company to, directly or indirectly, incur any Indebtedness
(including Acquired Indebtedness) other than Permitted Indebtedness.
(b) Notwithstanding the foregoing, the Company and its Restricted
Subsidiaries may incur Indebtedness (including Acquired Indebtedness), if (i)
after giving effect to the incurrence of such Indebtedness and the receipt and
application of the proceeds thereof, 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 in accordance with the further provisions of this clause (b)) is
greater than 2.0 to 1 if the Indebtedness is incurred prior to July 15, 1999 and
2.25 to 1 if the Indebtedness is incurred thereafter 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 In-
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debtedness. For purposes of computing the Fixed Charge Coverage Ratio, (A) if
the Indebtedness which is the subject of a determination under this provision
is Acquired Indebtedness, or Indebtedness incurred in connection with the
simultaneous acquisition (by way of merger, consolidation or otherwise) of any
Person, business, property or assets (an "Acquisition"), then such ratio shall
be determined by giving effect to (on a pro forma basis, as if the transaction
had occurred at the beginning of the four-quarter period used to make such
calculation) to both the incurrence or assumption of such Acquired Indebtedness
or such other Indebtedness and the inclusion in the Company's EBITDA of the
EBITDA of the acquired Person, business, property or assets, (B) if any
Indebtedness outstanding or to be incurred (x) bears a floating rate of
interest, the interest expense on such Indebtedness shall be calculated as if
the rate in effect on the date of determination had been the applicable rate
for the entire period (taking into account on a pro forma basis any Interest
Rate Agreement applicable to such Indebtedness if such Interest Rate Agreement
has a remaining term as at the date of determination in excess of 12 months),
(y) bears, at the option of the Company or a Restricted Subsidiary, a fixed or
floating rate of interest, the interest expense on such Indebtedness shall be
computed by applying, at the option of the Company or such Restricted
Subsidiary, either a fixed or floating rate and (z) was incurred under a
revolving credit facility, the interest expense on such Indebtedness shall be
computed based upon the average daily balance of such Indebtedness during the
applicable period, (C) for any quarter prior to July 2, 1996 included in the
calculation of such ratio, such calculation shall be made on a pro forma basis,
giving effect to the acquisition by the Company of Motor Wheel, the issuance of
the Notes, the incurrence of Indebtedness under the Original Credit Agreement
and the use of the net proceeds therefrom as if the same had occurred at the
beginning of the four-quarter period used to make such calculation, (D) for any
quarter included in the calculation of such ratio prior to the date that any
Asset Sale was consummated, or that any Indebtedness was incurred, or that any
Acquisition was effected, by the Company or any of its Subsidiaries, such
calculation shall be made on a pro forma basis, giving effect to each Asset
Sale, incurrence of Indebtedness or Acquisition, as the case may be, and the
use of any proceeds therefrom, as if the same had occurred at the beginning of
the four quarter period used to make such calculation and (E) the Fixed Charge
Coverage Ratio shall not take into account Permitted Indebtedness that is
incurred at the same time as Indebtedness under this paragraph.
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Section 4.11. Limitation on Foreign Indebtedness.
(a) The Company shall not permit any Restricted Subsidiary of the
Company which is not a Guarantor to, directly or indirectly, incur any
Indebtedness (including Acquired Indebtedness) other than Permitted Indebtedness
set forth in clauses (i) through (x) and (xii) of the definition thereof unless
(i) the Indebtedness is incurred, denominated and payable in the local
currencies of the jurisdictions of the operations of the Restricted Subsidiary
incurring such Indebtedness or of the business or the location of assets being
acquired with the proceeds of such Indebtedness; provided, however, that any
Indebtedness permitted to be incurred in a Western European currency pursuant to
this clause (i) may be incurred in any Western European currency; provided,
further, that any Restricted Subsidiary whose operations are located in Mexico
can also incur Indebtedness denominated and payable in U.S. dollars, (ii) 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 ratio of Foreign EBITDA to Foreign Interest Expense
(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
3.0 to 1 and (II) the ratio of the Company's Adjusted EBITDA to Consolidated
Fixed Charges (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 if the Indebtedness is incurred prior to
July 15, 1999 and 2.25 to 1 if the Indebtedness is incurred thereafter 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 if the Indebtedness is incurred prior to July 15, 1999 and 2.25 to 1 if
the Indebtedness is incurred thereafter, and (iii) 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.
(b) In the event that any Indebtedness incurred pursuant to clause
(ii)(B) of the foregoing paragraph (a) 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
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to so amend, modify or supplement such Indebtedness unless such Indebtedness
could be incurred pursuant to the terms of clause (ii)(A) of the foregoing
paragraph (a).
(c) All calculations required under paragraphs (a) and (b) hereof
shall be made in a manner consistent with the calculations required under
paragraph (b) of Section 4.10.
Section 4.12. Limitation on Common Stock of
Subsidiaries.
The Company shall not (i) sell, pledge, hypothecate or otherwise
convey or dispose of any Common Stock of a Restricted Subsidiary (other than
under or in respect of the Amended Credit Agreement or under the terms of any
Designated Senior Indebtedness and other than pledges of the Capital Stock of
Restricted Subsidiaries that are not Guarantors securing Indebtedness of such
Restricted Subsidiaries that are not Guarantors) or (ii) permit any of its
Subsidiaries to issue any Common Stock, other than to the Company or a
Wholly-Owned Subsidiary of the Company. The foregoing restrictions shall not
apply to an Asset Sale made in compliance with Section 4.15.
Section 4.13. Limitation on Restricted Payments.
The Company shall not make, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, make, any Restricted
Payment, unless:
(a) no Default or Event of Default shall have occurred and be
continuing at the time of or immediately after giving effect to such
Restricted Payment;
(b) immediately after giving pro forma effect to such Restricted
Payment, the Company could incur $1.00 of additional Indebtedness (other
than Permitted Indebtedness) under Section 4.10; and
(c) immediately after giving effect to such Restricted Payment, the
aggregate of all Restricted Payments declared or made after July 2, 1996
does not exceed the sum of (1) $5,000,000, plus (2) 50% of the Company's
Consolidated Net Income (or in the event that such Consolidated Net
Income shall be a deficit, minus 100% of such deficit) after July 2,
1996, plus (3) 100% of the aggregate Net Cash Proceeds from the issue or
sale, after July 2, 1996, of Capital Stock (other than Disqualified
Capital Stock or Capital Stock of the Company issued to any Sub-
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sidiary of the Company) of the Company or any Indebtedness or other
securities of the Company convertible into or exercisable or exchangeable
for Capital Stock (other than Disqualified Capital Stock) of the Company
which has been so converted or exercised or exchanged, as the case may
be. For purposes of determining under this clause (c) the amount
expended for Restricted Payments, cash distributed shall be valued at the
face amount thereof and property other than cash shall be valued at its
fair market value.
The provisions of this Section 4.13 shall not prohibit (i) the
payment of any distribution within 60 days after the date of declaration
thereof, if at such date of declaration such payment would comply with
the provisions of this Indenture, (ii) the retirement of any shares of
Capital Stock of the Company or Indebtedness which is subordinated in
right of payment to the Notes by conversion into, or by or in exchange
for, shares of Capital Stock (other than Disqualified Capital Stock), or
out of, the Net Cash Proceeds of the substantially concurrent sale (other
than to a Subsidiary of the Company) of other shares of Capital Stock of
the Company (other than Disqualified Capital Stock), (iii) the
redemption, repayment or retirement of Indebtedness of the Company
subordinated in right of payment to the Notes in exchange for, by
conversion into, or out of the Net Cash Proceeds of, a substantially
concurrent sale or incurrence of Indebtedness (other than any
Indebtedness owed to a Subsidiary) of the Company that is contractually
subordinated in right of payment to the Notes to at least the same extent
as the Indebtedness being redeemed, repaid or retired, (iv) the
retirement of any shares of Disqualified Capital Stock by conversion
into, or by exchange for, shares of Disqualified Capital Stock, or out of
the Net Cash Proceeds of the substantially concurrent issuance or sale
(other than to a Subsidiary of the Company) of other shares of
Disqualified Capital Stock, or (v) the making of Investments in
Unrestricted Subsidiaries and joint ventures, provided that the Net
Investment therein made since July 2, 1996 shall not exceed an aggregate
of $25,000,000 and (vi) the making of Investments funded with the
transfer of excess fixed assets no longer necessary in the conduct of the
business of the Company and its Subsidiaries in an aggregate amount not
to exceed $15,000,000; provided, however, that in calculating the
aggregate amount of Restricted Payments made subsequent to July 2, 1996,
the amount of Net Investments made pursuant to clauses (v) and (vi) shall
be included in the calculation.
Not later than the date of making any Restricted Payment, the
Company shall deliver to the Trustee an Officers'
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Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by this Section 4.13 were
computed, which calculations may be based upon the Company's latest available
financial statements, and that no Default or Event of Default exists and is
continuing and no Default or Event of Default will occur immediately after
giving effect to any Restricted Payments.
Section 4.14. Limitation on Other Senior
Subordinated Debt.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, incur, contingently or otherwise, any
Indebtedness (other than the Notes and the Guarantees, as the case may be) that
is both (i) subordinate in right of payment to any Senior Indebtedness of the
Company or its Restricted Subsidiaries, as the case may be, and (ii) senior in
right of payment to the Notes and the Guarantees, as the case may be. For
purposes of this Section 4.14, Indebtedness is deemed to be senior in right of
payment to the Notes and the Guarantees, as the case may be, if it is not
explicitly subordinate in right of payment to Senior Indebtedness at least to
the same extent as the Notes and the Guarantees, as the case may be, are
subordinate to Senior Indebtedness.
Section 4.15. Limitation on Certain Asset Sales.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, consummate an Asset Sale unless (i) the Company or
its Restricted Subsidiaries, as the case may be, receives consideration at the
time of such sale or other disposition at least equal to the fair market value
thereof (as determined in good faith by the Company's Board of Directors, and
evidenced by a Board Resolution); (ii) not less than 75% of the consideration
received by the Company or its Subsidiaries, as the case may be, is in the form
of cash or Temporary Cash Investments other than in the case where the Company
or a Restricted Subsidiary is exchanging assets held by the Company or such
Restricted Subsidiary for assets held by another Person; provided that any
Investment received in such exchange would be permitted under clause (B) below;
and (iii) the Asset Sale Proceeds received by the Company or such Restricted
Subsidiary are applied (A) first, to the extent the Company elects, or is
required, to prepay, repay or purchase any then existing Senior Indebtedness of
the Company or any Restricted Subsidiary within 180 days following the receipt
of the Asset Sale Proceeds from any Asset Sale, provided that any such repayment
shall result in a permanent reduction of the
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commitments, if any, thereunder in an amount equal to the principal amount so
repaid; (B) second, to repurchase the 11% Notes within 270 days following the
receipt of the Asset Sale Proceeds from any Asset Sale, tendered pursuant to
the offer to repurchase required under the terms of the 11% Notes Indenture;
(C) third, to repurchase 9 1/8% Notes within 270 days following the receipt of
the Asset Sale Proceeds from any Asset Sale, tendered pursuant to the offer to
repurchase required under the terms of the 9 1/8% Indenture; (D) fourth, to the
extent of the balance of Asset Sale Proceeds after application as described in
clauses (A) and (B) above, to the extent the Company elects, to an investment
in assets used or useful in businesses similar or reasonably related to the
business of the Company or Restricted Subsidiary as conducted on the Issue Date
(either directly or indirectly through the purchase of Capital Stock or other
securities of a Person holding such assets), provided that such investment
occurs or the Company or a Restricted Subsidiary enters into contractual
commitments to make such investment, subject only to customary conditions
(other than the obtaining of financing), on or prior to the 181st day following
receipt of such Asset Sale Proceeds (the "Reinvestment Date") and Asset Sale
Proceeds contractually committed are so applied within 270 days following the
receipt of such Asset Sale Proceeds; and (E) fifth, if on the Reinvestment Date
with respect to any Asset Sale, the Available Asset Sale Proceeds exceed
$10,000,000, the Company shall apply an amount equal to such Available Asset
Sale Proceeds to an offer to repurchase the Notes, at a purchase price in cash
equal to 100% of the principal amount thereof plus accrued and unpaid interest,
if any, to the date of repurchase (an "Excess Proceeds Offer"). If an Excess
Proceeds Offer is not fully subscribed, the Company may retain the portion of
the Available Asset Sale Proceeds not required to repurchase Notes.
(b) If the Company is required to make an Excess Proceeds Offer, the
Company shall mail, within 30 days following the Reinvestment Date, a notice to
the Holders with a copy to the Trustee which shall include, among other things,
the instructions, determined by the Company, that each Holder must follow in
order to have such Notes repurchased and the calculations used in determining
the amount of Available Asset Sale Proceeds to be applied to the repurchase of
such Notes. The notice, which shall govern the terms of the Excess Proceeds
Offer, shall also state:
(1) that the Excess Proceeds Offer is being made pursuant to this
Section 4.15 and that the Excess Proceeds Offer shall remain open for a
period of 20 Business Days
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following its commencement or such longer period as may be required by
law (the "Offer Period");
(2) that such Holders have the right to require the Company to apply
the Available Asset Sale Proceeds to repurchase such Notes at a purchase
price in cash equal to 100% of the principal amount thereof plus accrued
and unpaid interest, if any, to the date of purchase;
(3) the purchase price and the purchase date (the "Purchase Date")
which shall be no earlier than 30 days and not later than 60 days from
the date such notice is mailed;
(4) that any Note not tendered or accepted for payment will continue
to accrue interest;
(5) that any Note accepted for payment pursuant to the Excess
Proceeds Offer shall cease to accrue interest on and after the Purchase
Date;
(6) that Holders electing to have a Note purchased pursuant to any
Excess Proceeds Offer will be required to surrender the Note, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Note completed, to the Company, a depositary, if appointed by the
Company, or a Paying Agent at the address specified in the notice at
least three Business Days before the Purchase Date;
(7) that Holders will be entitled to withdraw their election if the
Company, depositary or Paying Agent, as the case may be, receives, not
later than the expiration of the Offer Period, a 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 the Note purchased;
(8) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Available Asset Sale Proceeds, 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
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(9) that Holders whose Notes were purchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered.
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, Notes
or portions thereof tendered pursuant to the Excess Proceeds Offer, deposit with
the Paying Agent U.S. legal tender sufficient to pay the purchase price plus
accrued interest, if any, on the Notes to be purchased and 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 4.15. The Paying Agent shall promptly (but in any case not later than
three days after the Purchase Date) mail or deliver to each tendering Holder an
amount equal to the purchase price of the Note tendered by such Holder and
accepted by the Company for purchase, and the Company shall promptly issue a new
Note, and the Trustee, upon the receipt of a written request from the Company,
shall authenticate and mail or make available for delivery such new Note to such
Holder equal in principal amount 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 will publicly announce the
results of the Excess Proceeds Offer on the Purchase Date. If an Excess
Proceeds Offer is not fully subscribed, the Company may retain that portion of
the Available Asset Sale Proceeds not required to repurchase Notes.
Section 4.16. Limitation on Transactions with
Affiliates.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, enter into or suffer to
exist any transaction or series of related transactions (including, without
limitation, the sale, purchase, exchange or lease of assets, property or
services) with any Affiliate (including entities in which the Company or any of
its Restricted Subsidiaries own a minority interest) or holder of 10% or more of
the Company's Common Stock (an "Affiliate Transaction") or extend, renew, waive
or otherwise modify the terms of any Affiliate Transaction entered into prior to
the Issue Date unless (i) such Affiliate Transaction is between or among the
Company and/or its Wholly-Owned Subsidiaries; or (ii) the terms of such
Affiliate Transaction are fair and reasonable to the Company or such Restricted
Subsidiary, as the case may be, and the terms of such Affiliate Transaction are
at least as favorable as the terms which could be obtained
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by the Company or such Restricted Subsidiary, as the case may be, in a
comparable transaction made on an arm's-length basis between unaffiliated
parties. In any Affiliate Transaction involving an amount or having a value in
excess of $2,000,000 which is not permitted under clause (i) above, the Company
must obtain a resolution of the Board of Directors certifying that such
Affiliate Transaction complies with clause (ii) above. In transactions with a
value in excess of $10,000,000 which are not permitted under clause (i) above,
the Company or such Restricted Subsidiary must obtain a written opinion as to
the fairness of such a transaction from an independent investment banking firm.
(b) The foregoing provisions of this Section 4.16 will not apply to
(i) any Restricted Payment that is not prohibited by Section 4.13, (ii)
reasonable and customary fees paid by the Company or its Restricted Subsidiaries
to their respective directors or (iii) customary investment banking,
underwriting, placement agent or financial advisor fees paid in connection with
services rendered to the Company or its Subsidiaries.
Section 4.17. Limitations on Liens.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, create, incur or otherwise cause or suffer to exist or become
effective any Liens of any kind upon any Property of the Company or any
Restricted Subsidiary, now owned or hereafter acquired, which secures
Indebtedness pari passu with or subordinated to the Notes unless (i) if such
Lien secures Indebtedness which is pari passu with the Notes, then the Notes are
secured on an equal and ratable basis with the obligations so secured until such
time as such obligation is no longer secured by a Lien or (ii) if such Lien
secures Indebtedness which is subordinated to the Notes, any such Lien shall be
subordinated to a Lien granted to the Holders of the Notes in the same
collateral as that securing such Lien to the same extent as such subordinated
Indebtedness is subordinated to the Notes.
Section 4.18. Limitation on Creation of
Subsidiaries.
The Company shall not create or acquire, nor permit any of its
Restricted Subsidiaries to create or acquire, any Subsidiary other than (i) a
Restricted Subsidiary existing as of the date of this Indenture, (ii) a
Restricted Subsidiary conducting a business similar or reasonably related to the
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business of the Company and its Subsidiaries as conducted on the Issue Date, or
(iii) an Unrestricted Subsidiary; provided, however, that each Restricted
Subsidiary which is a Domestic Subsidiary acquired or created pursuant to
clause (ii) shall have executed a guarantee, satisfactory in form and substance
to the Trustee (and with such documentation relating thereto as the Trustee
shall require, including, without limitation, a supplement or amendment to this
Indenture and opinions of counsel as to the enforceability of such guarantee),
pursuant to which such Restricted Subsidiary shall become a Guarantor. Neither
the Company nor any of the Guarantors will transfer any assets to a Domestic
Restricted Subsidiary which is not a Guarantor unless such Restricted
Subsidiary simultaneously with such transfer executes a guarantee satisfactory
in form and substance to the Trustee (together with the documentation referred
to in the preceding sentence) pursuant to which such Restricted Subsidiary
shall become a Guarantor.
Section 4.19. Payments for Consent.
Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of any 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 unless such consideration is offered to be paid or agreed
to be paid to all Holders of the Notes which so consent, waive or agree to amend
in the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.
Section 4.20. Change of Control.
(a) Within 20 days of the occurrence of a Change of Control, the
Company shall notify the Trustee in writing of such occurrence and shall make an
offer to purchase (the "Change of Control Offer") the outstanding Notes at a
purchase price equal to 101% of the principal amount thereof plus any accrued
and unpaid interest thereon to the Change of Control Payment Date (such purchase
price being hereinafter referred to as the "Change of Control Purchase Price")
in accordance with the procedures set forth in this Section 4.20.
(b) Within 20 days of the occurrence of a Change of Control, the
Company also shall (i) cause a notice of the Change of Control Offer to be sent
at least once to the Dow Jones News Service or similar business news service in
the United States and (ii) send by first-class mail, postage pre-
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paid, to the Trustee and to each Holder of the Notes, at the address appearing
in the register maintained by the Registrar of the Notes, a notice stating:
(i) that the Change of Control Offer is being made pursuant to this
Section 4.20 and that all Notes tendered will be accepted for payment,
and otherwise subject to the terms and conditions set forth herein;
(ii) the Change of Control Purchase Price and the purchase date
(which shall be a Business Day no earlier than 20 business days from the
date such notice is mailed (the "Change of Control Payment Date"));
(iii) that any Note not tendered will continue to accrue interest;
(iv) that, unless the Company defaults in the payment of the Change
of Control Purchase Price, any Notes accepted for payment pursuant to the
Change of Control Offer shall cease to accrue interest after the Change
of Control Payment Date;
(v) that Holders accepting the offer to have their Notes purchased
pursuant to a Change of Control Offer will be required to surrender the
Notes, with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Note completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the Business
Day preceding the Change of Control Payment Date;
(vi) that Holders will be entitled to withdraw their acceptance if
the Paying Agent receives, not later than the close of business on the
third Business Day preceding the Change of Control Payment Date, a
facsimile transmission or letter setting forth the name of the Holder,
the principal amount of the Notes delivered for purchase, and a statement
that such Holder is withdrawing his election to have such Notes
purchased;
(vii) that Holders whose Notes are being purchased only in part will
be issued new Notes equal in principal amount to the unpurchased portion
of the Notes surrendered, provided that each Note purchased and each such
new Note issued shall be in an original principal amount in denominations
of $1,000 and integral multiples thereof;
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(viii) any other procedures that a Holder must follow to accept a
Change of Control Offer or effect withdrawal of such acceptance; and
(ix) the name and address of the Paying Agent.
On the Change of Control Payment Date, the Company shall, to the
extent lawful, (i) accept for payment Notes or portions thereof tendered
pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent
money sufficient to pay the purchase price of all Notes or portions thereof so
tendered and (iii) deliver or cause to be delivered to the Trustee Notes so
accepted together with an Officers' Certificate stating the Notes or portions
thereof tendered to the Company. The Paying Agent shall promptly mail to each
Holder of Notes so accepted payment in an amount equal to the purchase price for
such Notes, and the Company shall execute and issue, and the Trustee shall, upon
the receipt of a written request from the Company, promptly authenticate and
make available for delivery to such Holder, a new Note equal in principal amount
to any unpurchased portion of the Notes surrendered; provided that each such new
Note shall be issued in an original principal amount in denominations of $1,000
and integral multiples thereof.
(c) If the Amended Credit Agreement is in effect, or any amounts are
owing thereunder or in respect thereof, at the time of the occurrence of a
Change of Control, prior to the mailing of the notice to Holders described in
the preceding paragraph (b), but in any event within 30 days following any
Change of Control, the Company covenants to (A) repay in full all obligations
under or in respect of the Amended Credit Agreement or offer to repay in full
all obligations under or in respect of the Amended Credit Agreement and repay
the obligations under or in respect of the Amended Credit Agreement of each
lender who has accepted such offer or (B) obtain the requisite consent under the
Amended Credit Agreement to permit the repurchase of the Notes as described
above. The Company must first comply with the covenant described in the
preceding sentence before it shall be required to purchase Notes in the event of
a Change of Control; provided that the Company's failure to comply with the
covenant described in the preceding sentence constitutes an Event of Default
described in Section 6.01(3) if not cured within 60 days after the notice
required by that section.
(d) (i) If the Company or any Subsidiary thereof has issued any
outstanding (A) Indebtedness that is subordinated in right of payment to the
Notes or (B) Preferred Stock, and the
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Company or such Subsidiary is required to repurchase, or make an offer to
repurchase, such Indebtedness, or redeem, or make an offer to redeem, such
Preferred Stock, in the event of a Change of Control or to make a distribution
with respect to such subordinated Indebtedness or Preferred Stock in the event
of a change of control, the Company shall not consummate any such offer or
distribution with respect to such subordinated Indebtedness or Preferred Stock
until such time as the Company shall have paid the Change of Control Purchase
Price in full to the Holders of Notes that have accepted the Company's Change
of Control Offer and shall otherwise have consummated the Change of Control
Offer made to Holders of the Notes and (ii) the Company will not issue
Indebtedness that is subordinated in right of payment to the Notes or Preferred
Stock with change of control provisions requiring the payment of such
Indebtedness or Preferred Stock prior to the payment of the Notes in the event
of a Change in Control under this Indenture.
In the event that a Change of Control occurs and the Holders of
Notes exercise their right to require the Company to purchase Notes, if such
purchase constitutes a "tender offer" for purposes of Rule 14e-1 under the
Exchange Act at that time, the Company will comply with the requirements of Rule
14e-1 as then in effect with respect to such repurchase.
ARTICLE 5
SUCCESSOR CORPORATION
Section 5.01. Limitation on Consolidation, Merger
and Sale of Assets.
(a) The Company shall not and shall not permit any Guarantor to
consolidate with, merge with or into, or transfer all or substantially all of
its assets (as an entirety or substantially as an entirety in one transaction or
a series of related transactions), to any Person unless: (i) the Company or the
Guarantor, as the case may be, shall be the continuing Person, or the Person (if
other than the Company or the Guarantor) formed by such consolidation or into
which the Company or the Guarantor, as the case may be, is merged or to which
the properties and assets of the Company or the Guarantor, as the case may be,
are transferred shall be a corporation organized and existing under the laws of
the United States or any State thereof or the District of Columbia and shall
expressly assume, by a supplemental indenture, executed and delivered to the
Trustee, in form satisfactory to the Trustee, all of the obligations of the
Company or the Guarantor, as the case may be,
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under the Notes and this Indenture, and the obligations under this Indenture
shall remain in full force and effect; (ii) immediately before and immediately
after giving effect to such transaction, no Default or Event of Default shall
have occurred and be continuing; and (iii) immediately after giving effect to
such transaction on a pro forma basis the Company or such Person could incur at
least $1.00 additional Indebtedness (other than Permitted Indebtedness)
pursuant to Section 4.10 hereof, provided that a Person that is a Guarantor may
merge into the Company or another Person that is a Guarantor on the Issue Date
without complying with this clause (iii).
(b) In connection with any consolidation, merger or transfer of
assets contemplated by this Section 5.01, the Company shall deliver or cause to
be delivered, to the Trustee, in form and substance reasonably satisfactory to
the Trustee, an Officers' Certificate and an Opinion of Counsel, each stating
that such consolidation, merger or transfer and the supplemental indenture in
respect thereto comply with this Section 5.01 and that all conditions precedent
herein provided for relating to such transaction or transactions have been
complied with.
Section 5.02. Successor Person Substituted.
Upon any consolidation or merger, or any transfer of all or
substantially all of the assets of the Company or any Guarantor in accordance
with Section 5.01 above, the successor corporation formed by such consolidation
or into which the Company is merged or to which such transfer is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company or such Guarantor under this Indenture with the same effect as if
such successor corporation had been named as the Company or such Guarantor
herein, and thereafter the predecessor corporation shall be relieved of all
obligations and covenants under this Indenture and the Notes.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
An "Event of Default" occurs if
(1) there is a default in the payment of any principal of, or
premium, if any, on the Notes when the same becomes due and payable at
maturity, upon acceleration, re-
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demption or otherwise, whether or not such payment is prohibited by the
provisions of Article 11 hereof;
(2) there is a default in the payment of any interest on any Note
when the same becomes due and payable and the Default continues for a
period of 30 days, whether or not such payment is prohibited by the
provisions of Article 11 hereof;
(3) the Company or any Guarantor defaults in the observance or
performance of any other covenant in the Notes or this Indenture for 60
days after written notice from the Trustee or the Holders of not less
than 25% in the aggregate principal amount of the Notes then outstanding;
(4) there is a default in the payment at final maturity of principal
in an aggregate amount of $10,000,000 or more with respect to any
Indebtedness of the Company or any Restricted Subsidiary thereof which
default shall not be cured, waived or postponed pursuant to an agreement
with the holders of such Indebtedness within 60 days after written
notice, or the acceleration of any such Indebtedness aggregating
$10,000,000 or more which acceleration shall not be rescinded or annulled
within 20 days after written notice to the Company of such Default by the
Trustee or any Holder;
(5) a court of competent jurisdiction enters a final judgment or
judgments which can no longer be appealed for the payment of money in
excess of $10,000,000 against the Company or any Restricted Subsidiary
thereof and such judgment remains undischarged, for a period of 60
consecutive days during which a stay of enforcement of such judgment
shall not be in effect;
(6) the Company or any Restricted Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an
involuntary case,
(C) consents to the appointment of a Custodian of it or for all or
substantially all of its property,
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(D) makes a general assignment for the benefit of its creditors, or
(E) generally is not paying its debts as they become due; or
(7) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(A) is for relief against the Company or any Restricted Subsidiary
in an involuntary case,
(B) appoints a Custodian of the Company or any Restricted Subsidiary
or for all or substantially all of the property of the Company or any
Restricted Subsidiary, or
(C) orders the liquidation of the Company or any Restricted
Subsidiary,
and the order or decree remains unstayed and in effect for 60 days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.
The Trustee may withhold notice to the Holders of the Notes of any
Default (except in payment of principal or premium, if any, or interest on the
Notes) if the Trustee considers it to be in the best interest of the Holders of
the Notes to do so.
Section 6.02. Acceleration.
If an Event of Default (other than an Event of Default arising under
Section 6.01(6) or (7) with respect to the Company) occurs and is continuing,
the Trustee by notice to the Company, or the Holders of not less than 25% in
aggregate principal amount of the Notes then outstanding may by written notice
to the Company and the Trustee declare to be immediately due and payable the
entire principal amount of all the Notes then outstanding plus accrued but
unpaid interest to the date of accelera-
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tion and (i) such amounts shall become immediately due and payable or (ii) if
there are any amounts outstanding under or in respect of the Credit Agreement,
such amounts shall become due and payable upon the first to occur of an
acceleration under or in respect of the Credit Agreement or five Business Days
after receipt by the Company and the Representative of notice of the
acceleration of the Notes; provided, however, that after such acceleration but
before a judgment or decree based on such acceleration is obtained by the
Trustee, the Holders of a majority in aggregate principal amount of the
outstanding Notes may rescind and annul such acceleration and its consequences
if (i) all existing Events of Default, other than the nonpayment of accelerated
principal, premium, if any, or interest that has become due solely because of
the acceleration, have been cured or waived, (ii) to the extent the payment of
such interest is lawful, interest on overdue installments of interest and
overdue principal, which has become due otherwise than by such declaration of
acceleration, has been paid and (iii) if the rescission would not conflict with
any judgment or decree. No such rescission shall affect any subsequent Default
or impair any right consequent thereto. In case an Event of Default specified
in Section 6.01(6) or (7) with respect to the Company occurs, such principal,
premium, if any, and interest amount with respect to all of the Notes shall be
due and payable immediately without any declaration or other act on the part of
the Trustee or the Holders of the Notes.
Section 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of, or premium, if any, and interest 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 Noteholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
Section 6.04. Waiver of Past Defaults and Events of Default.
Subject to Sections 6.02, 6.07 and 8.02 hereof, the Holders of a
majority in principal amount of the Notes then outstanding have the right to
waive any existing Default or Event of Default or compliance with any provision
of this Indenture or the Notes. Upon any such waiver, such Default shall
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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 Event of Default or impair any
right consequent thereto.
Section 6.05. Control by Majority.
The Holders of a majority in principal amount of the Notes then
outstanding may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on the Trustee by this Indenture. The Trustee, however, may refuse to
follow any direction that conflicts with law or this Indenture or that the
Trustee determines may be unduly prejudicial to the rights of another Noteholder
or that may involve the Trustee in personal liability; provided that the Trustee
may take any other action deemed proper by the Trustee which is not inconsistent
with such direction.
Section 6.06. Limitation on Suits.
Subject to Section 6.07 below, a Noteholder may not institute any
proceeding or pursue any remedy with respect to this Indenture or the Notes
unless:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(2) the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding make a written request to the Trustee to pursue
the remedy;
(3) such Holder or Holders offer to the Trustee indemnity reasonably
satisfactory to the Trustee against any loss, liability or expense to be
incurred in compliance with such request;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of indemnity; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60 day period by the Holders of a
majority in aggregate principal amount of the Notes then outstanding.
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A Noteholder may not use this Indenture to prejudice the rights of
another Noteholder or to obtain a preference or priority over another
Noteholder.
Section 6.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Note to receive payment of principal of, or premium, if any, and
interest of the Note on or after the respective due dates expressed in the Note,
or to bring suit for the enforcement of any such payment on or after such
respective dates, is absolute and unconditional and shall not be impaired or
affected without the consent of the Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default in payment of principal, premium or interest
specified in Section 6.01(1) or (2) hereof occurs and is continuing, the Trustee
may recover judgment in its own name and as trustee of an express trust against
the Company or the Guarantors (or any other obligor on the Notes) for the whole
amount of unpaid principal and accrued interest remaining unpaid, together with
interest on overdue principal and, to the extent that payment of such interest
is lawful, interest on overdue installments of interest, in each case at the
rate then borne by the Notes, and such further amounts 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 may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Noteholders allowed in any judicial proceedings relative to the Company or the
Guarantors (or any other obligor upon the Notes), any of their respective
creditors or any of their respective property and shall be entitled and
empowered to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same after deduction of its
charges and expenses to the extent that any such charges and expenses are not
paid out of the estate in any such proceedings and any custodian in any such
judicial proceeding is hereby authorized by each Noteholder to make such
payments to the Trustee, and in the event that the Trustee shall consent to the
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making of such payments directly to the Noteholders, 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.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Noteholder any plan
or reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Noteholder in any such proceedings.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article 6, it
shall pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.07 hereof,
including payment of all compensation, expenses and liabilities incurred
and all advances made, by the Trustee and the costs and expense of
collection;
SECOND: to Noteholders for amounts due and unpaid on the Notes for
principal, premium, if any, and interest as to each, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Notes; and
THIRD: to the Company or, to the extent the Trustee collects any
amount from any Guarantor, to such Guarantor.
The Trustee may fix a record date and payment date for any payment
to Noteholders 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 Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the Trustee, a
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suit by a Holder pursuant to Section 6.07 hereof or a suit by Holders of more
than 10% in principal amount of the Notes then outstanding.
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
person would exercise or use under the same circumstances in the conduct of his
own affairs.
(b) Except during the continuance of an Event of Default:
(1) The duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the TIA and the Trustee need
perform only those duties that are specifically set forth in this
Indenture and no others, and no covenants or obligations shall be implied
in this Indenture against the Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture but, in the case of any such certificates or opinions which by
any provision hereof are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Indenture (but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of
this Section 7.01.
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(2) The Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Sections 6.02 and 6.05 hereof.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any liability. The Trustee
shall be under no obligation to exercise any of its rights or powers under the
Indenture unless adequate indemnity satisfactory to it against such risk or
liability has been assured to it.
(e) Whether or not therein expressly so provided, paragraphs (a),
(b), (c) and (d) of this Section 7.01 shall govern every provision of this
Indenture that in any way relates to the Trustee.
(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 or
any Guarantor. Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by the law.
Section 7.02. Rights of Trustee.
Subject to Section 7.01 hereof:
(1) The Trustee may conclusively rely on and shall be protected in
acting or refraining from acting upon any document reasonably 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.
(2) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel, or both, which shall
conform to the provisions of Section 12.05 hereof. The Trustee shall be
protected and shall not be liable for any action it takes or omits to
take in good faith in reliance on such certificate or opinion.
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(3) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent
appointed by it with due care.
(4) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it reasonably believes to be authorized or
within its rights or powers.
(5) The Trustee may consult with counsel of its selection, and the
advice or opinion of such counsel as to matters of law shall be full and
complete authorization and protection from liability in respect of any
action taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.
(6) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this
Indenture, unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby.
(7) The Trustee shall not be deemed to have notice of any Default or
Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact
such a default is received by the Trustee at the Corporate Trust Office
of the Trustee, and such notice references the Notes and this Indenture.
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 make loans to, accept deposits from, perform
services for or otherwise deal with the Company or any Guarantor, or any
Affiliates thereof, with the same rights it would have if it were not Trustee.
Any Agent may do the same with like rights. The Trustee, however, shall be
subject to Sections 7.10 and 7.11 hereof.
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Section 7.04. Trustee's Disclaimer.
The Trustee 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 sale of Notes or any money paid to the Company or
upon the Company's direction pursuant to the terms of this Indenture, it shall
not be responsible for the use or application of money received by any Paying
Agent other than the Trustee, and it shall not be responsible for any statement
in the Notes other than its certificate of authentication.
Section 7.05. Notice of Default.
If a Default or an Event of Default occurs and is continuing and if
it is actually known to the Trustee, the Trustee shall mail to each Noteholder
notice of the Default or the Event of Default, as the case may be, within 90
days after it occurs. Except in the case of a Default or an Event of Default in
payment of the principal of, or premium, if any, or interest on any Note the
Trustee may withhold the notice if and so long as the board of directors of the
Trustee, the executive committee or any trust committee of such board and/or its
Trust Officers in good faith determine(s) that withholding the notice is in the
interests of the Noteholders.
Section 7.06. Reports by Trustee to Holders.
Within 60 days after May 15 of any year, commencing the May 15
following the date of this Indenture, the Trustee shall mail to each Noteholder
a brief report dated as of such May 15 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 report date, no report need be transmitted). The Trustee
also shall comply with TIA Section Section 313(b) and 313(c).
A copy of each report at the time of its mailing to Noteholders
shall be filed with the SEC and each stock exchange, if any, on which the Notes
are listed. The Company shall promptly notify the Trustee when the Notes are
listed on any stock exchange and the Trustee shall comply with TIA Section
313(d).
Section 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time such
compensation for its services as the Trustee and the Company shall from time to
time agree in writing. The Trus-
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tee's compensation shall not be limited by any provision of law on compensation
of a trustee of an express trust. The Company shall reimburse the Trustee
promptly upon request for all reasonable disbursements, expenses and advances
incurred or made by it in connection with its duties under this Indenture,
including the reasonable compensation, disbursements and expenses of the
Trustee's agents and counsel.
The Company shall indemnify each of the Trustee and any predecessor
Trustee for, and hold it harmless against, any and all damages, claims, loss or
liability incurred by it in connection with the acceptance or performance of its
duties under this Indenture including the reasonable costs and expenses of
enforcing this Indenture against the Company and the Guarantors and defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The Trustee shall notify
the Company promptly of any claim asserted against the Trustee for which it may
seek indemnity. However, the failure by the Trustee to so notify the Company
shall not relieve the Company of its obligations. Notwithstanding the
foregoing, the Company and the Guarantors need not reimburse the Trustee for any
expense or indemnify it against any loss or liability incurred by the Trustee
through its negligence or bad faith. To secure the payment obligations of the
Company and the Guarantors in this Section 7.07, the Trustee shall have a lien
prior to the Notes on all money or property held or collected by the Trustee
except such money or property held in trust to pay principal of 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(6) or (7) hereof occurs, the expenses and
the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
For purposes of this Section 7.07, the term "Trustee" shall include
any trustee appointed pursuant to Article 9.
The obligation of the Company and the Guarantors under this Section
7.07 shall survive the satisfaction and discharge of this Indenture.
Section 7.08. Replacement of Trustee.
The Trustee may resign by so notifying the Company in writing. The
Holders of a majority in principal amount of the
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outstanding Notes may remove the Trustee by notifying the removed Trustee in
writing and may appoint a successor Trustee with the Company's written consent
which consent shall not be unreasonably withheld. The Company may remove the
Trustee at its election if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee
or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly notify each Holder
of such event and shall promptly appoint a successor Trustee.
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 at least 10% in principal amount of the outstanding Notes may
petition, at the expense of the Company, any court of competent jurisdiction for
the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10 hereof, any
Noteholder 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. Immediately following
such delivery, the retiring Trustee shall, subject to its rights under Section
7.07 hereof, 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), 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. A successor Trustee shall mail notice of its succession to each
Noteholder.
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Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the obligations of the Company and the Guarantors under Section 7.07
hereof shall continue for the benefit of the retiring Trustee.
Section 7.09. Successor Trustee by Consolidation,
Merger or Conversion.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust assets to, another
corporation, subject to Section 7.10 hereof, the successor corporation without
any further act shall be the successor Trustee.
Section 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5) in every respect. The
Trustee shall have a combined capital and surplus of at least $100,000,000 as
set forth in its most recent published annual report of condition. The Trustee
shall comply with TIA Section 310(b), including the provision in Section
310(b)(1).
Section 7.11. Preferential Collection of Claims
Against Company.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311 (b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated therein.
Section 7.12. Paying Agents.
The Company shall cause each Paying Agent other than the Trustee to
execute and deliver to it and the Trustee an instrument in which such agent
shall agree with the Trustee, subject to the provisions of this Section 7.12:
(A) that it will hold all sums held by it as agent for the payment
of principal of, or premium, if any, or interest on, the Notes (whether
such sums have been paid to it by the Company or by any obligor on the
Notes) in trust for the benefit of Holders of the Notes or the Trustee;
(B) that it will at any time during the continuance of any Event of
Default, upon written request from the
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Trustee, deliver to the Trustee all sums so held in trust by it together
with a full accounting thereof; and
(C) that it will give the Trustee written notice within three (3)
Business Days of any failure of the Company (or by any obligor on the
Notes) in the payment of any installment of the principal of, premium, if
any, or interest on, the Notes when the same shall be due and payable.
ARTICLE 8
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 8.01. Without Consent of Holders.
The Company and the Guarantors, when authorized by a Board
Resolution of each of them, and the Trustee may amend or supplement this
Indenture or the Notes without notice to or consent of any Noteholder:
(1) to comply with Section 5.01 hereof;
(2) to provide for uncertificated Notes in addition to or in place
of certificated Notes;
(3) to comply with any requirements of the SEC under the TIA;
(4) to cure any ambiguity, defect or inconsistency, or to make any
other change that does not materially and adversely affect the rights of
any Noteholder; or
(5) to make any other change that does not, in the opinion of the
Trustee, adversely affect in any material respect the rights of any
Noteholders hereunder.
The Trustee is hereby authorized to join with the Company and the
Guarantors in the execution of any supplemental indenture authorized or
permitted by the terms of this Indenture and to make any further appropriate
agreements and stipulations which may be therein contained, but the Trustee
shall not be obligated to enter into any such supplemental indenture which
adversely affects its own rights, duties or immunities under this Indenture.
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Section 8.02. With Consent of Holders.
The Company, the Guarantors, when authorized by a Board Resolution
of each of them, and the Trustee may amend or supplement this Indenture or the
Notes with the written consent of the Holders of not less than a majority in
aggregate principal amount of the outstanding Notes without notice to any
Noteholder. The Holders of not less than a majority in aggregate principal
amount of the outstanding Notes may waive compliance in a particular instance by
the Company with any provision of this Indenture or the Notes without notice to
any Noteholder. Subject to Section 8.04, without the consent of each Noteholder
affected, however, an amendment, supplement or waiver, including a waiver
pursuant to Section 6.04, may not:
(1) reduce the amount of Notes whose Holders must consent to an
amendment, supplement or waiver to this Indenture or the Notes;
(2) reduce the rate of or change the time for payment of interest on
any Note;
(3) reduce the principal of or premium on or change the stated
maturity of any Note;
(4) make any Note payable in money other than that stated in the
Note or change the place of payment from New York, New York;
(5) change the amount or time of any payment required by the Notes
or reduce the premium payable upon any redemption of the Notes in
accordance with Paragraph 6 of the Notes, or change the time before which
no such redemption may be made;
(6) waive a default in the payment of the principal of, or interest
on, or redemption payment with respect to, any Note;
(7) make any changes in Sections 6.04 or 6.07 hereof or this
sentence of Section 8.02; or
(8) affect the ranking of the Notes or the Guarantees in a manner
adverse to the Holders.
After an amendment, supplement or waiver under this Section 8.02
becomes effective, the Company shall mail to the
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Holders a notice briefly describing the amendment, supplement or waiver.
Upon the request of the Company, accompanied by a Board Resolution
authorizing the execution of any such supplemental indenture, and upon the
receipt by the Trustee of evidence reasonably satisfactory to the Trustee of the
consent of the Noteholders as aforesaid and upon receipt by the Trustee of the
documents described in Section 8.06 hereof, the Trustee shall join with the
Company and the Guarantors in the execution of such supplemental indenture
unless such supplemental indenture affects the Trustee's own rights, duties or
immunities under this Indenture, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such supplemental
indenture.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
Section 8.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the Notes
shall comply with the TIA as then in effect.
Section 8.04. Revocation and Effect of Consents.
Until an amendment, supplement, waiver or other action becomes
effective, a consent to it by a Holder of a Note is a continuing consent
conclusive and binding upon such Holder and every subsequent Holder of the same
Note or portion thereof, and of any Note issued upon the transfer thereof or in
exchange therefor or in place thereof, even if notation of the consent is not
made on any such Note. Any such Holder or subsequent Holder, however, may
revoke the consent as to his Note or portion of a Note, if the Trustee receives
the notice of revocation before the date the amendment, supplement, waiver or
other action becomes effective.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders entitled to consent to any amendment,
supplement, or waiver which record date shall be at least 30 days prior to the
first solicitation of such consent. If a record date is fixed, then,
notwithstanding the preceding paragraph, those Persons who were Holders at such
record date (or their duly designated proxies), and only such Persons, shall be
entitled to consent to such amend-
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ment, supplement, or waiver or to revoke any consent previously given, whether
or not such Persons continue to be Holders after such record date. No such
consent shall be valid or effective for more than 90 days after such record
date.
After an amendment, supplement, waiver or other action becomes
effective, it shall bind every Noteholder, unless it makes a change described in
any of clauses (1) through (8) of Section 8.02 hereof. In that case the
amendment, supplement, waiver or other action shall bind each Holder of a Note
who has consented to it and every subsequent Holder of a Note or portion of a
Note that evidences the same debt as the consenting Holder's Note; provided that
any such waiver shall not impair or affect the right of any Holder to receive
payment of principal of and interest on a Note, on or after the respective due
dates expressed in such Note, or to bring suit for the enforcement of any such
payment on or after such respective dates without the consent of such Holder.
Section 8.05. Notation on or Exchange of Notes.
If an amendment, supplement, or waiver changes the terms of a Note,
the Trustee may request the Holder of the Note to deliver it to the Trustee. In
such case, the Trustee shall place an appropriate notation on the Note about the
changed terms and return it to the Holder. Alternatively, if the Company or the
Trustee so determines, the Company in exchange for the Note shall issue and the
Trustee shall authenticate a new security that reflects the changed terms.
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 8.06. Trustee To Sign Amendments, etc.
The Trustee shall sign any amendment, supplement or waiver
authorized pursuant to this Article 8 if the amendment, supplement or waiver
does not adversely affect the rights, duties, liabilities or immunities of the
Trustee. If it does, the Trustee may, but need not, sign it. In signing or
refusing to sign such amendment, supplement or waiver the Trustee shall be
entitled to receive and, subject to Section 7.01 hereof, shall be fully
protected in relying upon an Officers' Certificate and an Opinion of Counsel
stating that such amendment, supplement or waiver is authorized or permitted by
this Indenture, that it is not inconsistent herewith, and that it will be valid
and binding upon the Company and the Guarantors in accordance with its terms.
The Company or any Guarantor may not
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sign an amendment or supplement until the Board of Directors of the Company or
such Guarantor, as appropriate, approves it.
ARTICLE 9
DISCHARGE OF INDENTURE; DEFEASANCE
Section 9.01. Discharge of Indenture.
The Company and the Guarantors may terminate their obligations under
the Notes, the Guarantees and this Indenture, except the obligations referred to
in the last paragraph of this Section 9.01, if there shall have been cancelled
by the Trustee or delivered to the Trustee for cancellation all Notes
theretofore authenticated and delivered (other than any Notes that are asserted
to have been destroyed, lost or stolen and that shall have been replaced as
provided in Section 2.07 hereof) and the Company has paid all sums payable by it
hereunder or deposited all required sums with the Trustee.
After such delivery the Trustee upon request shall acknowledge in
writing the discharge of the Company's and the Guarantors' obligations under the
Notes, the Guarantees and this Indenture except for those surviving obligations
specified below.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company in Sections 7.07, 9.05 and 9.06 hereof shall
survive.
Section 9.02. Legal Defeasance.
The Company may at its option, by Board Resolution, be discharged
from its obligations with respect to the Notes and the Guarantors discharged
from their obligations under the Guarantees on the date the conditions set forth
in Section 9.04 below are satisfied (hereinafter, "Legal Defeasance"). For this
purpose, such Legal Defeasance means that the Company shall be deemed to have
paid and discharged the entire indebtedness represented by the Notes and to have
satisfied all its other obligations under such Notes and this Indenture insofar
as such Notes are concerned (and the Trustee, at the expense of the Company,
shall, subject to Section 9.06 hereof, execute proper instruments acknowledging
the same), except for the following which shall survive until otherwise
terminated or discharged hereunder: (A) the rights of Holders of outstanding
Notes to receive solely from the trust funds described in Section 9.04 hereof
and as more fully set forth in such Section,
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payments in respect of the principal of, premium, if any, and interest on such
Notes when such payments are due, (B) the Company's obligations with respect to
such Notes under Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08 and 4.09 hereof,
(C) the rights, powers, trusts, duties, and immunities of the Trustee hereunder
(including claims of, or payments to, the Trustee under or pursuant to Section
7.07 hereof) and (D) this Article 9. Subject to compliance with this Article
9, the Company may exercise its option under this Section 9.02 with respect to
the Notes notwithstanding the prior exercise of its option under Section 9.03
below with respect to the Notes.
Section 9.03. Covenant Defeasance.
At the option of the Company, pursuant to a Board Resolution, the
Company and the Guarantors shall be released from their respective obligations
under Sections 4.02 through 4.08 and Sections 4.10 through 4.20 hereof,
inclusive, and clause (a)(iii) of Section 5.01 hereof with respect to the
outstanding Notes on and after the date the conditions set forth in Section 9.04
hereof are satisfied (hereinafter, "Covenant Defeasance"). For this purpose,
such Covenant Defeasance means that the Company and the Guarantors may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such specified Section or portion thereof, whether
directly or indirectly by reason of any reference elsewhere herein to any such
specified Section or portion thereof or by reason of any reference in any such
specified Section or portion thereof to any other provision herein or in any
other document, but the remainder of this Indenture and the Notes shall be
unaffected thereby.
Section 9.04. Conditions to Defeasance or Covenant
Defeasance.
The following shall be the conditions to application of Section 9.02
or Section 9.03 hereof to the outstanding Notes:
(1) the Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the
requirements of Section 7.10 hereof who shall agree to comply with the
provisions of this Article 9 applicable to it) as funds in trust for the
purpose of making the following payments, specifically pledged as
security for, and dedicated solely to, the benefit of the Holders of the
Notes, (A) money in an amount, or (B) U.S. Government Obligations which
through the scheduled payment
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of principal and interest in respect thereof in accordance with their
terms will provide, not later than the due date of any payment, money in
an amount, or (C) a combination thereof, sufficient, in the opinion of a
nationally-recognized firm of independent public accountants expressed in
a written certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee (or other qualifying
trustee) to pay and discharge, the principal of, premium, if any, and
accrued interest on the outstanding Notes at the maturity date of such
principal, premium, if any, or interest, or on dates for payment and
redemption of such principal, premium, if any, and interest selected in
accordance with the terms of this Indenture and of the Notes;
(2) no Event of Default or Default with respect to the Notes shall
have occurred and be continuing on the date of such deposit, or shall
have occurred and be continuing at any time during the period ending on
the 91st day after the date of such deposit or, if longer, ending on the
day following the expiration of the longest preference period under any
Bankruptcy Law applicable to the Company in respect of such deposit (it
being understood that this condition shall not be deemed satisfied until
the expiration of such period);
(3) such Legal Defeasance or Covenant Defeasance shall not cause the
Trustee to have a conflicting interest for purposes of the TIA with
respect to any securities of the Company;
(4) such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute default under any other agreement
or instrument to which the Company is a party or by which it is bound;
(5) the Company shall have delivered to the Trustee an Opinion of
Counsel stating that, as a result of such Legal Defeasance or Covenant
Defeasance, neither the trust nor the Trustee will be required to
register as an investment company under the Investment Company Act of
1940, as amended;
(6) in the case of an election under Section 9.02 above, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that
(i) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling to the effect that or (ii) there
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has been a change in any applicable Federal income tax law with the
effect that, and such opinion shall confirm that, the Holders of the
outstanding Notes or persons in their positions will not recognize
income, gain or loss for Federal income tax purposes solely as a result
of such Legal Defeasance and will be subject to Federal income tax on the
same amounts, in the same manner, including as a result of prepayment,
and at the same times as would have been the case if such Legal
Defeasance had not occurred;
(7) in the case of an election under Section 9.03 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel to the
effect 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;
(8) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the Legal Defeasance under
Section 9.02 above or the Covenant Defeasance under Section 9.03 hereof
(as the case may be) have been complied with;
(9) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit under clause (1) was not made by the
Company with the intent of defeating, hindering, delaying or defrauding
any creditors of the Company or others; and
(10) the Company shall have paid or duly provided for payment under
terms mutually satisfactory to the Company and the Trustee all amounts
then due to the Trustee pursuant to Section 7.07 hereof.
Section 9.05. Deposited Money and U.S. Government
Obligations To Be Held in Trust;
Other Miscellaneous Provisions.
All money and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee pursuant to Section 9.04 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 as the Trus-
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tee 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 accrued interest, but
such money need not be segregated from other funds except to the extent
required by law.
The Company and the Guarantors shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed against the U.S.
Government Obligations deposited pursuant to Section 9.04 hereof or the
principal, premium, if any, 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 9 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 9.04 hereof which, in the opinion of a nationally-recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, is or are in excess of the amount thereof which would
then be required to be deposited to effect an equivalent Legal Defeasance or
Covenant Defeasance.
Section 9.06. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 9.01, 9.02 or 9.03 hereof by
reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company's and each Guarantor's obligations under this
Indenture, the Notes and the Guarantees shall be revived and reinstated as
though no deposit had occurred pursuant to this Article 9 until such time as the
Trustee or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with Section 9.01 hereof; provided, however, that if
the Company or the Guarantors have made any payment of principal of, premium, if
any, or accrued interest on any Notes because of the reinstatement of their
obligations, the Company or the Guarantors, as the case may be, shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money or U.S. Government Obligations held by the Trustee or Paying
Agent.
Section 9.07. Moneys Held by Paying Agent.
In connection with the satisfaction and discharge of this Indenture,
all moneys then held by any Paying Agent under
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the provisions of this Indenture shall, upon demand of the Company, be paid to
the Trustee, or if sufficient moneys have been deposited pursuant to Section
9.01 hereof, to the Company (or, if such moneys had been deposited by the
Guarantors, to such Guarantors), and thereupon such Paying Agent shall be
released from all further liability with respect to such moneys.
Section 9.08. Moneys Held by Trustee.
Any moneys deposited with the Trustee or any Paying Agent or then
held by the Company or the Guarantors in trust for the payment of the principal
of, or premium, if any, or interest on any Note that are not applied but remain
unclaimed by the Holder of such Note for two years after the date upon which the
principal of, or premium, if any, or interest on such Note shall have
respectively become due and payable shall be repaid to the Company (or, if
appropriate, the Guarantors) upon Company Request, or if such moneys are then
held by the Company or the Guarantors in trust, such moneys shall be released
from such trust; and the Holder of such Note entitled to receive such payment
shall thereafter, as an unsecured general creditor, look only to the Company and
the Guarantors for the payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money shall thereupon cease; provided,
however, that the Trustee or any such Paying Agent, before being required to
make any such repayment, may, at the expense of the Company and the Guarantors,
either mail to each Noteholder affected, at the address shown in the register of
the Notes maintained by the Registrar pursuant to Section 2.03 hereof, or cause
to be published once a week for two successive weeks, in a newspaper published
in the English language, customarily published each Business Day and of general
circulation in the City of New York, New York, a 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 mailing or publication, any unclaimed balance of
such moneys then remaining will be repaid to the Company. After payment to the
Company or the Guarantors or the release of any money held in trust by the
Company or any Guarantors, as the case may be, Noteholders entitled to the money
must look only to the Company and the Guarantors for payment as general
creditors unless applicable abandoned property law designates another person.
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ARTICLE 10
GUARANTEE OF NOTES
Section 10.01. Guarantee.
Subject to the provisions of this Article 10, each Guarantor hereby
jointly and severally unconditionally guarantees to each Holder and to the
Trustee, on behalf of the Holders, (i) the due and punctual payment of the
principal of, and premium, if any, and interest on each Note, when and as the
same shall become due and payable, whether at maturity, by acceleration or
otherwise, the due and punctual payment of interest on the overdue principal of,
and premium, if any, and interest on the Notes, to the extent lawful, 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 such Note and this
Indenture, and (ii) in the 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, at stated maturity, by acceleration or otherwise. Each Guarantor
hereby agrees that its obligations hereunder shall be absolute and
unconditional, irrespective of, and shall be unaffected by, any invalidity,
irregularity or unenforceability of any such Note or this Indenture, any failure
to enforce the provisions of any such Note or this Indenture, any waiver,
modification or indulgence granted to the Company with respect thereto by the
Holder of such Note or the Trustee, or any other circumstances which may
otherwise constitute a legal or equitable discharge of a surety or such
Guarantor.
Each Guarantor hereby waives diligence, presentment, filing of
claims with a court in the event of merger or bankruptcy of the Company, any
right to require a proceeding first against the Company, protest or notice with
respect to any such Note or the Indebtedness evidenced thereby and all demands
whatsoever, and covenants that this Guarantee will not be discharged as to any
such Note except by payment in full of the principal thereof, premium if any,
and interest thereon and as provided in Section 9.01 hereof. Each Guarantor
further agrees that, as between such Guarantor, on the one hand, and the Holders
and the Trustee, on the other hand, (i) the maturity of the Obligations
guaranteed hereby may be accelerated as provided in Article 6 hereof for the
purposes of this Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the Obligations
guaranteed hereby, and (ii) in the event of any declaration of accelera
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- -tion of such Obligations as provided in Article 6 hereof, such Obligations
(whether or not due and payable) shall forthwith become due and payable by each
Guarantor for the purpose of this Guarantee. In addition, without limiting the
foregoing provisions, upon the effectiveness of an acceleration under Article 6
hereof, the Trustee shall promptly make a demand for payment on the Notes under
the Guarantee provided for in this Article 10 and not discharged.
The Guarantee set forth in this Section 10.01 shall not be valid or
become obligatory for any purpose with respect to a Note until the certificate
of authentication on such Note shall have been signed by or on behalf of the
Trustee.
Section 10.02. Execution and Delivery of Guarantees.
To evidence the Guarantee set forth in this Article 10, each
Guarantor hereby agrees that a notation of such Guarantee shall be placed on
each Note authenticated and made available for delivery by the Trustee and that
this Guarantee shall be executed on behalf of each Guarantor by the manual or
facsimile signature of an Officer of each Guarantor.
Each Guarantor hereby agrees that the Guarantee set forth in Section
10.01 shall remain in full force and effect notwithstanding any failure to
endorse on each Note a notation of such Guarantee.
If an Officer of a Guarantor whose signature is on the Guarantee no
longer holds that office at the time the Trustee authenticates the Note on which
the Guarantee is endorsed, the Guarantee shall be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Guarantee set forth in
this Indenture on behalf of each Guarantor.
Section 10.03. Limitation of Guarantee.
The obligations of each Guarantor are limited to the maximum amount
as will, after giving effect to all other contingent and fixed liabilities of
such Guarantor (including, without limitation, any guarantees of Senior
Indebtedness) and after giving effect to any collections from or payments made
by or on behalf of any other Guarantor in respect of the obligations of such
other Guarantor under its Guarantee or pursuant to its contribution obligations
under this Indenture, result in
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the obligations of such Guarantor under the Guarantee not constituting a
fraudulent conveyance or fraudulent transfer under federal or state law. Each
Guarantor that makes a payment or distribution under a Guarantee shall be
entitled to a contribution from each other Guarantor in a pro rata amount based
on the Adjusted Net Assets of each Subsidiary Guarantor.
Section 10.04. Additional Guarantors.
The Company covenants and agrees that it will cause any Person which
becomes obligated to guarantee the Notes, pursuant to the terms of Section 4.18
hereof, to execute a guarantee satisfactory in form and substance to the Trustee
pursuant to which such Restricted Subsidiary shall guarantee the obligations of
the Company under the Notes and this Indenture in accordance with this Article
10 with the same effect and to the same extent as if such Person had been named
herein as a Guarantor.
Section 10.05. Release of Guarantor.
A Guarantor shall be released from all of its obligations under its
Guarantee if:
(i) the Guarantor has sold all or substantially all of its assets or
the Company and its Restricted Subsidiaries have sold all of the Capital
Stock of the Guarantor owned by them, in each case in a transaction in
compliance with Sections 4.15 and 5.01 hereof; or
(ii) the Guarantor merges with or into or consolidates with, or
transfers all or substantially all of its assets to, the Company or
another Guarantor in a transaction in compliance with Section 5.01
hereof;
and in each such case, the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to such transactions have been complied
with.
Section 10.06. Guarantee Obligations Subordinated to
Guarantor Senior Indebtedness.
Each Guarantor covenants and agrees, and each Holder of Notes, by
its acceptance thereof, likewise covenants and agrees, that to the extent and in
the manner hereinafter set forth in this Article 10, the Indebtedness
represented by the Guarantee and the payment of the principal of, premium, if
any,
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and interest on the Notes pursuant to the Guarantee by such Guarantor are
hereby expressly made subordinate and subject in right of payment as provided
in this Article 10 to the prior payment in full in cash or Cash Equivalents or,
as acceptable to the holders of Guarantor Senior Indebtedness of such
Guarantor, in any other manner, of all Guarantor Senior Indebtedness of such
Guarantor.
This Section 10.06 and the following Sections 10.07 through 10.11
shall constitute a continuing offer to all Persons who, in reliance upon such
provisions, become holders of or continue to hold Guarantor Senior Indebtedness
of any Guarantor; and such provisions are made for the benefit of the holders of
Guarantor Senior Indebtedness of each Guarantor; and such holders are made
obligees hereunder and they or each of them may enforce such provisions.
Section 10.07. Payment Over of Proceeds upon
Dissolution, etc., of a Guarantor.
In the event of (a) any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to any Guarantor or to its
creditors, as such, or to its assets, whether voluntary or involuntary, or (b)
any liquidation, dissolution or other winding-up of any Guarantor, whether
voluntary or involuntary and whether or not involving insolvency or bankruptcy
or (c) any general assignment for the benefit of creditors or any other
marshaling of assets or liabilities of any Guarantor, then and in any such
event:
(1) the holders of all Guarantor Senior Indebtedness of such
Guarantor shall be entitled to receive payment in full in cash or Cash
Equivalents or, as acceptable to the holders of such Guarantor Senior
Indebtedness, in any other manner, of all amounts due on or in respect of
all such Guarantor Senior Indebtedness, or provision shall be made for
such payment, before the Holders of the Notes are entitled to receive,
pursuant to the Guarantee of such Guarantor, any payment or distribution
of any kind or character by such Guarantor on account of any of its
Obligations on its Guarantee; and
(2) any payment or distribution of assets of such Guarantor of any
kind or character, whether in cash, property or securities, by set-off or
otherwise, to which the Holders or the Trustee would be entitled but for
the subordination provisions of this Article 10 shall be paid by
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the liquidating trustee or agent or other Person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating
trustee or otherwise, directly to the holders of Guarantor Senior
Indebtedness of such Guarantor or their representative or representatives
or to the trustee or trustees under any indenture under which any
instruments evidencing any of such Guarantor Senior Indebtedness may have
been issued, ratably according to the aggregate amounts remaining unpaid
on account of such Guarantor Senior Indebtedness held or represented by
each, to the extent necessary to make payment in full in cash, Cash
Equivalents or, as acceptable to the Holders of such Guarantor Senior
Indebtedness of such Guarantor, in any other manner, of all such
Guarantor Senior Indebtedness remaining unpaid, after giving effect to
any concurrent payment or distribution to the holders of such Guarantor
Senior Indebtedness; and
(3) in the event that, notwithstanding the foregoing provisions of
this Section 10.07, the Trustee or the Holder of any Note shall have
received any payment or distribution of assets of such Guarantor of any
kind or character, whether in cash, property or securities, including,
without limitation, by way of set-off or otherwise, in respect of any of
its Obligations on its Guarantee before all Guarantor Senior Indebtedness
of such Guarantor is paid in full or payment thereof provided for, then
and in such event such payment or distribution shall be paid over or
delivered forthwith to the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee, agent or other Person making payment or
distribution of assets of such Guarantor for application to the payment
of all such Guarantor Senior Indebtedness remaining unpaid, to the extent
necessary to pay all of such Guarantor Senior Indebtedness in full in
cash, Cash Equivalents or, as acceptable to the holders of such Guarantor
Senior Indebtedness, any other manner, after giving effect to any
concurrent payment or distribution to or for the holders of such
Guarantor Senior Indebtedness.
The consolidation of a Guarantor with, or the merger of a Guarantor
with or into, another Person or the liquidation or dissolution of a Guarantor
following the conveyance, transfer or lease of its properties and assets
substantially as an entirety to another Person upon the terms and conditions set
forth in Article 5 hereof shall not be deemed a dissolution, winding-up,
liquidation, reorganization, assignment for the benefit of creditors or
marshaling of assets and liabilities of
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such Guarantor for the purposes of this Article 10 if the Person formed by such
consolidation or the surviving entity of such merger or the Person which
acquires by conveyance, transfer or lease such properties and assets
substantially as an entirety, as the case may be, shall, as a part of such
consolidation, merger, conveyance, transfer or lease, comply with the
conditions set forth in such Article 5 hereof.
Section 10.08. Suspension of Guarantee Obligations
When Guarantor Senior Indebtedness in
Default.
(a) Unless Section 10.07 hereof shall be applicable, after the
occurrence of a Payment Default with respect to any Designated Senior
Indebtedness which constitutes Guarantor Senior Indebtedness, no payment or
distribution of any assets or securities of a Guarantor (or any Restricted
Subsidiary or Subsidiary of such Guarantor) of any kind or character (including,
without limitation, cash, property and any payment or distribution which may be
payable or deliverable by reason of the payment of any other Indebtedness of
such Guarantor being subordinated to its Obligations on its Guarantee) may be
made by or on behalf of such Guarantor (or any Restricted Subsidiary or
Subsidiary of such Guarantor), including, without limitation, by way of set-off
or otherwise, for or on account of its Obligations on its Guarantee, and neither
the Trustee nor any holder or owner of any Notes shall take or receive from any
Guarantor (or any Restricted Subsidiary or Subsidiary of such Guarantor),
directly or indirectly in any manner, payment in respect of all or any portion
of its Obligations on its Guarantee following the delivery by the representative
of the holders of , for so long as there shall exist any Designated Senior
Indebtedness under or in respect of the Credit Agreement, the holders of
Designated Senior Indebtedness under or in respect of the Credit Agreement or,
thereafter, the holders of Designated Senior Indebtedness which constitutes
Guarantor Senior Indebtedness (in either such case, the "Guarantor
Representative") to the Trustee of written notice of (i) the occurrence of a
Payment Default on Designated Senior Indebtedness or (ii) the occurrence of a
Non-Payment Event of Default on such Designated Senior Indebtedness and the
acceleration of the maturity of Designated Senior Indebtedness in accordance
with its terms, and in any such event, such prohibition shall continue until
such Payment Default is cured, waived in writing or ceases to exist or such
acceleration has been rescinded or otherwise cured. At such time as the
prohibition set forth in the preceding sentence shall no longer be in effect,
subject to the provisions of the following paragraph (b), such Guarantor shall
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resume making any and all required payments in respect of its Obligations under
its Guarantee.
(b) Unless Section 10.07 hereof shall be applicable, upon the
occurrence of a Non-Payment Event of Default on Designated Senior Indebtedness
guaranteed by a Guarantor (which guarantee constitutes Guarantor Senior
Indebtedness of such Guarantor), no payment or distribution of any assets of
such Guarantor of any kind or character (including, without limitation, cash,
property and any payment or distribution which may be payable or deliverable by
reason of the payment of any other Indebtedness of such Guarantor being
subordinated to its Obligations on its Guarantee) shall be made by such
Guarantor, including, without limitation, by way of set-off or otherwise, on
account of any of its Obligations on its Guarantee, and neither the Trustee nor
any holder or owner of any Notes shall take or receive from any Guarantor (or
any Restricted Subsidiary or Subsidiary of such Guarantor), directly or
indirectly in any manner, payment in respect of all or any portion of its
Obligations on its Guarantee for a period (the "Guarantee Payment Blockage
Period") commencing on the date of receipt by the Trustee of written notice from
the Guarantor Representative of such Non-Payment Event of Default, unless and
until (subject to any blockage of payments that may then be in effect under the
preceding paragraph (a)) the earliest to occur of the following events: (x)
more than 179 days shall have elapsed since the date of receipt of such written
notice by the Trustee, (y) such Non-Payment Event of Default shall have been
cured or waived in writing or shall have ceased to exist or such Designated
Senior Indebtedness shall have been discharged or paid in full in cash or Cash
Equivalents or (z) such Guarantee Payment Blockage Period shall have been
terminated by written notice to such Guarantor or the Trustee from the Guarantor
Representative initiating such Guarantee Payment Blockage Period, or the holders
of at least a majority in principal amount of such issue of Designated Senior
Indebtedness, after which, in the case of clause (x), (y) or (z), such Guarantor
shall resume making any and all required payments in respect of its Obligations
on its Guarantee. Notwithstanding any other provisions of this Indenture, no
Non-Payment Event of Default with respect to Designated Senior Indebtedness
which existed or was continuing on the date of the commencement of any Guarantee
Payment Blockage Period initiated by the Guarantor Representative shall be, or
be made, the basis for the commencement of a second Guarantee Payment Blockage
Period initiated by the Guarantor Representative unless such event of default
shall have been cured or waived for a period of not less than 90 consecutive
days. In no event shall a Guarantee Payment Blockage Period extend beyond 179
days from the date of the receipt by the Trustee of the notice referred to in
this Section 10.08(b) or, in the event of a Non-Payment Event of Default which
formed the basis for a Payment Blockage Period under Section 11.03(b) hereof,
179
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days from the date of the receipt by the Trustee of the notice referred to in
Section 11.03(b) (the "Initial Guarantee Blockage Period"). Any number of
additional Guarantee Payment Blockage Periods may be commenced during the
Initial Guarantee Blockage Period; provided, however, that no such additional
Guarantee Payment Blockage Period shall extend beyond the Initial Guarantee
Blockage Period. After the expiration of the Initial Guarantee Blockage
Period, no Guarantee Payment Blockage Period may be commenced under this
Section 10.08(b) and no Payment Blockage Period may be commenced under Section
11.03(b) hereof until at least 180 consecutive days have elapsed from the last
day of the Initial Guarantee Blockage Period.
(c) In the event that, notwithstanding the foregoing, the Trustee or
the Holder of any Note shall have received any payment from a Guarantor
prohibited by the foregoing provisions of this Section 10.08, then and in such
event such payment shall be paid over and delivered forthwith to the Guarantor
Representative initiating the Guarantee Payment Blockage Period, in trust for
distribution to the holders of Guarantor Senior Indebtedness or, if no amounts
are then due in respect of Guarantor Senior Indebtedness, promptly returned to
the Guarantor, or as a court of competent jurisdiction shall direct.
Section 10.09. Subrogation to Rights of Holders of
Guarantor Senior Indebtedness.
Upon the payment in full of all amounts payable under or in respect
of all Guarantor Senior Indebtedness of a Guarantor, the Holders shall be
subrogated to the rights of the holders of such Guarantor Senior Indebtedness to
receive payments and distributions of cash, property and securities of such
Guarantor made on such Guarantor Senior Indebtedness until all amounts due to be
paid under the Guarantee shall be paid in full. For the purposes of such
subrogation, no payments or distributions to holders of Guarantor Senior
Indebtedness of any cash, property or securities to which Holders of the Notes
or the Trustee would be entitled except for the provisions of this Article 10,
and no payments over pursuant to the provisions of this Article 10 to holders of
Guarantor Senior Indebtedness by Holders of the Notes or the Trustee, shall, as
among each Guarantor, its creditors other than holders of Guarantor Senior
Indebtedness and the Holders of the Notes, be deemed to
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be a payment or distribution by such Guarantor to or on account of such
Guarantor Senior Indebtedness.
If any payment or distribution to which the Holders would otherwise
have been entitled but for the provisions of this Article 10 shall have been
applied, pursuant to the provisions of this Article 10, to the payment of all
amounts payable under Guarantor Senior Indebtedness, then and in such case, the
Holders shall be entitled to receive from the holders of such Guarantor Senior
Indebtedness at the time outstanding any payments or distributions received by
such holders of Guarantor Senior Indebtedness in excess of the amount sufficient
to pay all amounts payable under or in respect of such Guarantor Senior
Indebtedness in full in cash or Cash Equivalents.
Section 10.10. Guarantee Subordination Provisions
Solely To Define Relative Rights.
The subordination provisions of this Article 10 are and are intended
solely for the purpose of defining the relative rights of the Holders of the
Notes on the one hand and the holders of Guarantor Senior Indebtedness on the
other hand. Nothing contained in this Article 10 or elsewhere in this Indenture
or in the Notes is intended to or shall (a) impair, as among each Guarantor, its
creditors other than holders of its Guarantor Senior Indebtedness and the
Holders of the Notes, the obligation of such Guarantor, which is absolute and
unconditional, to make payments to the Holders in respect of its Obligations on
its Guarantee in accordance with its terms; or (b) affect the relative rights
against such Guarantor of the Holders of the Notes and creditors of such
Guarantor other than the holders of the Guarantor Senior Indebtedness; or (c)
prevent the Trustee or the Holder of any Note from exercising all remedies
otherwise permitted by applicable law upon a Default or an Event of Default
under this Indenture, subject to the rights, if any, under this Article 10 of
the holders of Guarantor Senior Indebtedness (1) in any case, proceeding,
dissolution, liquidation or other winding-up, assignment for the benefit of
creditors or other marshaling of assets and liabilities of the Company referred
to in Section 10.07 hereof, to receive, pursuant to and in accordance with such
Section, cash, property and securities otherwise payable or deliverable to the
Trustee or such Holder, or (2) under the conditions specified in Section 10.08
hereof, to prevent any payment prohibited by such Section or enforce their
rights pursuant to Section 10.08(c) hereof.
The failure by any Guarantor to make a payment in respect of its
obligations on its Guarantee by reason of any pro-
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vision of this Article 10 shall not be construed as preventing the occurrence
of a Default or an Event of Default hereunder.
Section 10.11. Application of Certain Article 11 Provisions.
The provisions of Sections 11.04, 11.07, 11.08, 11.09, 11.10, 11.12
and 11.13 hereof shall apply, mutatis mutandis, to each Guarantor and their
respective holders of Guarantor Senior Indebtedness and the rights, duties and
obligations set forth therein shall govern the rights, duties and obligations of
each Guarantor, the holders of Guarantor Senior Indebtedness, the Holders and
the Trustee with respect to the Guarantee and all references therein to Article
11 hereof shall mean this Article 10.
ARTICLE 11
SUBORDINATION OF NOTES
Section 11.01. Notes Subordinate to Senior
Indebtedness.
The Company covenants and agrees, and each Holder of Notes, by its
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article 11, the Indebtedness
represented by the Notes and the payment of the principal of, premium, if any,
and interest on the Notes are hereby expressly made subordinate and subject in
right of payment as provided in this Article 11 to the prior payment in full in
cash or Cash Equivalents or, as acceptable to the holders of Senior
Indebtedness, in any other manner, of all Senior Indebtedness.
This Article 11 shall constitute a continuing offer to all Persons
who, in reliance upon such provisions, become holders of or continue to hold
Senior Indebtedness; and such provisions are made for the benefit of the holders
of Senior Indebtedness; and such holders are made obligees hereunder and they or
each of them may enforce such provisions.
Section 11.02. Payment Over of Proceeds upon Dissolution, etc.
In the event of (a) any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to the Company or to its creditors,
as such, or to its
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assets, whether voluntary or involuntary or (b) any liquidation, dissolution or
other winding-up of the Company, whether voluntary or involuntary and whether
or not involving insolvency or bankruptcy, or (c) any general assignment for
the benefit of creditors or any other marshaling of assets or liabilities of
the Company, then and in any such event:
(1) the holders of Senior Indebtedness shall be entitled to receive
payment in full in cash or Cash Equivalents or, as acceptable to the
holders of Senior Indebtedness, in any other manner, of all amounts due
on or in respect of all Senior Indebtedness, or provision shall be made
for such payment, before the Holders of the Notes are entitled to receive
any payment or distribution of any kind or character on account of
principal of, premium, if any, or interest on the Notes; and
(2) any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, by set-off or
otherwise, to which the Holders or the Trustee would be entitled but for
the provisions of this Article 11 shall be paid by the liquidating
trustee or agent or other Person making such payment or distribution,
whether a trustee in bankruptcy, a receiver or liquidating trustee or
otherwise, directly to the holders of Senior Indebtedness or their
representative or representatives or to the trustee or trustees under any
indenture under which any instruments evidencing any of such Senior
Indebtedness may have been issued, ratably according to the aggregate
amounts remaining unpaid on account of the Senior Indebtedness held or
represented by each, to the extent necessary to make payment in full in
cash, Cash Equivalents or, as acceptable to the holders of Senior
Indebtedness, in any other manner, of all Senior Indebtedness remaining
unpaid, after giving effect to any concurrent payment or distribution, or
provision therefor, to the holders of such Senior Indebtedness; and
(3) in the event that, notwithstanding the foregoing provisions of
this Section 11.02, the Trustee or the Holder of any Note shall have
received any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, including, without
limitation, by way of set-off or otherwise, in respect of principal of,
premium, if any, and interest on the Notes before all Senior Indebtedness
is paid in full or payment thereof provided for, then and in such event
such payment or distribution shall be paid over or deliv-
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ered forthwith to the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee, agent or other Person making payment or
distribution of assets of the Company for application to the payment of
all Senior Indebtedness remaining unpaid, to the extent necessary to pay
all Senior Indebtedness in full in cash, Cash Equivalents or, as
acceptable to the holders of Senior Indebtedness, any other manner, after
giving effect to any concurrent payment or distribution, or provision
therefor, to or for the holders of Senior Indebtedness.
The consolidation of the Company with, or the merger of the Company
with or into, another Person or the liquidation or dissolution of the Company
following the conveyance, transfer or lease of its properties and assets
substantially as an entirety to another Person upon the terms and conditions set
forth in Article 5 hereof shall not be deemed a dissolution, winding-up,
liquidation, reorganization, assignment for the benefit of creditors or
marshaling of assets and liabilities of the Company for the purposes of this
Article 11 if the Person formed by such consolidation or the surviving entity of
such merger or the Person which acquires by conveyance, transfer or lease such
properties and assets substantially as an entirety, as the case may be, shall,
as a part of such consolidation, merger, conveyance, transfer or lease, comply
with the conditions set forth in such Article 5 hereof.
Section 11.03. Suspension of Payment When Senior
Indebtedness in Default.
(a) Unless Section 11.02 hereof shall be applicable, after the
occurrence of a Payment Default no payment or distribution of any assets or
securities of the Company or any Restricted Subsidiary of any kind or character
(including, without limitation, cash, property and any payment or distribution
which may be payable or deliverable by reason of the payment of any other
Indebtedness of the Company being subordinated to the payment of the Notes by
the Company) may be made by or on behalf of the Company or any Restricted
Subsidiary, including, without limitation, by way of set-off or otherwise, for
or on account of principal of, premium, if any, or interest on the Notes, or for
or on account of the purchase, redemption or other acquisition of the Notes, and
neither the Trustee nor any holder or owner of any Notes shall take or receive
from the Company or any Restricted Subsidiary, directly or indirectly in any
manner, payment in respect of all or any portion of Notes following the delivery
by the representative of , for so long as there shall exist any Designated
Senior Indebtedness under
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or in respect of the Credit Agreement, the holders of Designated Senior
Indebtedness under or in respect of the Credit Agreement or, thereafter, the
holders of Designated Senior Indebtedness (in either such case, the
"Representative") to the Trustee of written notice of (i) the occurrence of a
Payment Default or Designated Senior Indebtedness or (ii) the occurrence of a
Non-Payment Event of Default on Designated Senior Indebtedness and the
acceleration of the maturity of Designated Senior Indebtedness in accordance
with its terms, and in any such event, such prohibition shall continue until
such Payment Default is cured, waived in writing or ceases to exist or such
acceleration has been rescinded or otherwise cured. At such time as the
prohibition set forth in the preceding sentence shall no longer be in effect,
subject to the provisions of the following paragraph (b), the Company shall
resume making any and all required payments in respect of the Notes, including
any missed payments.
(b) Unless Section 11.02 hereof shall be applicable, upon the
occurrence of a Non-Payment Event of Default on Designated Senior Indebtedness,
no payment or distribution of any assets or securities of the Company of any
kind or character (including, without limitation, cash, property and any payment
or distribution which may be payable or deliverable by reason of the payment of
any other Indebtedness of the Company being subordinated to the payment of the
Notes by the Company) shall be made by or on behalf of the Company, including,
without limitation, by way of set-off or otherwise, on account of any principal
of, premium, if any, or interest on the Notes or on account of the purchase,
redemption, defeasance or other acquisition of Notes, and neither the Trustee
nor any holder or owner of any Notes shall take or receive from the Company,
directly or indirectly in any manner, payment in respect of all or any portion
of the Notes, for a period ("Payment Blockage Period") commencing on the date of
receipt by the Trustee of written notice from the Representative of such
Non-Payment Event of Default unless and until (subject to any blockage of
payments that may then be in effect under the preceding paragraph (a)) the
earliest to occur of the following events: (x) more than 179 days shall have
elapsed since the date of receipt of such written notice by the Trustee, (y)
such Non-Payment Event of Default shall have been cured or waived in writing or
shall have ceased to exist or such Designated Senior Indebtedness shall have
been discharged or paid in full in cash or Cash Equivalents or (z) such Payment
Blockage Period shall have been terminated by written notice to the Company or
the Trustee from the Representative initiating such Payment Blockage Period, or
the holders of at least a majority in principal
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amount of such issue of Designated Senior Indebtedness, after which, in the
case of clause (x), (y) or (z), the Company shall resume making any and all
required payments in respect of the Notes, including any missed payments.
Notwithstanding any other provisions of this Indenture, no Non-Payment Event of
Default with respect to Designated Senior Indebtedness which existed or was
continuing on the date of the commencement of any Payment Blockage Period
initiated by the Representative shall be, or be made, the basis for the
commencement of a second Payment Blockage Period initiated by the
Representative unless such event of default shall have been cured or waived for
a period of not less than 90 consecutive days. In no event shall a Payment
Blockage Period extend beyond 179 days from the date of the receipt by the
Trustee of the notice referred to in this Section 11.03(b) (the "Initial
Blockage Period"). Any number of additional Payment Blockage Periods may be
commenced during the Initial Blockage Period; provided, however, that no such
additional Payment Blockage Period shall extend beyond the Initial Blockage
Period. After the expiration of the Initial Blockage Period, no Payment
Blockage Period may be commenced under this Section 11.03(b) and no Guarantee
Payment Blockage Period may be commenced under Section 10.08(b) hereof until at
least 180 consecutive days have elapsed from the last day of the Initial
Blockage Period.
(c) In the event that, notwithstanding the foregoing, the Trustee or
the Holder of any Note shall have received any payment prohibited by the
foregoing provisions of this Section 11.03, then and in such event such payment
shall be paid over and delivered forthwith to the Representative initiating the
Payment Blockage Period, in trust for distribution to the holders of Senior
Indebtedness or, if no amounts are then due in respect of Senior Indebtedness,
promptly returned to the Company, or otherwise as a court of competent
jurisdiction shall direct.
Section 11.04. Trustee's Relation to Senior
Indebtedness.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article 11, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and the Trustee shall
not be liable to any holder of Senior Indebtedness if it shall mistakenly pay
over or de-
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liver to Holders, the Company or any other Person moneys or assets to which any
holder of Senior Indebtedness shall be entitled by virtue of this Article 11 or
otherwise.
Section 11.05. Subrogation to Rights of Holders of
Senior Indebtedness.
Upon the payment in full of all Senior Indebtedness, the Holders of
the Notes shall be subrogated to the rights of the holders of such Senior
Indebtedness to receive payments and distributions of cash, property and
securities applicable to the Senior Indebtedness until the principal of,
premium, if any and interest on the Notes shall be paid in full. For purposes
of such subrogation, no payments or distributions to the holders of Senior
Indebtedness of any cash, property or securities to which the Holders of the
Notes or the Trustee would be entitled except for the provisions of this Article
11, and no payments over pursuant to the provisions of this Article 11 to the
holders of Senior Indebtedness by Holders of the Notes or the Trustee, shall, as
among the Company, its creditors other than holders of Senior Indebtedness and
the Holders of the Notes, be deemed to be a payment or distribution by the
Company to or on account of the Senior Indebtedness.
If any payment or distribution to which the Holders would otherwise
have been entitled but for the provisions of this Article 11 shall have been
applied, pursuant to the provisions of this Article 11, to the payment of all
amounts payable under the Senior Indebtedness of the Company, then and in such
case the Holders shall be entitled to receive from the holders of such Senior
Indebtedness at the time outstanding any payments or distributions received by
such holders of such Senior Indebtedness in excess of the amount sufficient to
pay all amounts payable under or in respect of such Senior Indebtedness in full
in cash or Cash Equivalents.
Section 11.06. Provisions Solely To Define Relative
Rights.
The provisions of this Article 11 are and are intended solely for
the purpose of defining the relative rights of the Holders of the Notes on the
one hand and the holders of Senior Indebtedness on the other hand. Nothing
contained in this Article or elsewhere in this Indenture or in the Notes is
intended to or shall (a) impair, as among the Company, its creditors other than
holders of Senior Indebtedness and the Holders of the Notes, the obligation of
the Company, which is absolute and unconditional, to pay to the Holders of the
Notes
<PAGE> 108
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the principal of, premium, if any, and interest on the Notes as and when the
same shall become due and payable in accordance with their terms; or (b) affect
the relative rights against the Company of the Holders of the Notes and
creditors of the Company other than the holders of Senior Indebtedness; or (c)
prevent the Trustee or the Holder of any Note from exercising all remedies
otherwise permitted by applicable law upon a Default or an Event of Default
under this Indenture, subject to the rights, if any, under this Article 11 of
the holders of Senior Indebtedness (1) in any case, proceeding, dissolution,
liquidation or other winding-up, assignment for the benefit of creditors or
other marshaling of assets and liabilities of the Company referred to in
Section 11.02 hereof, to receive, pursuant to and in accordance with such
Section, cash, property and securities otherwise payable or deliverable to the
Trustee or such Holder, or (2) under the conditions specified in Section 11.03,
to prevent any payment prohibited by such Section or enforce their rights
pursuant to Section 11.03(c) hereof.
The failure to make a payment on account of principal of, premium,
if any, or interest on the Notes by reason of any provision of this Article 11
shall not be construed as preventing the occurrence of a Default or an Event of
Default hereunder.
Section 11.07. Trustee To Effectuate Subordination.
Each Holder of a Note by his acceptance thereof authorizes and
directs the Trustee on his behalf to take, in the Trustee's sole discretion,
such action as may be necessary or appropriate to effectuate the subordination
provided in this Article and appoints the Trustee his attorney-in-fact for any
and all such purposes, including, in the event of any dissolution, winding-up,
liquidation or reorganization of the Company whether in bankruptcy, insolvency,
receivership proceedings, or otherwise, the timely filing of a claim for the
unpaid balance of the indebtedness of the Company owing to such Holder in the
form required in such proceedings and the causing of such claim to be approved.
If the Trustee does not file such a claim prior to 30 days before the expiration
of the time to file such a claim, the holders of Senior Indebtedness, or any
Representative, may file such a claim on behalf of Holders of the Notes.
Section 11.08. No Waiver of Subordination
Provisions.
(a) No right of any present or future holder of any Senior
Indebtedness to enforce subordination as herein provided
<PAGE> 109
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shall at any time in any way be prejudiced or impaired by any act or failure to
act on the part of the Company or by any act or failure to act, in good faith,
by any such holder, or by any non-compliance by the Company with the terms,
provisions and covenants of this Indenture, regardless of any knowledge thereof
any such holder may have or be otherwise charged with.
(b) Without limiting the generality of subsection (a) of this
Section 11.08, the holders of Senior Indebtedness may, at any time and from time
to time, without the consent of or notice to the Trustee or the Holders of the
Notes, without incurring responsibility to the Holders of the Notes and without
impairing or releasing the subordination provided in this Article 11 or the
obligations hereunder of the Holders of the Notes to the holders of Senior
Indebtedness, do any one or more of the following: (1) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, Senior
Indebtedness or any instrument evidencing the same or any agreement under which
Senior Indebtedness is outstanding; (2) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (3) release any Person liable in any manner for the collection or
payment of Senior Indebtedness; and (4) exercise or refrain from exercising any
rights against the Company and any other Person; provided, however, that in no
event shall any such actions limit the right of the Trustee or the Holders of
the Notes to take any action to accelerate the maturity of the Notes pursuant to
Article 6 hereof or to pursue any rights or remedies hereunder or under
applicable laws if the taking of such action does not otherwise violate the
terms of this Indenture.
Section 11.09. Notice to Trustee.
(a) The Company shall give prompt written notice to the Trustee of
any fact known to the Company which would prohibit the making of any payment to
or by the Trustee at its Corporate Trust Office in respect of the Notes.
Notwithstanding the provisions of this Article 11 or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts which would prohibit the making of any payment to or by the Trustee in
respect of the Notes, unless and until the Trustee shall have received written
notice thereof from the Company or a holder of Senior Indebtedness or from any
trustee, fiduciary or agent therefor; and, prior to the receipt of any such
written notice, the Trustee, subject to the provisions of this Section 11.09,
shall be entitled in all respects to assume that no such facts exist.
<PAGE> 110
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(b) Subject to the provisions of Section 7.01 hereof, the Trustee
shall be entitled to rely on the delivery to it of a written notice to the
Trustee and the Company by a Person representing itself to be a holder of Senior
Indebtedness (or a trustee, fiduciary or agent therefor) to establish that such
notice has been given by a holder of Senior Indebtedness (or a trustee,
fiduciary or agent therefor); provided, however, that failure to give such
notice to the Company shall not affect in any way the right of the Trustee to
rely on such notice. In the event that the Trustee determines in good faith
that further evidence is required with respect to the right of any Person as a
holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Article 11, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article 11, and if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
Section 11.10. Reliance on Judicial Order or
Certificate of Liquidating Agent.
Upon any payment or distribution of assets of the Company referred
to in this Article 11, the Trustee, subject to the provisions of Section 7.01
hereof, and the Holders shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding-up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit
of creditors, agent or other Person making such payment or distribution,
delivered to the Trustee or to the Holders, for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders of
Senior Indebtedness 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 11.
<PAGE> 111
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Section 11.11. Rights of Trustee as a Holder of
Senior Indebtedness; Preservation of
Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article 11 with respect to any Senior Indebtedness
which may at any time be held by it, to the same extent as any other holder of
Senior Indebtedness, and nothing in this Indenture shall deprive the Trustee of
any of its rights as such holder. Nothing in this Article 11 shall apply to
claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof.
Section 11.12. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall
have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article 11 shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article 11 in addition to or in place of the Trustee.
Section 11.13. No Suspension of Remedies.
Nothing contained in this Article 11 shall limit the right of the
Trustee or the Holders of Notes to take any action to accelerate the maturity of
the Notes pursuant to Article 6 or to pursue any rights or remedies hereunder or
under applicable law, subject to the rights, if any, under this Article 11 of
the holders, from time to time, of Senior Indebtedness.
ARTICLE 12
MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts
with another provision which is required to be included in this Indenture by the
TIA, the required provision shall control.
Section 12.02. Notices.
Any notice or communication shall be given in writing and delivered
in person, sent by facsimile, delivered by com-
<PAGE> 112
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mercial courier service or mailed by first-class mail, postage prepaid,
addressed as follows:
If to the Company or any Guarantor:
Hayes Wheels International, Inc.
38481 Huron River Drive
Romulus, Michigan 48174
Attention: Chief Financial Officer
Copy to: Skadden, Arps, Slate, Meagher & Flom
One Rodney Square
Wilmington, Delaware 19801
Attention: Robert B. Pincus, Esq.
If to the Trustee:
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Attention: Denise Leonard
Fax Number: (212) 815-5915
The Company, the Guarantors or the Trustee by written notice to the
others may designate additional or different addresses for subsequent notices or
communications. Any notice or communication to the Company, the Trustee, or the
Guarantors shall be deemed to have been given or made as of the date so
delivered if personally delivered; when receipt is acknowledged, if telecopied;
and five (5) calendar days after mailing if sent by registered or certified
mail, postage prepaid (except that a notice of change of address shall not be
deemed to have been given until actually received by the addressee).
Any notice or communication mailed to a Noteholder shall be mailed
to him by first-class mail, postage prepaid, at his address shown on the
register kept by the Registrar.
Failure to mail a notice or communication to a Noteholder or any
defect in it shall not affect its sufficiency with respect to other Noteholders.
If a notice or communication to a Noteholder is mailed in the manner provided
above, it shall be deemed duly given, whether or not the addressee receives it.
<PAGE> 113
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In case by reason of the suspension of regular mail service, or by
reason of any other cause, it shall be impossible to mail any notice as required
by this Indenture, then such method of notification as shall be made with the
approval of the Trustee shall constitute a sufficient mailing of such notice.
Section 12.03. Communications by Holders with Other
Holders.
Noteholders may communicate pursuant to TIA Section 312(b) with
other Noteholders with respect to their rights under this Indenture or the
Notes. The Company, the Guarantors, 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 or any Guarantor to
the Trustee to take any action under this Indenture, the Company shall furnish
to the Trustee:
(1) an Officers' Certificate (which shall include the statements set
forth in Section 12.05 below) 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 complied with;
and
(2) an Opinion of Counsel (which shall include the statements set
forth in Section 12.05 below) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been complied
with.
Section 12.05. Statements Required in Certificate
and Opinion.
Each certificate and opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements
<PAGE> 114
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or opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, it or he has
made such examination or investigation as is necessary to enable it or
him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such Person,
such covenant or condition has been complied with.
Section 12.06. When Treasury Notes Disregarded.
In determining whether the Holders of the required aggregate
principal amount of Notes have concurred in any direction, waiver or consent,
Notes owned by the Company, any Guarantor or any other obligor on the Notes or
by any Affiliate of any of them shall be disregarded, except that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Notes which a Trust Officer of the
Trustee actually knows are so owned shall be so disregarded. Notes so owned
which have been pledged in good faith shall not be disregarded if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to the Notes and that the pledgee is not the Company, a Guarantor
or any other obligor upon the Notes or any Affiliate of any of them.
Section 12.07. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at meetings
of Noteholders. The Registrar and Paying Agent may make reasonable rules for
their functions.
Section 12.08. Business Days; Legal Holidays.
A "Business Day" is a day that is not a Legal Holiday. A "Legal
Holiday" is a Saturday, a Sunday, a federally-recognized holiday or a day on
which banking institutions are not required to be open in the State of New York.
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 for the intervening period.
<PAGE> 115
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Section 12.09. Governing Law.
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE NOTES.
Section 12.10. No Adverse Interpretation of Other
Agreements.
This Indenture may not be used to interpret another indenture, loan,
security or debt agreement of the Company or any Subsidiary thereof. No such
indenture, loan, security or debt agreement may be used to interpret this
Indenture.
Section 12.11. No Recourse Against Others.
A director, officer, employee, stockholder or incorporator, as such,
of the Company shall not have any liability for any obligations of the Company
under the Notes or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creations. Each Noteholder by accepting a
Note waives and releases all such liability. Such waiver and release are part
of the consideration for the issuance of the Notes.
Section 12.12. Successors.
All agreements of the Company and the Guarantors in this Indenture
and the Notes shall bind their respective successors. All agreements of the
Trustee, any additional trustee and any Paying Agents in this Indenture shall
bind its successor.
Section 12.13. Multiple Counterparts.
The parties may sign multiple counterparts of this Indenture. Each
signed counterpart shall be deemed an original, but all of them together
represent one and the same agreement.
<PAGE> 116
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Section 12.14. Table of Contents, Headings, etc.
The table of contents, cross-reference sheet and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
Section 12.15. Separability.
Each provision of this Indenture shall be considered separable and
if for any reason any provision which is not essential to the effectuation of
the basic purpose of this Indenture or 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.
<PAGE> 117
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IN WITNESS WHEREOF, the parties have caused this Indenture to be
duly executed, and the Company's corporate seal to be hereunto affixed and
attested, all as of the date and year first written above.
HAYES WHEELS INTERNATIONAL, INC.
By:
--------------------------------
Name:
Title:
ATTEST:
- -------------------------
Name:
Title:
Guarantors:
HAYES WHEELS INTERNATIONAL CALIFORNIA, INC.
HAYES WHEELS INTERNATIONAL GEORGIA, INC.
HAYES WHEELS INTERNATIONAL INDIANA, INC.
HAYES WHEELS INTERNATIONAL MEXICO, INC.
HAYES WHEELS INTERNATIONAL MICHIGAN, INC.
MOTOR WHEEL CORPORATION
MWC ACQUISITION SUB, INC.
By:
--------------------------------
Name:
Title:
ATTEST:
- ---------------------------
Name:
Title:
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THE BANK OF NEW YORK
as Trustee
By:
----------------------------
Name:
Title:
<PAGE> 119
EXHIBIT A
[FORM OF FACE OF NOTE]
CUSIP
HAYES WHEELS INTERNATIONAL, INC.
No. [ ] $
9 1/8% SENIOR SUBORDINATED NOTE DUE 2007
HAYES WHEELS INTERNATIONAL, INC., a Delaware corporation (the
"Company", which term includes any successor corporation), for value received,
promises to pay to or registered assigns the principal sum of $
dollars on July 15, 2007.
Interest Payment Dates: January 15 and July 15, commencing January 15, 1998
Record Dates: January 1 and July 1.
Reference is made to the further provisions of this Note contained
herein, which will for all purposes have the same effect as if set forth at this
place.
A-1
<PAGE> 120
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers.
HAYES WHEELS INTERNATIONAL, INC.
By:
------------------------------
Title:
By:
------------------------------
Title:
Certificate of Authentication
This is one of the 9 1/8% Senior Subordinated Notes due 2007
referred to in the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK,
as Trustee
By:
--------------------------
Authorized Signatory
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[FORM OF REVERSE OF NOTE]
HAYES WHEELS INTERNATIONAL, INC.
9 1/8% SENIOR SUBORDINATED NOTE DUE 2007
1. Interest. Hayes Wheels International, Inc., a Delaware
corporation (the "Company"), promises to pay, interest on the principal amount
set forth on the face hereof at a rate of 9 1/8% per annum. Interest hereon
will accrue from and including the most recent date to which interest has been
paid or, if no interest has been paid, from and including July 15, 1997 to but
excluding the date on which interest is paid. Interest shall be payable in
arrears on each January 15 and July 15 commencing January 15, 1998. Interest
will be computed on the basis of a 360-day year of twelve 30-day months. The
Company shall pay interest on overdue principal and on overdue interest (to the
full extent permitted by law) at a rate equal to the rate of interest otherwise
payable on the Notes.
2. Method of Payment. The Company will pay interest hereon (except
defaulted interest) to the Persons who are registered holders (the "Holders") at
the close of business on January 1 or July 1 next preceding the interest payment
date (whether or not a Business Day). Holders must surrender Notes to a Paying
Agent to collect principal payments. The Company will pay principal and
interest in money of the United States of America that at the time of payment is
legal tender for payment of public and private debts. Interest may be paid by
check mailed to the Holder entitled thereto at the address indicated on the
register maintained by the Registrar for the Notes.
3. Paying Agent and Registrar. Initially, The Bank of New York (the
"Trustee") will act as a Paying Agent and Registrar. The Company may change any
Paying Agent or Registrar without notice to the Holders. Neither the Company
nor any of its Affiliates may act as Paying Agent or Registrar.
4. Indenture. The Company issued the Notes under an Indenture dated
as of July 15, 1997 (the "Indenture") among the Company, the Guarantors (as
defined in the Indenture) and the Trustee. This is one of an issue of Notes of
the Company issued, or to be issued, under the Indenture. 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 (15 U.S. Code Section Section
77aaa-77bbbb), as amended from time to time. The Notes are subject to all such
terms, and Holders are
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<PAGE> 122
referred to the Indenture and such Act for a statement of them. Capitalized
and certain other terms used herein and not otherwise defined have the meanings
set forth in the Indenture. The Notes are obligations of the Company limited
in aggregate principal amount to $150.0 million.
5. Optional Redemption. The Notes will be redeemable at the option
of the Company, in whole or in part, at any time on or after July 15, 2002 upon
not less than 30 nor more than 60 days' notice, at the redemption prices
(expressed as percentages of principal amount), set forth below, together, in
each case, with accrued and unpaid interest to the Redemption Date, if redeemed
during the twelve month period beginning on July 15 of each year listed below:
<TABLE>
<CAPTION>
Year Redemption Price
---- ----------------
<S> <C>
2002 ............................................. 104.563%
2003 ............................................. 103.042%
2004 ............................................. 101.521%
2005 and thereafter .............................. 100.000%
</TABLE>
Notwithstanding the foregoing, the Company may redeem in the
aggregate up to 35% of the original principal amount of Notes at any time and
from time to time on or prior to July 15, 2000 at a redemption price equal to
109.125% of the aggregate principal amount so redeemed, plus accrued and unpaid
interest thereon to the Redemption Date with the Net Proceeds of one or more
Equity Offerings; provided, that at least $97.5 million of the principal amount
of Notes originally issued remains outstanding immediately after the occurrence
of any such redemption and that any such redemption occurs within 60 days
following the closing of any such Equity Offering.
6. 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 his registered address. On and after
the Redemption Date, unless the Company defaults in making the redemption
payment, interest ceases to accrue on Notes or portions thereof called for
redemption.
7. Offers to Purchase. The Indenture provides that upon the
occurrence of a Change of Control or an Asset Sale and subject to further
limitations contained therein, the Company shall make an offer to purchase
outstanding Notes in accordance with the procedures set forth in the Indenture.
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<PAGE> 123
8. Registration Rights. Pursuant to a Registration Rights Agreement
among the Company, the Guarantors and the Initial Purchasers, the Company will
be obligated to consummate an exchange offer pursuant to which the Holders shall
have the right to exchange this Note for notes of a separate series issued under
the Indenture (or a trust indenture substantially identical to the Indenture in
accordance with the terms of the Registration Rights Agreement) which have been
registered under the Securities Act, in like principal amount and having
identical terms in all material respects as the Notes. The Holders shall be
entitled to receive certain additional interest payments in the event such
exchange offer is not consummated and upon certain other conditions, all
pursuant to and in accordance with the terms of the Registration Rights
Agreement.
9. Denominations, Transfer, Exchange. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. A Holder may transfer or exchange Notes in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay to it any taxes and
fees required by law or permitted by the Indenture. The Registrar need not
register the transfer of or exchange any Notes or portion of a Note selected for
redemption, or register the transfer of or exchange any Notes for a period of 15
days before a mailing of notice of redemption.
10. Persons Deemed Owners. The registered Holder of this Note may
be treated as the owner of this Note for all purposes.
11. Unclaimed Money. If money for the payment of principal or
interest remains unclaimed for two years, the Trustee will pay the money back to
the Company at its written request. After that, Holders entitled to the money
must look to the Company for payment as general creditors unless an "abandoned
property" law designates another Person.
12. Amendment, Supplement, Waiver, Etc. The Company, the Guarantors
and the Trustee (if a party thereto) may, without the consent of the Holders of
any outstanding Notes, amend, waive or supplement the Indenture or the Notes for
certain specified purposes, including, among other things, curing ambiguities,
defects or inconsistencies, maintaining the qualification of the Indenture under
the Trust Indenture Act of 1939, as amended, and making any change that does not
materially and adversely affect the rights of any Holder. Other amendments and
modifications of the Indenture or the Notes may
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<PAGE> 124
be made by the Company, the Guarantors and the Trustee with the consent of the
Holders of not less than a majority of the aggregate principal amount of the
outstanding Notes, subject to certain exceptions requiring the consent of the
Holders of the particular Notes to be affected.
13. Restrictive Covenants. The Indenture imposes certain
limitations on the ability of the Company and its Restricted Subsidiaries to,
among other things: (i) incur additional Indebtedness; (ii) pay dividends and
make distributions; (iii) issue stock of subsidiaries; (iv) make certain
investments; (v) repurchase stock; (vi) create liens; (vii) enter into
transactions with affiliates; (viii) merge or consolidate the Company or the
Guarantors; and (ix) transfer or sell assets. Such limitations are subject to a
number of important qualifications and exceptions. Pursuant to Section 4.04 of
the Indenture, the Company must annually report to the Trustee on compliance
with such limitations.
14. Successor Corporation. When a successor corporation assumes all
the obligations of its predecessor under the Notes and the Indenture and the
transaction complies with the terms of Article 5 of the Indenture, the
predecessor corporation will, except as provided in Article 5, be released from
those obligations.
15. Defaults and Remedies. Events of Default are set forth in the
Indenture. Subject to certain limitations in the Indenture, if an Event of
Default (other than an Event of Default specified in Section 6.01(6) or (7) of
the Indenture with respect to the Company) occurs and is continuing, the Trustee
or the Holders of not less than 25% in aggregate principal amount of the
outstanding Notes may, by written notice to the Trustee and the Company, and the
Trustee upon the request of the Holders of not less than 25% in aggregate
principal amount of the outstanding Notes shall, declare all principal of and
accrued interest on all Notes to be immediately due and payable and (i) such
amounts shall become immediately due and payable or (ii) if there are any
amounts outstanding under or in respect of the Amended Credit Agreement, such
amounts shall become due and payable upon the first to occur of an acceleration
of amounts outstanding under or in respect of the Amended Credit Agreement or
five Business Days after receipt by the Company and the representative of the
holders of Indebtedness under or in respect of the Amended Credit Agreement, of
notice of the acceleration of the Notes. If an Event of Default specified in
Section 6.01(6) or (7) of the Indenture occurs with respect to the Company, the
principal amount of and inter-
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<PAGE> 125
est on, all Notes shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder.
Holders may not enforce the Indenture or the Notes except as provided in the
Indenture. The Trustee may require indemnity satisfactory to it before it
enforces the Indenture or the Notes. Subject to certain limitations, 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 notice of any continuing default (except a default in payment of
principal or interest) if it determines that withholding notice is in their
interests. The Company and each Guarantor must furnish an annual compliance
certificate to the Trustee.
16. 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 Trustee.
17. No Recourse Against Others. No director, officer, employee
incorporator or stockholder, of the Company or any Guarantor shall have any
liability for any obligations of the Company or the Guarantors under the Notes,
the Indenture or the Guarantees or for a 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 the issuance of the Notes.
18. Discharge. The Company's obligations pursuant to the Indenture
will be discharged, except for obligations pursuant to certain sections thereof,
subject to the terms of the Indenture, upon the payment of all the Notes or upon
the irrevocable deposit with the Trustee of United States dollars sufficient to
pay when due principal of and interest on the Notes to maturity or redemption,
as the case may be.
19. Guarantees. The Note will be entitled to the benefits of
certain Guarantees made for the benefit of the Holders. Reference is hereby
made to the Indenture for a statement of the respective rights, limitations of
rights, duties and obligations thereunder of the Guarantors, the Trustee and the
Holders.
20. Authentication. This Note shall not be valid until the Trustee
signs the certificate of authentication on the other side of this Note.
A-7
<PAGE> 126
21. Governing Law. THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL
GOVERN THIS NOTE WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS. The Trustee,
the Company, the Guarantor and the Holders agree to submit to the jurisdiction
of the courts of the State of New York in any action or proceeding arising out
of or relating to the Indenture or the Notes.
22. Abbreviations. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TENANT (=
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).
23. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Issuers has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to the 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.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture and Registration Rights Agreement.
Requests may be made to:
HAYES WHEELS INTERNATIONAL, INC.
38481 Huron River Drive
Romulus, Michigan 48174
Attention: Chief Financial Officer
A-8
<PAGE> 127
ASSIGNMENT
I or we assign and transfer this Note to:
(Insert assignee's social security or tax I.D. number)
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
(Print or type name, address and zip code of assignee)
and irrevocably appoint:
______________________________________________________________________
______________________________________________________________________
Agent to transfer this Note on the books of the Company. The Agent may
substitute another to act for him.
Date: ___________
Signature:
_______________________________
(Sign exactly as your name appears on the
face of this Note)
Signature Guarantee:
A-9
<PAGE> 128
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have all or any part of this Note purchased
by the Company pursuant to Section 4.15 or Section 4.20 of the Indenture, check
the appropriate box:
Section 4.15 Section 4.20
If you want to have only part of the Note purchased by the Company
pursuant to Section 4.15 or Section 4.20 of the Indenture, state the amount you
elect to have purchased:
$____________________
(multiple of $1,000)
Date: ________________
Your Signature: _____________________________
(Sign exactly as your name appears on the face
of this Note)
_________________________
Signature Guaranteed
A-10
<PAGE> 129
EXHIBIT B
[FORM OF PRIVATE PLACEMENT LEGEND]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS
SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A)
IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE ACT)
OR (B) IT IS AN "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3)
OR (7) UNDER THE ACT) (AN "ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON
AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL
NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS NOTE RESELL OR
OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY
THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE ACT, (C) INSIDE THE UNITED STATES TO AN
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED
ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS
ON TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE
TRUSTEE), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE ACT, (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE ACT (IF AVAILABLE) OR (F) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, AND (3) AGREES THAT IT
WILL GIVE TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF
THIS NOTE WITHIN TWO YEARS AFTER ORIGINAL ISSUANCE OF THIS NOTE, IF THE
PROPOSED TRANSFEREE IS AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM OR IN A
TRANSACTION NOT SUBJECT TO THE REGISTRATION REQUIREMENTS OF THE ACT. AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON"
HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE ACT.
B-1
<PAGE> 130
EXHIBIT C-1
[FORM OF ASSIGNMENT FOR 144A NOTE]
I or we assign and transfer this Note to:
(Insert assignee's social security or tax I.D. number)
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
(Print or type name, address and zip code of assignee)
and irrevocably appoint:
________________________________________________________________________
________________________________________________________________________
Agent to transfer this Note on the books of the Company. The Agent may
substitute another to act for him.
[Check One]
[ ] (a) this Note is being transferred in compliance with the exemption
from registration under the Securities Act provided by Rule 144A
thereunder.
or
[ ] (b) this Note is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Note and the Indenture.
If none of the foregoing boxes is checked, the Trustee or Registrar shall not
be obligated to register this Note in the name of any person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.15 of the Indenture shall have
been satisfied.
Date:__________________ Your Signature:______________________
________________________________
(Sign exactly as your name
appears on the other side of
this Note)
Signature Guarantee: ________________________________
C-1-1
<PAGE> 131
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated: __________________ ____________________________
NOTICE: To be executed by
an executive officer
C-1-2
<PAGE> 132
EXHIBIT C-2
[FORM OF ASSIGNMENT FOR REGULATION S NOTE]
I or we assign and transfer this Note to:
(Insert assignee's social security or tax I.D. number)
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
(Print or type name, address and zip code of assignee)
and irrevocably appoint:
________________________________________________________________________
________________________________________________________________________
Agent to transfer this Note on the books of the Company. The Agent may
substitute another to act for him.
[Check One]
[ ] (a) this Note is being transferred in compliance with the exemption
from registration under the Securities Act provided by Rule 144A
thereunder.
or
[ ] (b) this Note is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Note and the Indenture.
If none of the foregoing boxes is checked, the Trustee or Registrar shall not
be obligated to register this Note in the name of any person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.15 of the Indenture shall have
been satisfied.
Date: __________________ Your Signature: ________________
_________________________________
(Sign exactly as your name
appears on the other side of
this Note)
Signature Guarantee: ____________________________________
C-2-1
<PAGE> 133
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated: __________________ ________________________
NOTICE: To be executed by
an executive officer
C-2-2
<PAGE> 134
EXHIBIT D
[FORM OF LEGEND FOR GLOBAL NOTE]
Any Global Note authenticated and delivered hereunder shall bear a
legend (which would be in addition to any other legends required in the case of
a Restricted Note) in substantially the following form:
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY. THIS NOTE IS NOT EXCHANGEABLE FOR NOTES REGISTERED IN
THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS NOTE
(OTHER THAN A TRANSFER OF THIS NOTE AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF
THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY (A NEW YORK CORPORATION) ("DTC") TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
D-1
<PAGE> 135
EXHIBIT E
Form of Certificate to Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
___________, ____
[Trustee]
[Address]
Attention:
Re: Hayes Wheels International, Inc. (the "Company")
9 1/8% Senior Notes due 2007 (the "Notes")
Dear Sirs:
In connection with our proposed purchase of Notes, we confirm that:
1. We understand that any subsequent transfer of the Notes is
subject to certain restrictions and conditions set forth in the Indenture
dated as of July 15, 1997 relating to the Notes and we agree to be bound
by, and not to resell, pledge or otherwise transfer the Notes except in
compliance with, such restrictions and conditions and the Securities Act of
1933, as amended (the "Securities Act").
2. We understand that the Notes have not been registered under
the Securities Act or any other applicable securities laws, have not been
and will not be qualified for sale under the securities laws of any
non-U.S. jurisdiction, and that the Notes may not be offered, sold, pledged
or otherwise transferred except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are
acting as hereinafter stated, that if we should sell any Notes, we will do
so only (i) to the Company or any subsidiary thereof, (ii) in accordance
with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined in Rule 144A), (iii) 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 a signed letter
containing certain representations and
E-1
<PAGE> 136
agreements relating to the restrictions on transfer of the Notes, (iv)
outside the United States to foreign purchasers in offshore transactions
meeting the requirements of Rule 904 of Regulation S under the Securities
Act, (v) pursuant to the exemption from registration provided by Rule 144
under the Securities Act (if available), or (vi) pursuant to an effective
registration statement under the Securities Act, and we further agree to
provide to any person purchasing any of the Notes from us a notice
advising such purchaser that resales of the Notes are restricted as
stated herein.
3. We understand that, on any proposed resale of any Notes, 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) 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 each are able to
bear the economic risk of our or their investment, as the case may be.
5. We are acquiring the Notes purchased by us for our account or for
one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
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 proceeding or official inquiry with respect
to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By: ____________________
Authorized Signature
E-2
<PAGE> 137
EXHIBIT F
Form of Certificate to Be Delivered
in Connection with Transfers
Pursuant to Regulation S
__________, ____
[Trustee]
[Address]
Attention:
Re: Hayes Wheels International, Inc.
(the "Company") 9 1/8% Senior Notes
due 2007 (the "Notes")
Dear Sirs:
In connection with our proposed sale of $__________ aggregate
principal amount of the Notes, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the U.S. Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Notes was not made to a U.S. person or to a
person in the United States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
F-1
<PAGE> 138
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Notes.
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. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By: __________________________
Authorized Signature
F-2
<PAGE> 139
EXHIBIT G
[FORM OF GUARANTEE]
Each of the undersigned (the "Guarantors") hereby jointly and
severally unconditionally guarantees, to the extent set forth in the Indenture
dated as of July 15, 1997 by and among Hayes Wheels International, Inc., as
issuer, the Guarantors, as guarantors, and The Bank of New York, as Trustee (as
amended, restated or supplemented from time to time, the "Indenture"), and
subject to the provisions of the Indenture, (a) the due and punctual payment of
the principal of, and premium, if any, and interest on the Notes, when and as
the same shall become due and payable, whether at maturity, by acceleration or
otherwise, the due and punctual payment of interest on overdue principal,
premium and, to the extent permitted by law, interest, and the due and punctual
performance of all other obligations of the Company to the Noteholders or the
Trustee, all in accordance with the terms set forth in Article 10 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 Noteholders and to the
Trustee pursuant to this Guarantee and the Indenture are expressly set forth in
Article 10 of the Indenture and reference is hereby made to the Indenture for
the precise terms and limitations of this Guarantee.
HAYES WHEELS INTERNATIONAL-
CALIFORNIA, INC.
HAYES WHEELS INTERNATIONAL-
GEORGIA, INC.
HAYES WHEELS INTERNATIONAL-
INDIANA, INC.
HAYES WHEELS INTERNATIONAL-
MEXICO, INC.
HAYES WHEELS INTERNATIONAL-
MICHIGAN, INC.
MOTOR WHEEL CORPORATION
MWC ACQUISITION SUB, INC.
By: ___________________________
Name:
Title:
<PAGE> 1
EXHIBIT 4.3
- --------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
Dated as of June 30, 1997
by and among
HAYES WHEELS INTERNATIONAL, INC.,
THE GUARANTORS
named herein
and
THE INITIAL PURCHASERS
named herein
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
Page
[S] [C]
Definitions........................................ 1
Exchange Offer..................................... 5
Shelf Registration................................. 9
Additional Interest................................ 10
Registration Procedures............................ 12
Registration Expenses.............................. 23
Indemnification.................................... 25
Rules 144 and 144A................................. 29
Underwritten Registrations......................... 29
Miscellaneous...................................... 30
(a) Remedies...................................... 30
(b) Enforcement................................... 30
(c) No Inconsistent Agreements.................... 30
(d) Adjustments Affecting Registrable Notes....... 30
(e) Amendments and Waivers........................ 30
(f) Notices....................................... 31
(g) Successors and Assigns........................ 32
(h) Counterparts.................................. 32
(i) Headings...................................... 32
(j) GOVERNING LAW................................. 32
(k) Severability.................................. 32
(l) Entire Agreement.............................. 32
(m) Joint and Several Obligations................. 32
(n) Notes Held by the Company or their Affiliates. 33
-i-
<PAGE> 3
REGISTRATION RIGHTS AGREEMENT (the "Agreement") dated as of June
30, 1997, by and among HAYES WHEELS INTERNATIONAL, INC., a Delaware
corporation (the "Company"), the Guarantors as listed on the
signature pages hereto (the "Guarantors"), and CIBC WOOD GUNDY
SECURITIES CORP. ("CIBC"), MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED, BEAR, STEARNS & CO. INC., MORGAN STANLEY & CO. INC. and
SALOMON BROTHERS INC, as initial purchasers (the "Initial
Purchasers").
This Agreement is entered into in connection with the Purchase
Agreement, dated as of June 19, 1997 among the Company, the
Guarantors and the Initial Purchasers (the "Purchase Agreement")
relating to the sale by the Company to the Initial Purchasers of
$250,000,000 aggregate principal amount of the Company's 9 1/8%
Senior Subordinated Notes due 2007 (the "Notes") and the guarantee of
the Notes by the Guarantors (the "Guarantees"). In order to induce
the Initial Purchasers to enter into the Purchase Agreement, the
Company and the Guarantors have agreed to provide the registration
rights set forth in this Agreement to the Initial Purchasers and
their direct and indirect transferees and assigns. The execution and
delivery of this Agreement is a condition to the Initial Purchasers'
obligation to purchase the Notes under the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the
following meanings:
Additional Interest: See Section 4(a).
Advice: See Section 5.
Applicable Period: See Section 2(b).
Closing: See the Purchase Agreement.
Company: See the introductory paragraph to this Agreement.
Effectiveness Date: The 120th day after the Issue Date.
Effectiveness Period: See Section 3(a).
<PAGE> 4
-2-
Event Date: See Section 4(c).
Exchange Act: The Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.
Exchange Notes: See Section 2(a).
Exchange Offer: See Section 2(a).
Exchange Registration Statement: See Section 2(a).
Filing Date: The 60th day after the Issue Date.
Guarantees: See the introductory paragraph of this Agreement.
Holder: Any holder of a Registrable Note or Registrable Notes.
Indemnified Person: See Section 7(c).
Indemnifying Person: See Section 7(c).
Indenture: The Indenture, dated as of June 30, 1997, among the
Company, the Guarantors and The Bank of New York, as trustee,
pursuant to which the Notes are being issued, as amended or
supplemented from time to time in accordance with the terms thereof.
Initial Purchasers: See the introductory paragraph to this
Agreement.
Initial Shelf Registration: See Section 3(a).
Inspectors: See Section 5(o).
Issue Date: The date on which the original Notes are sold to
the Initial Purchasers pursuant to the Purchase Agreement.
NASD: See Section 5(t).
Notes: See the introductory paragraph to this Agreement.
Participant: See Section 7(a).
<PAGE> 5
-3-
Participating Broker-Dealer: See Section 2(b).
Person: An individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government (including any agency or
political subdivision thereof).
Private Exchange: See Section 2(b).
Private Exchange Notes: See Section 2(b).
Prospectus: The prospectus included in any Registration
Statement (including, without limitation, any prospectus subject to
completion and a prospectus that includes any information previously
omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities
Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the
Registrable Notes covered by such Registration Statement, and all
other amendments and supplements to the Prospectus, including
post-effective amendments, and all material incorporated by reference
or deemed to be incorporated by reference in such Prospectus.
Purchase Agreement: See the introductory paragraphs to this
Agreement.
Records: See Section 5(o).
Registrable Notes: The Notes upon original issuance of the
Notes and at all times subsequent thereto and, if issued, the
Private Exchange Notes, until in the case of any such Notes or any
such Private Exchange Notes, as the case may be, (i) a Registration
Statement covering such Notes or such Private Exchange Notes has been
declared effective by the SEC and such Notes or such Private Exchange
Notes, as the case may be, have been exchanged and/or disposed of in
accordance with such effective Registration Statement, (ii) such
Notes or such Private Exchange Notes, as the case may be, are sold in
compliance with Rule 144, (iii) in the case of any Note, such Note
has been exchanged for an Exchange Note or Exchange Notes pursuant to
an Exchange Offer or (iv) such Notes or such Private Exchange Notes,
as the case may be, cease to be outstanding.
Registration Default: See Section 4(a).
Registration Statement: Any registration statement of the
Company or the Guarantors, including, but not limited
<PAGE> 6
-4-
to, the Exchange Registration Statement, which covers any of the
Registrable Notes pursuant to the provisions of this Agreement,
including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all
exhibits, and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement.
Rule 144: Rule 144 promulgated under the Securities Act, as
such Rule may be amended from time to time, or any similar rule
(other than Rule 144A) or regulation hereafter adopted by the SEC
providing for offers and sales of securities made in compliance
therewith resulting in offers and sales by subsequent holders that
are not affiliates of an issuer of such securities being free of the
registration and prospectus delivery requirements of the Securities
Act.
Rule 144A: Rule 144A promulgated under the Securities Act, as
such Rule may be amended from time to time, or any similar rule
(other than Rule 144) or regulation hereafter adopted by the SEC
providing for offers and sales of securities made in compliance
therewith resulting in offers and sales by subsequent holders that
are not affiliates of an issuer of such securities being free of the
registration and prospectus delivery requirements of the Securities
Act.
Rule 415: Rule 415 promulgated under the Securities Act, as
such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
Shelf Notice: See Section 2(c).
Shelf Registration: See Section 3(b).
Subsequent Shelf Registration: See Section 3(b).
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The trustee under the Indenture and, if existent, the
trustee under any indenture governing the Exchange Notes and Private
Exchange Notes (if any).
<PAGE> 7
-5-
Underwritten registration or underwritten offering: A
registration under the Securities Act in which securities of the
Company are sold to an underwriter(s) for reoffering to the public.
2. Exchange Offer
(a) Each of the Company and the Guarantors jointly and severally
agrees to use its best efforts to file with the SEC as soon as
practicable after the Closing, but in no event later than the Filing
Date, documents pertaining to an offer to exchange (the "Exchange
Offer") any and all of the Registrable Notes for a like aggregate
principal amount of debt securities of the Company, guaranteed by the
Guarantors, which are identical in all material respects to the Notes
(the "Exchange Notes") (and which are entitled to the benefits of the
Indenture or a trust indenture which is substantially identical to
the Indenture (other than such changes to the Indenture or any such
identical trust indenture as are necessary to comply with any
requirements of the SEC to effect or maintain the qualification
thereof under the TIA) and which, in either case, has been qualified
under the TIA), except that the Exchange Notes shall have been
registered pursuant to an effective registration statement under the
Securities Act and will not contain terms with respect to transfer
restrictions. The documents pertaining to the Exchange Offer will be
filed under the Securities Act on the appropriate form (the "Exchange
Registration Statement") and the Exchange Offer will comply with all
applicable tender offer rules and regulations under the Exchange
Act. Each of the Company and the Guarantors jointly and severally
agrees to use its best efforts to (x) cause the Exchange Registration
Statement to become effective under the Securities Act on or before
the Effectiveness Date; (y) keep the Exchange Offer open for at
least 30 days (or longer if required by applicable law) after
the date that notice of the Exchange Offer is mailed to Holders; and
(z) consummate the Exchange Offer on or prior to the 150th day (or,
in the event of any extension of the Exchange Offer required by
applicable law, the earliest day following any such extension)
following the Issue Date. Each Holder who participates in the
Exchange Offer will be required to represent that any Exchange Notes
received by it will be acquired in the ordinary course of its
business, that at the time of the consummation of the Exchange Offer
such Holder will have no arrangement or understanding with any Person
to participate in the distribution of the Exchange Notes in violation
of the provisions of the Securities Act, that such Holder is not an
affiliate of any of the Company or the Guarantors within the meaning
of Rule 405 promulgated under the Securities Act or if
<PAGE> 8
-6-
it is such an affiliate, that it will comply with the
registration and prospectus delivery requirements of the Securities
Act, to the extent applicable and that is not acting on behalf of any
Person who could not truthfully make the foregoing representations.
Upon consummation of the Exchange Offer in accordance with this
Section 2, the provisions of this Agreement shall continue to apply,
mutatis mutandis, solely with respect to Registrable Notes that are
Private Exchange Notes and Exchange Notes held by Participating
Broker-Dealers, and the Company and the Guarantors shall have no
further obligation to register Registrable Notes (other than Private
Exchange Notes and Exchange Notes held by Participating
Broker-Dealers) pursuant to Section 3 of this Agreement.
(b) The Company and the Guarantors shall include within the
Prospectus contained in the Exchange Registration Statement a section
entitled "Plan of Distribution," reasonably acceptable to the Initial
Purchasers, which shall contain a summary statement of the positions
taken or policies made by the staff of the SEC with respect to the
potential "underwriter" status of any broker-dealer that is the
beneficial owner (as defined in Rule 13d-3 promulgated under the
Exchange Act) of Exchange Notes received by such broker-dealer in the
Exchange Offer (a "Participating Broker-Dealer"), whether such
positions or policies have been publicly disseminated by the staff of
the SEC or such positions or policies, in the reasonable judgment of
the Initial Purchasers, represent the prevailing views of the staff
of the SEC. Such "Plan of Distribution" section shall also allow the
use of the Prospectus by all Persons subject to the prospectus
delivery requirements of the Securities Act, including all
Participating Broker-Dealers, and include a statement describing the
means by which Participating Broker-Dealers may resell the Exchange
Notes.
Each of the Company and the Guarantors shall use its best
efforts to keep the Exchange Registration Statement effective and to
amend and supplement the Prospectus contained therein in order to
permit such Prospectus to be lawfully delivered by all Persons
subject to the prospectus delivery requirements of the Securities Act
for such period of time as such Persons must comply with such
requirements in order to resell the Exchange Notes, provided that
such period shall not exceed 180 days (or such longer period if
extended pursuant to the last paragraph of Section 5) (the
"Applicable Period").
If, prior to consummation of the Exchange Offer, the Initial
Purchasers hold any Notes acquired by them and having, or which are
reasonably likely to be determined to have, the
<PAGE> 9
-7-
status as an unsold allotment in the initial distribution, the
Company and the Guarantors upon the request of such Initial
Purchasers shall, simultaneously with the delivery of the Exchange
Notes in the Exchange Offer, issue and deliver to such Initial
Purchasers, in exchange (the "Private Exchange") for the Notes held
by such Initial Purchasers, a like principal amount of debt
securities of the Company guaranteed by the Guarantors, that are
identical in all material respects to the Exchange Notes (the
"Private Exchange Notes") (and which are issued pursuant to the same
indenture as the Exchange Notes) except for the placement of a
restrictive legend on the Private Exchange Notes. If possible, the
Private Exchange Notes shall bear the same CUSIP number as the
Exchange Notes. Interest on the Exchange Notes and Private Exchange
Notes will accrue from (A) the later of (i) the last interest payment
date on which interest was paid on the Notes surrendered in exchange
therefor or (ii) if the Notes are surrendered for exchange on a date
in a period which includes the record date for an interest payment
date to occur on or after the date of such exchange and as to which
interest will be paid, the date of such interest payment date or (B)
if no interest has been paid on the Notes, from the Issue Date.
In connection with the Exchange Offer, the Company and the
Guarantors shall:
(i) mail to each Holder a copy of the Prospectus forming part of
the Exchange Registration Statement, together with an appropriate
letter of transmittal and related documents;
(ii) utilize the services of a depositary for the Exchange Offer
with an address in the Borough of Manhattan, The City of New York;
and
(iii) permit Holders to withdraw tendered Notes at any time
prior to the close of business, New York City time, on the last
business day on which the Exchange Offer shall remain open.
As soon as practicable after the close of the Exchange Offer or
the Private Exchange, as the case may be, the Company and the
Guarantors shall:
(i) accept for exchange all Notes tendered and not validly
withdrawn pursuant to the Exchange Offer or the Private Exchange;
<PAGE> 10
-8-
(ii) deliver to the Trustee for cancellation all Notes so
accepted for exchange; and
(iii) cause the Trustee to authenticate and deliver promptly to
each Holder of Notes, Exchange Notes or Private Exchange Notes, as
the case may be, equal in principal amount to the Notes of such
Holder so accepted for exchange.
The Exchange Notes and the Private Exchange Notes may be issued
under (i) the Indenture or (ii) an indenture substantially identical
to the Indenture, which in either event will provide that (1) the
Exchange Notes will not be subject to the transfer restrictions set
forth in the Indenture and (2) the Private Exchange Notes will be
subject to the transfer restrictions set forth in the Indenture. The
Indenture or such indenture shall provide that the Exchange Notes,
the Private Exchange Notes and the Notes will have the right to vote
and give consents together on all matters presented to such holders
for votes or consents as one class and that neither the Exchange
Notes, the Private Exchange Notes nor the Notes will have the right
to vote or consent as a separate class on any matter.
(c) If (1) prior to the consummation of the Exchange Offer, the
Company and the Guarantors or Holders of at least a majority in
aggregate principal amount of the Registrable Notes reasonably
determine in good faith that (i) the Exchange Notes would not, upon
receipt, be freely transferable by such Holders which are not
affiliates (within the meaning of the Securities Act) of the Company
or the Guarantors without restriction under the Securities Act and
without restrictions under applicable state securities laws, (ii) the
interests of the Holders under this Agreement would be adversely
affected by the consummation of the Exchange Offer or (iii) after
conferring with counsel, the SEC is unlikely to permit the
commencement of the Exchange Offer prior to the Effectiveness Date,
(2) subsequent to the consummation of the Private Exchange, any
holder of the Private Exchange Notes so requests or (3) the Exchange
Offer is commenced and not consummated within 150 days of the Issue
Date, then the Company and the Guarantors shall promptly deliver to
the Holders and the Trustee written notice thereof (the "Shelf
Notice") and shall file an Initial Shelf Registration pursuant to
Section 3. Following the delivery of a Shelf Notice to the Holders
of Registrable Notes (in the circumstances contemplated by clauses
(1) and (3) of the preceding sentence), the Company and the
Guarantors shall not have any further obligation to conduct the
Exchange Offer or the Private Exchange under this Section 2.
<PAGE> 11
-9-
3. Shelf Registration
If a Shelf Notice is required to be delivered as contemplated by
Section 2(c), then:
(a) Initial Shelf Registration. The Company and the Guarantors
shall prepare and file with the SEC a Registration Statement for an
offering to be made on a continuous basis pursuant to Rule 415
covering all of the then existing Registrable Notes (the "Initial
Shelf Registration"). If the Company and the Guarantors shall have
not yet filed an Exchange Registration Statement, each of the Company
and the Guarantors shall use its best efforts to file with the SEC
the Initial Shelf Registration on or prior to the Filing Date. In
any other instance, each of the Company and the Guarantors shall use
its best efforts to file with the SEC the Initial Shelf Registration
as promptly as practicable following delivery of the Shelf Notice.
The Initial Shelf Registration shall be on Form S-3 or another
appropriate form permitting registration of such Registrable
Notes for resale by such Holders in the manner or manners designated
by them (including, without limitation, one or more underwritten
offerings). The Company and the Guarantors shall not permit any
securities other than the Registrable Notes to be included in the
Initial Shelf Registration or any Subsequent Shelf Registration.
Each of the Company and the Guarantors shall use its best efforts to
cause the Initial Shelf Registration to be declared effective under
the Securities Act, if an Exchange Registration Statement has not yet
been declared effective, on or prior to the Effectiveness Date, or,
in any other instance, as soon as practicable after the filing
thereof and in no event later than 90 days following delivery of the
Shelf Notice, and to keep the Initial Shelf Registration continuously
effective under the Securities Act until the date which is 24 months
from the date on which such Initial Shelf Registration is declared
effective (subject to extension pursuant to the last paragraph of
Section 5 hereof), or such shorter period ending when all Registrable
Notes covered by the Initial Shelf Registration have been sold in the
manner set forth and as contemplated in the Initial Shelf
Registration (the "Effectiveness Period").
(b) Subsequent Shelf Registrations. If the Initial Shelf
Registration or any Subsequent Shelf Registration ceases to be
effective for any reason at any time prior to the termination of the
Effectiveness Period, each of the Company and the Guarantors shall
use its best efforts to promptly restore the effectiveness thereof,
and in any event shall, within 45 days of such cessation of
effectiveness, amend the Shelf Registra-
<PAGE> 12
-10-
tion in a manner reasonably expected to restore the
effectiveness thereof, or file an additional "shelf" Registration
Statement pursuant to Rule 415 covering all of the then existing
Registrable Notes (a "Subsequent Shelf Registration"). If a
Subsequent Shelf Registration is filed, each of the Company and the
Guarantors shall use its best efforts to cause the Subsequent Shelf
Registration to be declared effective as soon as practicable after
such filing and to keep such Registration Statement continuously
effective during the Effectiveness Period. As used herein the term
"Shelf Registration" means the Initial Shelf Registration and any
Subsequent Shelf Registration.
(c) Supplements and Amendments. The Company and the Guarantors
shall promptly supplement and amend the Shelf Registration if
required by the rules, regulations or instructions applicable to the
registration form used for such Shelf Registration or if required by
the Securities Act. The Company and the Guarantors shall promptly
supplement and amend the Shelf Registration if any such supplement or
amendment is reasonably requested by the Holders of a majority in
aggregate principal amount of the Registrable Notes covered by such
Registration Statement or by any underwriter(s) of such Registrable
Notes.
4. Additional Interest
(a) The Company and the Initial Purchasers agree that the
Holders of Registrable Notes will suffer damages if the Company fails
to fulfill its obligations under Section 2 or Section 3 hereof and
that it would not be feasible to ascertain the extent of such damages
with precision. Accordingly, the Company agrees to pay additional
interest on the Notes ("Additional Interest") under the circumstances
and to the extent set forth below:
(i) if neither the Exchange Registration Statement nor the
Initial Shelf Registration has been filed on or prior to the Filing
Date;
(ii) if neither the Exchange Registration Statement nor the
Initial Shelf Registration has been declared effective on or prior to
the Effectiveness Date;
(iii) if an Initial Shelf Registration required by Section
2(c)(2) has not been filed on or prior to the date 45 days after
delivery of the Shelf Notice;
<PAGE> 13
-11-
(iv) if an Initial Shelf Registration required by Section
2(c)(2) has not been declared effective on or prior to the date 90
days after the delivery of the Shelf Notice; and/or
(v) if (A) the Company has not exchanged the Exchange
Notes for all Notes validly tendered in accordance with the terms of
the Exchange Offer on or prior to the date 150 days after the Issue
Date or (B) the Exchange Registration Statement ceases to be
effective at any time prior to the time that the Exchange Offer is
consummated or (C) if applicable, the Shelf Registration has been
declared effective and such Shelf Registration ceases to be effective
at any time prior to the termination of the Effectiveness Period;
(each such event referred to in clauses (i) through (v) above is a
"Registration Default"). The sole remedy available to Holders of the
Notes for a Registration Default will be the accrual of Additional
Interest as follows: the per annum interest rate on the Notes will
increase by .50% during the first 90-day period following the occurrence
of a Registration Default and until it is waived or cured; and the per
annum interest rate will increase by an additional .25% for each
subsequent 90-day period during which the Registration Default remains
uncured, up to a maximum additional interest rate of 2.0% per annum,
provided, however, that only Holders of Private Exchange Notes shall be
entitled to receive Additional Interest as a result of a Registration
Default pursuant to clause (iii) or (iv), provided, further, that (1) upon
the filing of the Exchange Registration Statement or the Initial Shelf
Registration (in the case of (i) above), (2) upon the effectiveness of the
Exchange Registration Statement or a Shelf Registration (in the case of
(ii) above), (3) upon the filing of the Shelf Registration (in the case of
(iii) above), (4) upon the effectiveness of the Shelf Registration (in the
case of (iv) above), or (5) upon the exchange of Exchange Notes for all
Notes tendered or the effectiveness of a Shelf Registration (in the case
of (v)(A) above), or upon the subsequent effectiveness of the Exchange
Registration Statement which had ceased to remain effective or the
effectiveness of a Shelf Registration (in the case of (v)(B) above), or
upon the subsequent effectiveness of the Shelf Registration which had
ceased to remain effective (in the case of (v)(C) above), Additional
Interest on the Notes as a result of such clause (i), (ii), (iii), (iv) or
(v) (or the relevant subclause thereof), as the case may be, shall cease
to accrue and the interest rate on the Notes will revert to the interest
rate originally borne by the Notes.
<PAGE> 14
-12-
(b) Notwithstanding the foregoing, no Additional
Interest will be payable with respect to a Registration Default
described in clause (v)(C) above, if pending a material corporate
transaction, the Company issues a notice that the Registration
Statement, or the prospectus contained therein, is unusable, or such
notice is required under applicable securities laws to be issued by
the Company, and the aggregate number of days in any consecutive
twelve month period for which the Registration Statement, or the
Prospectus contained therein, is unusable pursuant to all such
notices has not exceeded 75 days in the aggregate.
(c) The Company and the Guarantors shall notify the Trustee
within one business day after each and every date on which an event
occurs in respect of which Additional Interest is required to be paid
(an "Event Date"). Any amounts of Additional Interest due pursuant
to (a)(i), (a)(ii) or (a)(iii) of this Section 4 will be payable in
cash semi-annually on each January 15 and July 15 (to the Holders of
record on the January 1 and July 1 immediately preceding such dates),
commencing with the first such date occurring after any such
Additional Interest commences to accrue and until such Registration
Default is cured, by depositing with the Trustee, in trust for the
benefit of such Holders, immediately available funds in sums
sufficient to pay such Additional Interest. The amount of Additional
Interest will be determined by multiplying the applicable Additional
Interest rate by the principal amount of the Registrable Notes,
multiplied by a fraction, the numerator of which is the number of
days such Additional Interest rate was applicable during such period
(determined on the basis of a 360-day year comprised of twelve 30-day
months and, in the case of a partial month, the actual number of days
elapsed), and the denominator of which is 360.
5. Registration Procedures
In connection with the filing of any Registration Statement
pursuant to Section 2 or 3 hereof, the Company and the Guarantors
shall effect such registrations to permit the sale of the securities
covered thereby in accordance with the intended method or methods of
disposition thereof, and pursuant thereto the Company and the
Guarantors shall:
Prepare and file with the SEC, as provided herein, a
Registration Statement or Registration Statements as prescribed by
Section 2 or 3, and use their respective best efforts to cause each
such Registration Statement to become effective and remain
effective as pro-
<PAGE> 15
-13-
vided herein, provided that, if (1) such filing is pursuant to
Section 3, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 is required to be delivered
under the Securities Act by any Participating Broker-Dealer who seeks
to sell Exchange Notes during the Applicable Period, before filing
any Registration Statement or Prospectus or any amendments or
supplements thereto, the Company and the Guarantors shall, if
requested, furnish to and afford the Holders of the Registrable Notes
covered by such Registration Statement and each such Participating
Broker-Dealer, as the case may be, their counsel and the managing
underwriter(s), if any, a reasonable opportunity to review copies of
all such documents (including copies of any documents to be
incorporated by reference therein and all exhibits thereto) proposed
to be filed (to the extent practicable, at least 5 business days
prior to such filing). The Company and the Guarantors shall not file
any Registration Statement or Prospectus or any amendments or
supplements thereto in respect of which the Holders must be afforded
an opportunity to review prior to the filing of such document, if the
Holders of a majority in aggregate principal amount of the
Registrable Notes covered by such Registration Statement, or such
Participating Broker-Dealer, as the case may be, their counsel, or
the managing underwriter(s), if any, reasonably object to information
concerning the Holders or such Participating Broker-Dealer contained
therein.
Prepare and file with the SEC such amendments and
post-effective amendments to each Shelf Registration or Exchange
Registration Statement, as the case may be, as may be necessary to
keep such Registration Statement continuously effective for the
Effectiveness Period or the Applicable Period, as the case may be;
cause the related Prospectus to be supplemented by any prospectus
supplement required by applicable law, and as so supplemented to be
filed pursuant to Rule 424 (or any similar provisions then in force)
under the Securities Act; and comply with the provisions of the
Securities Act and the Exchange Act applicable to them with respect
to the disposition of all securities covered by such Registration
Statement as so amended or in such Prospectus as so supplemented and
with respect to the subsequent resale of any securities being sold by
a Participating Broker-Dealer covered by any such Prospectus; the
Company and the Guarantors shall be deemed not to have used their
best efforts to keep a Registration Statement effective during the
Applicable Period if any of them voluntarily takes any action that
would result in
<PAGE> 16
-14-
selling Holders of the Registrable Notes covered thereby or
Participating Broker-Dealers seeking to sell Exchange Notes not being
able to sell such Registrable Notes or such Exchange Notes during
that period unless such action is required by applicable law or
unless the Company and the Guarantors comply with this Agreement,
including without limitation, the provisions of clauses 5(c)(v) and
(vi) below.
If (1) a Shelf Registration is filed pursuant to
Section 3, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 is required to be delivered
under the Securities Act by any Participating Broker-Dealer who
seeks to sell Exchange Notes during the Applicable Period, notify the
selling Holders of Registrable Notes, or each such Participating
Broker-Dealer, as the case may be, their counsel and the managing
underwriter(s), if any, promptly (but in any event within two
business days), and confirm such notice in writing, (i) when a
Prospectus or any prospectus supplement or post-effective amendment
thereto has been filed, and, with respect to a Registration Statement
or any post-effective amendment thereto, when the same has become
effective under the Securities Act (including in such notice a
written statement that any Holder may, upon request, obtain, without
charge, one conformed copy of such Registration Statement or
post-effective amendment thereto including financial statements and
schedules, documents incorporated or deemed to be incorporated by
reference and exhibits), (ii) of the issuance by the SEC of any stop
order suspending the effectiveness of a Registration Statement or of
any order preventing or suspending the use of any preliminary
Prospectus or the initiation of any proceedings for that purpose,
(iii) if at any time when a Prospectus is required by the Securities
Act to be delivered in connection with sales of the Registrable Notes
or resales of Exchange Notes by Participating Broker-Dealers the
representations and warranties of the Company contained in any
agreement (including any underwriting agreement) contemplated by
Section 5(n) below cease to be true and correct, (iv) of the receipt
by any of the Company or the Guarantors of any notification with
respect to the suspension of the qualification or exemption from
qualification of a Registration Statement or any of the Registrable
Notes or the Exchange Notes to be sold by any Participating Broker-
Dealer for offer or sale in any jurisdiction, or the initiation or
threatening of any proceeding for such purpose, (v) of the happening
of any
<PAGE> 17
-15-
event or any information becoming known that makes any statement
made in such Registration Statement or related Prospectus or any
document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires the making
of any changes in, or amendments or supplements to, such Registration
Statement, Prospectus or documents so that, in the case of the
Registration Statement, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading, and that in the case of the Prospectus, it will not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading, and (vi) of the Company's or any
Guarantor's reasonable determination that a post-effective amendment
to a Registration Statement would be necessary or appropriate.
If (1) a Shelf Registration is filed pursuant to Section 3,
or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Notes during the Applicable Period, use their best efforts
to prevent the issuance of any order suspending the effectiveness of
a Registration Statement or of any order preventing or suspending the
use of a Prospectus or suspending the qualification (or exemption
from qualification) of any of the Registrable Notes or the Exchange
Notes to be sold by any Participating Broker-Dealer, for sale in any
jurisdiction, and, if any such order is issued, to use their best
efforts to obtain the withdrawal of any such order as promptly as
practicable.
If a Shelf Registration is filed pursuant to Section 3 and
if requested by the managing underwriter(s), if any, or the Holders
of a majority in aggregate principal amount of the Registrable Notes
being sold in connection with an underwritten offering, (i) promptly
incorporate in a Prospectus supplement or post-effective amendment
such information as the managing underwriter(s), if any, or such
Holders reasonably request to be included therein and (ii) make all
required filings of such Prospectus supplement or such post-effective
amendment as soon as practicable after the Company has received
notifi-
<PAGE> 18
-16-
cation of the matters to be incorporated in such Prospectus
supplement or post-effective amendment.
If (1) a Shelf Registration is filed pursuant to Section 3,
or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Notes during the Applicable Period, furnish to each selling
Holder of Registrable Notes who so requests and to each such
Participating Broker-Dealer who so requests and to counsel and the
managing underwriter(s), if any, without charge, one conformed copy
of the Registration Statement or Registration Statements and each
post-effective amendment thereto, including financial statements and
schedules, and, if requested, all documents incorporated or deemed to
be incorporated therein by reference and all exhibits.
If (1) a Shelf Registration is filed pursuant to Section 3,
or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Notes during the Applicable Period, deliver to each selling
Holder of Registrable Notes, or each such Participating
Broker-Dealer, as the case may be, their counsel, and the managing
underwriter or underwriters, if any, without charge, as many copies
of the Prospectus or Prospectuses (including each form of preliminary
Prospectus) and each amendment or supplement thereto and any
documents incorporated by reference therein as such Persons may
reasonably request; and, subject to the last paragraph of this
Section 5, each of the Company and the Guarantors hereby consents to
the use of such Prospectus and each amendment or supplement thereto
by each of the selling Holders of Registrable Notes or each such
Participating Broker-Dealer, as the case may be, and the managing
underwriter or underwriters or agents, if any, and dealers (if any),
in connection with the offering and sale of the Registrable
Notes covered by, or the sale by Participating Broker-Dealers of the
Exchange Notes pursuant to, such Prospectus and any amendment or
supplement thereto.
Prior to any public offering of Registrable Notes or any
delivery of a Prospectus contained in the Exchange Registration
Statement by any Participating Broker-Dealer who seeks to sell
Exchange Notes during the Appli-
<PAGE> 19
-17-
cable Period, to use their best efforts to register or qualify,
and to cooperate with the selling Holders of Registrable Notes or
each such Participating Broker-Dealer, as the case may be, the
managing underwriter or underwriters, if any, and their respective
counsel in connection with the registration or qualification of (or
exemption from such registration or qualification), such Registrable
Notes for offer and sale under the securities or Blue Sky laws of
such jurisdictions within the United States as any selling Holder,
Participating Broker-Dealer, or the managing underwriter or
underwriters, if any, reasonably request in writing, provided that
where Exchange Notes held by Participating Broker-Dealers or
Registrable Notes are offered other than through an underwritten
offering, the Company and the Guarantors agree to cause their counsel
to perform Blue Sky investigations and file registrations and
qualifications required to be filed pursuant to this Section 5(h);
keep each such registration or qualification (or exemption therefrom)
effective during the period such Registration Statement is required
to be kept effective and do any and all other acts or things
reasonably necessary or advisable to enable the disposition in such
jurisdictions of the Exchange Notes held by Participating
Broker-Dealers or the Registrable Notes covered by the applicable
Registration Statement; provided that none of the Company or the
Guarantors shall be required to (A) qualify generally to do business
in any jurisdiction where it is not then so qualified, (B) take any
action that would subject it to general service of process in any
such jurisdiction where it is not then so subject or (C) subject
itself to taxation in any such jurisdiction where it is not otherwise
so subject.
If a Shelf Registration is filed pursuant to Section 3,
cooperate with the selling Holders of Registrable Notes and the
managing underwriter or underwriters, if any, to facilitate the
timely preparation and delivery of certificates representing
Registrable Notes to be sold, which certificates shall not bear any
restrictive legends and shall be in a form eligible for deposit with
The Depository Trust Company; and enable such Registrable Notes to be
in such denominations and registered in such names as the managing
underwriter or underwriters, if any, or Holders may reasonably
request.
Use their best efforts to cause the Registrable Notes
covered by the Registration Statement to be registered with or
approved by such other governmental agencies
<PAGE> 20
-18-
or authorities as may be necessary to enable the seller or
sellers thereof or the managing underwriter or underwriters, if any,
to consummate the disposition of such Registrable Notes, except as
may be required solely as a consequence of the nature of such selling
Holder's business, in which case each of the Company and the
Guarantors will cooperate in all reasonable respects with the filing
of such Registration Statement and the granting of such approvals.
If (1) a Shelf Registration is filed pursuant to Section 3,
or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Notes during the Applicable Period, upon the occurrence of
any event contemplated by paragraph 5(c)(v) or 5(c)(vi), as promptly
as reasonably practicable prepare and (subject to Section 5(a)) file
with the SEC, at the joint and several expense of each of the Company
and the Guarantors, a supplement or post-effective amendment to the
Registration Statement or a supplement to the related Prospectus or
any document incorporated or deemed to be incorporated therein by
reference, or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Notes being sold
thereunder or to the purchasers of the Exchange Notes to whom such
Prospectus will be delivered by a Participating Broker-Dealer, any
such Prospectus will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
Use their best efforts to cause the Registrable Notes
covered by a Registration Statement or the Exchange Notes, as the
case may be, to be rated with the appropriate rating agencies, if so
requested by the Holders of a majority in aggregate principal amount
of Registrable Notes covered by such Registration Statement or the
Exchange Notes, as the case may be, or the managing underwriter or
underwriters, if any.
Prior to the effective date of the first Registration
Statement relating to the Registrable Notes, (i) provide the Trustee
with certificates for the Registrable Notes or Exchange Notes, as the
case may be, in a form eligible for deposit with The Depository Trust
Com-
<PAGE> 21
-19-
pany and (ii) provide a CUSIP number for the Registrable Notes
or Exchange Notes, as the case may be.
In connection with an underwritten offering of Registrable
Notes pursuant to a Shelf Registration, enter into an underwriting
agreement as is customary in underwritten offerings of debt
securities similar to the Notes and take all such other actions as
are reasonably requested by the managing underwriter(s), if any, in
order to expedite or facilitate the registration or the disposition
of such Registrable Notes, and in such connection, (i) make such
representations and warranties to the managing underwriter or
underwriters on behalf of any underwriters, with respect to the
business of the Company and its subsidiaries and the Registration
Statement, Prospectus and documents, if any, incorporated or deemed
to be incorporated by reference therein, in each case, as are
customarily made by issuers to underwriters in underwritten offerings
of debt securities similar to the Notes, and confirm the same if and
when requested; (ii) obtain opinions of counsel to the Company and
the Guarantors and updates thereof in form and substance reasonably
satisfactory to the managing underwriter or underwriters, addressed
to the managing underwriter or underwriters covering the matters
customarily covered in opinions requested in underwritten offerings
of debt securities similar to the Notes and such other matters as may
be reasonably requested by the managing underwriter(s);
provided, that no such opinion of outside counsel to the Company or
any Guarantor which shall have rendered an opinion in connection with
the sale of the Notes to the Initial Purchasers (the "Original
Opinion") need cover any matter other than matters covered in the
Original Opinion and such other matters concerning the Registration
Statement and the application of the Securities Act to the offer and
sale of the Registration Notes as may be reasonably requested by the
managing underwriter or underwriters; (iii) obtain "cold comfort"
letters and updates thereof in form and substance reasonably
satisfactory to the managing underwriter or underwriters from the
independent certified public accountants of the Company and the
Guarantors (and, if necessary, any other independent certified public
accountants of any subsidiary of any of the Company or of any
business acquired by any of the Company or the Guarantors for which
financial statements and financial data are, or are required to be,
included in the Registration Statement), addressed to the managing
underwriter or underwriters on behalf of any underwriters, such
letters to be in
<PAGE> 22
-20-
customary form and covering matters of the type customarily
covered in "cold comfort" letters in connection with underwritten
offerings of debt securities similar to the Notes and such other
matters as may be reasonably requested by the managing underwriter or
underwriters; and (iv) if an underwriting agreement is entered into,
the same shall contain indemnification provisions and procedures no
less favorable than those set forth in Section 7 hereof (or such
other provisions and procedures acceptable to Holders of a majority
in aggregate principal amount of Registrable Notes covered by such
Registration Statement and the managing underwriter or underwriters
or agents) with respect to all parties to be indemnified pursuant to
said Section. The above shall be done at each closing under such
underwriting agreement, or as and to the extent required thereunder.
If (1) a Shelf Registration is filed pursuant to Section 3,
or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Notes during the Applicable Period, make available for
inspection by any selling Holder of such Registrable Notes being
sold, or each such Participating Broker-Dealer, as the case may be,
the managing underwriter or underwriters participating in any such
disposition of Registrable Notes, if any, and any attorney,
accountant or other agent retained by any such selling Holder or each
such Participating Broker-Dealer, as the case may be (collectively,
the "Inspectors"), at the offices where normally kept, during
reasonable business hours, all financial and other records, pertinent
corporate documents and properties of the Company and the Guarantors
and their respective subsidiaries (collectively, the "Records") as
shall be reasonably necessary to enable them to exercise any
applicable due diligence responsibilities, and cause the officers,
directors and employees of the Company and the Guarantors and their
respective subsidiaries to supply all information in each case
reasonably requested by any such Inspector in connection with such
Registration Statement. Records which the Company and the Guarantors
determine, in good faith, to be confidential and any Records which
they notify the Inspectors are confidential shall not be disclosed by
the Inspectors unless (i) the disclosure of such Records is necessary
to avoid or correct a material misstatement or material omission in
such Registration Statement, (ii) the release of such Records is
ordered pursuant
<PAGE> 23
-21-
to a subpoena or other order from a court of competent
jurisdiction or (iii) the information in such Records has been made
generally available to the public. Each selling Holder of such
Registrable Notes and each such Participating Broker-Dealer or
underwriter will be required to agree that information obtained by it
as a result of such inspections shall be deemed confidential and
shall not be used by it as the basis for any market transactions in
the securities of the Company or for any purpose other than in
connection with such Registration Statement unless and until such is
made generally available to the public. Each selling Holder of such
Registrable Notes and each such Participating Broker-Dealer will be
required to further agree that it will, upon learning that disclosure
of such Records is sought in a court of competent jurisdiction, give
prompt notice to the Company and allow the Company to undertake
appropriate action to prevent disclosure of the Records deemed
confidential at their expense.
Provide an indenture trustee for the Registrable Notes or
the Exchange Notes, as the case may be, and cause the Indenture or
the trust indenture provided for in Section 2(a), as the case may be,
to be qualified under the TIA not later than the effective date of
the Exchange Registration Statement or the first Registration
Statement relating to the Registrable Notes; and in connection
therewith, cooperate with the trustee under any such indenture and
the Holders of the Registrable Notes, to effect such changes to such
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 such trustee to execute, all documents as may be
required to effect such changes, and all other forms and documents
required to be filed with the SEC to enable such indenture to be so
qualified in a timely manner.
Comply with all applicable rules and regulations of the SEC
and make generally available to its securityholders earnings
statements satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder (or any similar rule
promulgated under the Securities Act) no later than 45 days after the
end of any 12-month period (or 90 days after the end of any 12-month
period if such period is a fiscal year) (i) commencing at the end of
any fiscal quarter in which Registrable Notes are sold to
underwriters in a firm commitment or best efforts underwritten
offering and (ii) if not sold to underwriters in such an offering,
commencing on the first day of the first
<PAGE> 24
-22-
fiscal quarter of the Company after the effective date of a
Registration Statement, which statements shall cover said 12-month
periods.
Upon consummation of an Exchange Offer or a Private
Exchange, obtain an opinion of counsel to the Company and the
Guarantors, in a form customary for underwritten offerings of debt
securities similar to the Notes, addressed to the Trustee for the
benefit of all Holders of Registrable Notes participating in the
Exchange Offer or the Private Exchange, as the case may be, and which
includes an opinion that (i) each of the Company and the Guarantors
has duly authorized, executed and delivered the Exchange Notes and
Private Exchange Notes and the related indenture and (ii) each of the
Exchange Notes or the Private Exchange Notes, as the case may
be, and related indenture constitute a legal, valid and binding
obligation of each of the Company and the Guarantors, enforceable
against each of the Company and the Guarantors in accordance with its
respective terms (with customary exceptions).
If an Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Registrable Notes by Holders to the
Company and the Guarantors (or to such other Person as directed by
the Company and the Guarantors) in exchange for the Exchange Notes or
the Private Exchange Notes, as the case may be, the Company and the
Guarantors shall mark, or cause to be marked, on such Registrable
Notes that such Registrable Notes are being canceled in exchange for
the Exchange Notes or the Private Exchange Notes, as the case may be;
and, in no event shall such Registrable Notes be marked as paid or
otherwise satisfied.
Cooperate with each seller of Registrable Notes covered by
any Registration Statement and the managing underwriter(s), if any,
participating in the disposition of such Registrable Notes and their
respective counsel in connection with any filings required to be made
with the National Association of Securities Dealers, Inc. (the
"NASD").
Use their respective best efforts to take all other
reasonable steps necessary to effect the registration of the
Registrable Notes covered by a Registration Statement contemplated
hereby.
<PAGE> 25
-23-
The Company and the Guarantors may require each seller of
Registrable Notes or Participating Broker-Dealer as to which any
registration is being effected to furnish to the Company and the
Guarantors such information regarding such seller or Participating
Broker-Dealer and the distribution of such Registrable Notes or
Exchange Notes to be sold by such Participating Broker-Dealer, as the
case may be, as the Company and the Guarantors may, from time to
time, reasonably request. The Company may exclude from such
registration the Registrable Notes of any seller or Participating
Broker-Dealer who fails to furnish such information within a
reasonable time after receiving such request. Each seller as to
which any Shelf Registration is being effected agrees to furnish
promptly to the Company all information required to be disclosed in
order to make the information previously furnished to the Company by
such seller not materially misleading.
Each Holder of Registrable Notes and each Participating
Broker-Dealer agrees by acquisition of such Registrable Notes or
Exchange Notes to be sold by such Participating Broker-Dealer, as the
case may be, that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 5(c)(ii),
5(c)(iv), 5(c)(v) or 5(c)(vi) hereof, such Holder will forthwith
discontinue disposition of such Registrable Notes covered by such
Registration Statement or Prospectus or Exchange Notes to be sold by
such Holder or Participating Broker-Dealer, as the case may be, until
such Holder's or Participating Broker-Dealer's receipt of the copies
of the supplemented or amended Prospectus contemplated by Section
5(k), or until it is advised in writing (the "Advice") by the Company
that the use of the applicable Prospectus may be resumed, and has
received copies of any amendments or supplements thereto. In the
event the Company shall give any such notice, each of the
Effectiveness Period and the Applicable Period shall be extended by
the number of days during such periods from and including the date of
the giving of such notice to and including the date when each seller
of Registrable Notes covered by such Registration Statement or
Exchange Notes to be sold by such Holder or Participating
Broker-Dealer, as the case may be, shall have received (x) the copies
of the supplemented or amended Prospectus contemplated by Section
5(k) or (y) the Advice.
6. Registration Expenses
(a) All fees and expenses incident to the performance of or
compliance with this Agreement by the Company and the Guarantors
shall be borne by the Company and the Guaran-
<PAGE> 26
-24-
tors, jointly and severally, whether or not the Exchange Offer
or a Shelf Registration is filed or becomes effective, including,
without limitation, (i) all registration and filing fees (including,
without limitation, (A) fees with respect to filings required to be
made with the NASD in connection with an underwritten offering and
(B) fees and expenses of compliance with state securities or Blue Sky
laws (including, without limitation, reasonable fees and
disbursements of counsel in connection with Blue Sky qualifications
of the Registrable Notes or Exchange Notes and determination of
the eligibility of the Registrable Notes or Exchange Notes for
investment under the laws of such jurisdictions in the United States
(x) where the Holders of Registrable Notes are located, in the case
of the Exchange Notes, or (y) as provided in Section 5(h), in the
case of Registrable Notes or Exchange Notes to be sold by a
Participating Broker-Dealer during the Applicable Period)), (ii)
printing expenses (including, without limitation, expenses of
printing certificates for Registrable Notes or Exchange Notes in a
form eligible for deposit with The Depository Trust Company and of
printing Prospectuses if the printing of Prospectuses is reasonably
requested by the managing underwriter or underwriters, if any, or, in
respect of Registrable Notes or Exchange Notes to be sold by any
Participating Broker-Dealer during the Applicable Period, if
reasonably requested by the Holders of a majority in aggregate
principal amount of the Registrable Notes included in any
Registration Statement or of such Exchange Notes, as the case may
be), (iii) messenger, telephone and delivery expenses, (iv) fees and
disbursements of counsel for the Company and fees and disbursements
of special counsel for the sellers of Registrable Notes (subject to
the provisions of Section 6(b)), (v) fees and disbursements of all
independent certified public accountants referred to in Section
5(n)(iii) (including, without limitation, the expenses of any special
audit and "cold comfort" letters required by or incident to such
performance), (vi) rating agency fees, (vii) Securities Act liability
insurance, if the Company and/or the Guarantors desire such
insurance, (viii) fees and expenses of the Trustee, (ix) fees and
expenses of all other Persons retained by the Company and/or the
Guarantors, (x) internal expenses of the Company and the Guarantors
(including, without limitation, all salaries and expenses of officers
and employees of the Company and the Guarantors performing legal or
accounting duties), (xi) the expense of any annual audit, (xii) the
fees and expenses incurred in connection with any listing of the
securities to be registered on any securities exchange and (xiii) the
expenses relating to printing, word processing and distributing all
Registration Statements, underwriting agree-
<PAGE> 27
-25-
ments, securities sales agreements, indentures and any other
documents necessary in order to comply with this Agreement.
(b) In connection with any Shelf Registration hereunder, the
Company and the Guarantors, jointly and severally, shall reimburse
the Holders of the Registrable Notes being registered in such
registration for the reasonable fees and disbursements of not more
than one counsel (in addition to appropriate local counsel) chosen by
the Holders of a majority in aggregate principal amount of the
Registrable Notes to be included in such Registration Statement and
other reasonable and documented out-of-pocket expenses of the Holders
of Registrable Notes incurred in connection with the registration of
the Registrable Notes. The Company and the Guarantors shall not have
any obligation to pay any underwriting fees, discounts or commissions
attributable to the sale of Registrable Securities.
7. Indemnification
(a) Each of the Company and the Guarantors, jointly and
severally, agrees to indemnify and hold harmless each Holder of
Registrable Notes and each Participating Broker-Dealer selling
Exchange Notes during the Applicable Period, the officers and
directors of each such Person, and each Person, if any, who controls
any such Person within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act (each, a
"Participant"), from and against any and all losses, claims, damages
and liabilities (including, without limitation, the reasonable and
documented legal fees and other expenses actually incurred in
connection with any suit, action or proceeding or any claim asserted)
caused by, arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus (as amended or supplemented if
the Company shall have furnished any amendments or supplements
thereto) or any preliminary Prospectus, or caused by, arising out of
or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading, except insofar as such losses,
claims, damages or liabilities are caused by any untrue statement or
omission or alleged untrue statement or omission made in reliance
upon and in conformity with information relating to any Participant
furnished to the Company in writing by such Participant expressly for
use therein; provided that the foregoing indemnity with respect to
any preliminary Prospectus shall not inure to the benefit of any
Participant (or to the benefit of an officer or director of such
Participant or any
<PAGE> 28
-26-
Person controlling such Participant) from whom the Person
asserting any such losses, claims, damages or liabilities purchased
Registrable Notes or Exchange Notes if such untrue statement or
omission or alleged untrue statement or omission made in such
preliminary Prospectus is eliminated or remedied in the related
Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) and a copy of the
related Prospectus (as so amended or supplemented) shall have been
furnished to such Participant at or prior to the sale of such
Registrable or Exchange Notes, as the case may be, to such Person.
(b) Each Participant will be required to agree, severally and
not jointly, to indemnify and hold harmless the Company and the
Guarantors, their respective directors and officers and each Person
who controls any of the Company or the Guarantors within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act
to the same extent as the foregoing indemnity from the Company and
the Guarantors to each Participant and shall have the rights and
duties given to the Company and the Guarantors in paragraph (c) of
this Section 7 (except that if the Company and the Guarantors shall
have assumed the defense thereof, such Participant shall not be
required to do so, but may employ separate counsel therein and
participate in the defense thereof but the fees and expenses of such
counsel shall be at the expense of such Participant), but only with
reference to information relating to such Participant furnished to
the Company and the Guarantors in writing by such Participant
expressly for use in any Registration Statement or Prospectus, any
amendment or supplement thereto, or any preliminary Prospectus. The
liability of any Participant under this paragraph (b) shall in no
event exceed the proceeds received by such Participant from sales of
Registrable Notes or Exchange Notes giving rise to such obligations.
(c) If any suit, action, proceeding (including any governmental
or regulatory investigation), claim or demand shall be brought or
asserted against any Person in respect of which indemnity may be
sought pursuant to either paragraph (a) or (b) of this Section 7,
such Person (the "Indemnified Person") shall promptly notify the
Person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain one counsel reasonably satisfactory
to the Indemnified Person to represent the Indemnified Person and any
others the Indemnifying Person may reasonably designate in such
proceeding and shall pay the reasonable fees and expenses incurred by
such counsel related to such proceeding. In any such
<PAGE> 29
-27-
proceeding, any Indemnified Person shall have the right to
retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Person unless (i) the
Indemnifying Person and the Indemnified Person shall have mutually
agreed in writing to the contrary, (ii) the Indemnifying Person has
failed to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding (including
any impleaded parties) include both the Indemnifying Person and the
Indemnified Person and such Indemnified Person shall have been
advised by counsel that there may be one or more legal defenses
available to it which are different from or additional to those
available to any such Indemnifying Person. It is understood that the
Indemnifying Person shall not, in connection with any proceeding or
related proceeding in the same jurisdiction, be liable for the fees
and expenses of more than one separate law firm (in addition to any
local counsel) for all Indemnified Persons, and that all such fees
and expenses shall be reimbursed as they are incurred. Any such
separate firm for the Participants and such control Persons of
Participants shall be designated in writing by Participants who sold
a majority in interest of Registrable Notes and Exchange Notes sold
by all such Participants and any such separate firm for the Company
and the Guarantors, their directors, their officers and such control
Persons of the Company and the Guarantors shall be designated in
writing by the Company. The Indemnifying Person shall not be liable
for any settlement of any proceeding effected without its prior
written consent, but if settled with such consent or if there is a
final judgment for the plaintiff for which the Indemnified Person is
entitled to indemnification pursuant to this Agreement, the
Indemnifying Person agrees to indemnify any Indemnified Person from
and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an
Indemnified Person shall have requested an Indemnifying Person to
reimburse the Indemnified Person for reasonable fees and expenses
incurred by counsel as contemplated by the third sentence of this
paragraph, the Indemnifying Person 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 60 days after
receipt by such Indemnifying Person of the aforesaid request and (ii)
such Indemnifying Person shall not have reimbursed the Indemnified
Person in accordance with such request prior to the date of such
settlement; provided, however, that the Indemnifying Person shall not
be liable for any settlement effected without its consent pursuant to
this sentence if the Indemnifying Party is contesting, in good faith,
the request for reimbursement. No Indemnifying Person shall, without
the prior written consent of
<PAGE> 30
-28-
the Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is
or could have been a party and indemnity could have been sought
hereunder by such Indemnified Person, unless such settlement includes
an unconditional release (or any other release reasonably acceptable
to the Indemnified Person) of such Indemnified Person from all
liability on claims that are the subject matter of such proceeding.
(d) If the indemnification provided for in paragraphs (a) and
(b) of this Section 7 is unavailable to an Indemnified Person in
respect of any losses, claims, damages or liabilities referred to
therein (other than as a result of the proviso set forth in Section
7(a)), then each Indemnifying Person under such paragraphs, in lieu
of indemnifying such Indemnified Person thereunder, shall contribute
to the amount paid or payable by such Indemnified Person as a result
of such losses, claims, damages or liabilities in such proportion as
is appropriate to reflect the relative fault of the Company and the
Guarantors on the one hand and the Participants on the other in
connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative fault of the Company and the
Guarantors on the one hand and the Participants on the other 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 and the Guarantors or by the Participants and
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(e) The parties agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Participants were treated as one entity for
such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an
Indemnified Person as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitations set forth above, any
reasonable legal or other expenses actually incurred by such
Indemnified Person in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this Section
7, in no event shall a Participant be required to contribute any
amount in excess of the amount by which proceeds received by such
Participant from sales of Registrable Notes or
<PAGE> 31
-29-
Exchange Notes exceeds the amount of any damages that such
Participant 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 Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
(f) The indemnity and contribution agreements contained in this
Section 7 will be in addition to any liability which the Indemnifying
Persons may otherwise have to the Indemnified Persons referred to
above.
8. Rules 144 and 144A
Each of the Company and the Guarantors covenants that it will
file the reports required to be filed by it under the Securities Act
and the Exchange Act and the rules and regulations adopted by the SEC
thereunder in a timely manner and, if at any time the Company is not
required to file such reports, it will, upon the request of any
Holder of Registrable Notes, make publicly available other
information of a like nature so long as necessary to permit sales
pursuant to Rule 144 or Rule 144A. Each of the Company and the
Guarantors further covenants that so long as any Registrable Notes
remain outstanding to make available to any Holder of Registrable
Notes in connection with any sale thereof, the information required
by Rule 144A(d)(4) under the Securities Act in order to permit
resales of such Registrable Notes pursuant to (a) such Rule 144A, or
(b) any similar rule or regulation hereafter adopted by the SEC.
9. Underwritten Registrations
If any of the Registrable Notes covered by any Shelf
Registration are to be sold in an underwritten offering, the
investment banking firm or firms that will underwrite the offering
and the manager or managers that will manage the offering will be
selected by the Holders of a majority in aggregate principal amount
of such Registrable Notes included in such offering and shall be
reasonably acceptable to the Company and the Guarantors.
No Holder of Registrable Notes may participate in any
underwritten offering hereunder unless such Holder (a) agrees to sell
such Holder's Registrable Notes on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder
to approve such arrangements and (b) completes
<PAGE> 32
-30-
and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
10. Miscellaneous
(a) Remedies. In the event of a breach by the Company or any
Guarantor of any of its obligations under this Agreement, other than
the occurrence of an event which requires payment of Additional
Interest, each Holder of Registrable Notes, in addition to being
entitled to exercise all rights provided herein, in the Indenture or,
in the case of the Initial Purchasers, in the Purchase Agreement or
granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. Each of the
Company and the Guarantors, jointly and severally, agree that
monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees, jointly and severally, that, in
the event of any action for specific performance in respect of such
breach, it shall waive the defense that a remedy at law would be
adequate.
(b) Enforcement. The Trustee shall be authorized to enforce the
provisions of this Agreement for the ratable benefit of the Holders.
(c) No Inconsistent Agreements. None of the Company or the
Guarantors has entered, as of the date hereof, and the Company and
the Guarantors shall not enter, after the date of this Agreement,
into any agreement with respect to any of their securities that is
inconsistent with the rights granted to the Holders of Registrable
Notes in this Agreement or otherwise conflicts with the provisions
hereof. None of the Company or the Guarantors has entered or will
enter into any agreement with respect to any of its securities which
will grant to any Person piggy-back rights with respect to a
Registration Statement required to be filed under this Agreement.
(d) Adjustments Affecting Registrable Notes. Neither the
Company nor the Guarantors shall, directly or indirectly, take any
action with respect to the Registrable Notes as a class that would
adversely affect the ability of the Holders of Registrable Notes to
include such Registrable Notes in a registration undertaken pursuant
to this Agreement.
(e) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not
<PAGE> 33
-31-
be amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, unless the
Company and the Guarantors have obtained the written consent of
Holders of at least a majority of the then outstanding aggregate
principal amount of Registrable Notes. Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof
with respect to a matter that relates exclusively to the rights of
Holders of Registrable Notes whose securities are being sold pursuant
to a Registration Statement and that does not directly or indirectly
affect, impair, limit or compromise the rights of other Holders of
Registrable Notes may be given by Holders of at least a majority in
aggregate principal amount of the Registrable Notes being sold by
such Holders pursuant to such Registration Statement, provided that
the provisions of this sentence may not be amended, modified or
supplemented except in accordance with the provisions of the
immediately preceding sentence.
(f) Notices. All notices and other communications (including
without limitation any notices or other communications to the
Trustee) provided for or permitted hereunder shall be made in writing
by hand-delivery, registered first-class mail, next-day courier or
telecopier:
(i) if to a Holder of Registrable Notes or any Participating
Broker-Dealer, at the most current address given by the Trustee to
the Company; and
(ii) if to the Company or the Guarantors, to Hayes
Wheels International, Inc., 38341 Huron River Drive, Romulus,
Michigan 48174, Attention: General Counsel and with a copy to
Skadden, Arps, Slate, Meagher & Flom LLP, One Rodney Square,
Wilmington, Delaware 19801, Attention: Robert B. Pincus, Esq.
All such notices and communications shall be deemed to have been
duly given: (i) when delivered by hand, if personally delivered;
(ii) five business days after being deposited in the mail, postage
prepaid, if mailed; (iii) one business day after being timely
delivered to a next-day courier; and (iv) when receipt is
acknowledged by the addressee, if telecopied.
Copies of all such notices, demands or other communications
shall be concurrently delivered by the Person giving the same to the
Trustee under the Indenture at the address specified in such
Indenture.
<PAGE> 34
-32-
(g) 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 of Registrable Notes.
(h) 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.
(i) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect
the meaning hereof.
(j) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS
APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS. EACH OF THE
PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF
THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT.
(k) Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set
forth herein shall remain in full force and effect and shall in no
way be affected, impaired or invalidated, and the parties hereto
shall use their best efforts to find and employ an alternative means
to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction.
(l) Entire Agreement. This Agreement, together with the
Purchase Agreement and the Indenture, is intended by the parties as a
final expression of their agreement, and is 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 and
therein.
(m) Joint and Several Obligations. Unless otherwise stated
herein, each of the obligations of the Company and the Guarantors
under this Agreement shall be joint and several obligations of each
of them.
<PAGE> 35
-33-
(n) Notes Held by the Company or their Affiliates. Whenever the
consent or approval of Holders of a specified percentage of
Registrable Notes is required hereunder, Registrable Notes held by
the Company or their affiliates (as such term is defined in Rule 405
under the Securities Act) shall not be counted in determining whether
such consent or approval was given by the Holders of such required
percentage.
<PAGE> 36
-34-
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above.
HAYES WHEELS INTERNATIONAL, INC.,
a Delaware corporation
By:__________________________________
Name:
Title:
Guarantors:
HAYES WHEELS INTERNATIONAL-
CALIFORNIA, INC., a Delaware
corporation
By:__________________________________
Name:
Title:
HAYES WHEELS INTERNATIONAL-GEORGIA,
INC., a Delaware corporation
By:__________________________________
Name:
Title:
HAYES WHEELS INTERNATIONAL-INDIANA,
INC., a Delaware corporation
By:__________________________________
Name:
Title:
<PAGE> 37
-35-
HAYES WHEELS INTERNATIONAL-MEXICO,
INC., a Delaware corporation
By:__________________________________
Name:
Title:
HAYES WHEELS INTERNATIONAL-MICHIGAN,
INC., a Delaware corporation
By:__________________________________
Name:
Title:
MOTOR WHEEL CORPORATION,
an Ohio corporation
By:__________________________________
Name:
Title:
MWC ACQUISITION SUB, INC.,
a Delaware corporation
By:__________________________________
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
CIBC WOOD GUNDY SECURITIES CORP.
By:____________________________
Name:
Title:
<PAGE> 38
-3-
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
By:
---------------------------------
Name:
Title:
BEAR, STEARNS & CO. INC.
By:
---------------------------------
Name:
Title:
MORGAN STANLEY & CO. INCORPORATED
By:
---------------------------------
Name:
Title:
SALOMON BROTHERS INC
By:
---------------------------------
Name:
Title:
<PAGE> 1
EXHIBIT 4.4
- --------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
Dated as of July 22, 1997
by and among
HAYES WHEELS INTERNATIONAL, INC.,
THE GUARANTORS
named herein
and
THE INITIAL PURCHASERS
named herein
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Definitions ........................................................... 1
Exchange Offer ........................................................ 5
Shelf Registration .................................................... 9
Additional Interest ................................................... 10
Registration Procedures ............................................... 12
Registration Expenses ................................................. 23
Indemnification ....................................................... 25
Rules 144 and 144A .................................................... 29
Underwritten Registrations ............................................ 29
Miscellaneous ......................................................... 30
(a) Remedies ......................................................... 30
(b) Enforcement ...................................................... 30
(c) No Inconsistent Agreements ....................................... 30
(d) Adjustments Affecting Registrable Notes .......................... 30
(e) Amendments and Waivers ........................................... 30
(f) Notices .......................................................... 31
(g) Successors and Assigns ........................................... 32
(h) Counterparts ..................................................... 32
(i) Headings ......................................................... 32
(j) GOVERNING LAW .................................................... 32
(k) Severability ..................................................... 32
(l) Entire Agreement ................................................. 32
(m) Joint and Several Obligations .................................... 32
(n) Notes Held by the Company or their Affiliates .................... 33
</TABLE>
-i-
<PAGE> 3
REGISTRATION RIGHTS AGREEMENT (the "Agreement") dated as of July 22,
1997, by and among HAYES WHEELS INTERNATIONAL, INC., a Delaware corporation (the
"Company"), the Guarantors as listed on the signature pages hereto (the
"Guarantors"), and CIBC WOOD GUNDY SECURITIES CORP. ("CIBC") and MERRILL LYNCH,
PIERCE, FENNER & SMITH INCORPORATED, as initial purchasers (the "Initial
Purchasers").
This Agreement is entered into in connection with the Purchase
Agreement, dated as of July 16, 1997 among the Company, the Guarantors and the
Initial Purchasers (the "Purchase Agreement") relating to the sale by the
Company to the Initial Purchasers of $150,000,000 aggregate principal amount of
the Company's 9 1/8% Senior Subordinated Notes due 2007 (the "Notes") and the
guarantee of the Notes by the Guarantors (the "Guarantees"). In order to induce
the Initial Purchasers to enter into the Purchase Agreement, the Company and the
Guarantors have agreed to provide the registration rights set forth in this
Agreement to the Initial Purchasers and their direct and indirect transferees
and assigns. The execution and delivery of this Agreement is a condition to the
Initial Purchasers' obligation to purchase the Notes under the Purchase
Agreement.
The parties hereby agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the
following meanings:
Additional Interest: See Section 4(a).
Advice: See Section 5.
Applicable Period: See Section 2(b).
Closing: See the Purchase Agreement.
Company: See the introductory paragraph to this Agreement.
Effectiveness Date: The 120th day after the Issue Date.
Effectiveness Period: See Section 3(a).
Event Date: See Section 4(c).
<PAGE> 4
-2-
Exchange Act: The Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
Exchange Notes: See Section 2(a).
Exchange Offer: See Section 2(a).
Exchange Registration Statement: See Section 2(a).
Filing Date: The 60th day after the Issue Date.
Guarantees: See the introductory paragraph of this Agreement.
Holder: Any holder of a Registrable Note or Registrable Notes.
Indemnified Person: See Section 7(c).
Indemnifying Person: See Section 7(c).
Indenture: The Indenture, dated as of July 15, 1997, among the
Company, the Guarantors and The Bank of New York, as trustee, pursuant to which
the Notes are being issued, as amended or supplemented from time to time in
accordance with the terms thereof.
Initial Purchasers: See the introductory paragraph to this
Agreement.
Initial Shelf Registration: See Section 3(a).
Inspectors: See Section 5(o).
Issue Date: The date on which the original Notes are sold to the
Initial Purchasers pursuant to the Purchase Agreement.
NASD: See Section 5(t).
Notes: See the introductory paragraph to this Agreement.
Participant: See Section 7(a).
Participating Broker-Dealer: See Section 2(b).
<PAGE> 5
-3-
Person: An individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government (including any agency or political
subdivision thereof).
Private Exchange: See Section 2(b).
Private Exchange Notes: See Section 2(b).
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, any prospectus subject to completion and a
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by any
prospectus supplement, with respect to the terms of the offering of any portion
of the Registrable Notes covered by such Registration Statement, and all other
amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
Purchase Agreement: See the introductory paragraphs to this
Agreement.
Records: See Section 5(o).
Registrable Notes: The Notes upon original issuance of the Notes
and at all times subsequent thereto and, if issued, the Private Exchange Notes,
until in the case of any such Notes or any such Private Exchange Notes, as the
case may be, (i) a Registration Statement covering such Notes or such Private
Exchange Notes has been declared effective by the SEC and such Notes or such
Private Exchange Notes, as the case may be, have been exchanged and/or disposed
of in accordance with such effective Registration Statement, (ii) such Notes or
such Private Exchange Notes, as the case may be, are sold in compliance with
Rule 144, (iii) in the case of any Note, such Note has been exchanged for an
Exchange Note or Exchange Notes pursuant to an Exchange Offer or (iv) such Notes
or such Private Exchange Notes, as the case may be, cease to be outstanding.
Registration Default: See Section 4(a).
Registration Statement: Any registration statement of the Company
or the Guarantors, including, but not limited to, the Exchange Registration
Statement, which covers any of the Registrable Notes pursuant to the provisions
of this Agree-
<PAGE> 6
-4-
ment, including the Prospectus, amendments and supplements to such registration
statement, including post-effective amendments, all exhibits, and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statement.
Rule 144: Rule 144 promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule (other than Rule
144A) or regulation hereafter adopted by the SEC providing for offers and sales
of securities made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of an issuer of such securities being
free of the registration and prospectus delivery requirements of the Securities
Act.
Rule 144A: Rule 144A promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule (other than Rule 144)
or regulation hereafter adopted by the SEC providing for offers and sales of
securities made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of an issuer of such securities being
free of the registration and prospectus delivery requirements of the Securities
Act.
Rule 415: Rule 415 promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
Shelf Notice: See Section 2(c).
Shelf Registration: See Section 3(b).
Subsequent Shelf Registration: See Section 3(b).
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The trustee under the Indenture and, if existent, the
trustee under any indenture governing the Exchange Notes and Private Exchange
Notes (if any).
Underwritten registration or underwritten offering: A registration
under the Securities Act in which securities of
<PAGE> 7
-5-
the Company are sold to an underwriter(s) for reoffering to the public.
2. Exchange Offer
(a) Each of the Company and the Guarantors jointly and severally
agrees to use its best efforts to file with the SEC as soon as practicable after
the Closing, but in no event later than the Filing Date, documents pertaining to
an offer to exchange (the "Exchange Offer") any and all of the Registrable Notes
for a like aggregate principal amount of debt securities of the Company,
guaranteed by the Guarantors, which are identical in all material respects to
the Notes (the "Exchange Notes") (and which are entitled to the benefits of the
Indenture or a trust indenture which is substantially identical to the Indenture
(other than such changes to the Indenture or any such identical trust indenture
as are necessary to comply with any requirements of the SEC to effect or
maintain the qualification thereof under the TIA) and which, in either case, has
been qualified under the TIA), except that the Exchange Notes shall have been
registered pursuant to an effective registration statement under the Securities
Act and will not contain terms with respect to transfer restrictions. The
documents pertaining to the Exchange Offer will be filed under the Securities
Act on the appropriate form (the "Exchange Registration Statement") and the
Exchange Offer will comply with all applicable tender offer rules and
regulations under the Exchange Act. Each of the Company and the Guarantors
jointly and severally agrees to use its best efforts to (x) cause the Exchange
Registration Statement to become effective under the Securities Act on or before
the Effectiveness Date; (y) keep the Exchange Offer open for at least 30 days
(or longer if required by applicable law) after the date that notice of the
Exchange Offer is mailed to Holders; and (z) consummate the Exchange Offer on or
prior to the 150th day (or, in the event of any extension of the Exchange Offer
required by applicable law, the earliest day following any such extension)
following the Issue Date. Each Holder who participates in the Exchange Offer
will be required to represent that any Exchange Notes received by it will be
acquired in the ordinary course of its business, that at the time of the
consummation of the Exchange Offer such Holder will have no arrangement or
understanding with any Person to participate in the distribution of the Exchange
Notes in violation of the provisions of the Securities Act, that such Holder is
not an affiliate of any of the Company or the Guarantors within the meaning of
Rule 405 promulgated under the Securities Act or if it is such an affiliate,
that it will comply with the registration and prospectus delivery requirements
of the Securities
<PAGE> 8
-6-
Act, to the extent applicable and that is not acting on behalf of any Person
who could not truthfully make the foregoing representations. Upon consummation
of the Exchange Offer in accordance with this Section 2, the provisions of this
Agreement shall continue to apply, mutatis mutandis, solely with respect to
Registrable Notes that are Private Exchange Notes and Exchange Notes held by
Participating Broker-Dealers, and the Company and the Guarantors shall have no
further obligation to register Registrable Notes (other than Private Exchange
Notes and Exchange Notes held by Participating Broker-Dealers) pursuant to
Section 3 of this Agreement.
(b) The Company and the Guarantors shall include within the
Prospectus contained in the Exchange Registration Statement a section entitled
"Plan of Distribution,"reasonably acceptable to the Initial Purchasers, which
shall contain a summary statement of the positions taken or policies made by the
staff of the SEC with respect to the potential "underwriter" status of any
broker-dealer that is the beneficial owner (as defined in Rule 13d-3 promulgated
under the Exchange Act) of Exchange Notes received by such broker-dealer in the
Exchange Offer (a "Participating Broker-Dealer"), whether such positions or
policies have been publicly disseminated by the staff of the SEC or such
positions or policies, in the reasonable judgment of the Initial Purchasers,
represent the prevailing views of the staff of the SEC. Such "Plan of
Distribution" section shall also allow the use of the Prospectus by all Persons
subject to the prospectus delivery requirements of the Securities Act, including
all Participating Broker-Dealers, and include a statement describing the means
by which Participating Broker-Dealers may resell the Exchange Notes.
Each of the Company and the Guarantors shall use its best efforts to
keep the Exchange Registration Statement effective and to amend and supplement
the Prospectus contained therein in order to permit such Prospectus to be
lawfully delivered by all Persons subject to the prospectus delivery
requirements of the Securities Act for such period of time as such Persons must
comply with such requirements in order to resell the Exchange Notes, provided
that such period shall not exceed 180 days (or such longer period if extended
pursuant to the last paragraph of Section 5) (the "Applicable Period").
If, prior to consummation of the Exchange Offer, the Initial
Purchasers hold any Notes acquired by them and having, or which are reasonably
likely to be determined to have, the status as an unsold allotment in the
initial distribution, the Company and the Guarantors upon the request of such
Initial
<PAGE> 9
-7-
Purchasers shall, simultaneously with the delivery of the Exchange Notes in the
Exchange Offer, issue and deliver to such Initial Purchasers, in exchange (the
"Private Exchange") for the Notes held by such Initial Purchasers, a like
principal amount of debt securities of the Company guaranteed by the
Guarantors, that are identical in all material respects to the Exchange Notes
(the "Private Exchange Notes") (and which are issued pursuant to the same
indenture as the Exchange Notes) except for the placement of a restrictive
legend on the Private Exchange Notes. If possible, the Private Exchange Notes
shall bear the same CUSIP number as the Exchange Notes. Interest on the
Exchange Notes and Private Exchange Notes will accrue from (A) the later of (i)
the last interest payment date on which interest was paid on the Notes
surrendered in exchange therefor or (ii) if the Notes are surrendered for
exchange on a date in a period which includes the record date for an interest
payment date to occur on or after the date of such exchange and as to which
interest will be paid, the date of such interest payment date or (B) if no
interest has been paid on the Notes, from the Issue Date.
In connection with the Exchange Offer, the Company and the
Guarantors shall:
(i) mail to each Holder a copy of the Prospectus forming part of the
Exchange Registration Statement, together with an appropriate letter of
transmittal and related documents;
(ii) utilize the services of a depositary for the Exchange Offer
with an address in the Borough of Manhattan, The City of New York; and
(iii) permit Holders to withdraw tendered Notes at any time prior to
the close of business, New York City time, on the last business day on
which the Exchange Offer shall remain open.
As soon as practicable after the close of the Exchange Offer or the
Private Exchange, as the case may be, the Company and the Guarantors shall:
(i) accept for exchange all Notes tendered and not validly withdrawn
pursuant to the Exchange Offer or the Private Exchange;
(ii) deliver to the Trustee for cancellation all Notes so accepted
for exchange; and
<PAGE> 10
-8-
(iii) cause the Trustee to authenticate and deliver promptly to each
Holder of Notes, Exchange Notes or Private Exchange Notes, as the case
may be, equal in principal amount to the Notes of such Holder so accepted
for exchange.
The Exchange Notes and the Private Exchange Notes may be issued
under (i) the Indenture or (ii) an indenture substantially identical to the
Indenture, which in either event will provide that (1) the Exchange Notes will
not be subject to the transfer restrictions set forth in the Indenture and (2)
the Private Exchange Notes will be subject to the transfer restrictions set
forth in the Indenture. The Indenture or such indenture shall provide that the
Exchange Notes, the Private Exchange Notes and the Notes will have the right to
vote and give consents together on all matters presented to such holders for
votes or consents as one class and that neither the Exchange Notes, the Private
Exchange Notes nor the Notes will have the right to vote or consent as a
separate class on any matter.
(c) If (1) prior to the consummation of the Exchange Offer, the
Company and the Guarantors or Holders of at least a majority in aggregate
principal amount of the Registrable Notes reasonably determine in good faith
that (i) the Exchange Notes would not, upon receipt, be freely transferable by
such Holders which are not affiliates (within the meaning of the Securities Act)
of the Company or the Guarantors without restriction under the Securities Act
and without restrictions under applicable state securities laws, (ii) the
interests of the Holders under this Agreement would be adversely affected by the
consummation of the Exchange Offer or (iii) after conferring with counsel, the
SEC is unlikely to permit the commencement of the Exchange Offer prior to the
Effectiveness Date, (2) subsequent to the consummation of the Private Exchange,
any holder of the Private Exchange Notes so requests or (3) the Exchange Offer
is commenced and not consummated within 150 days of the Issue Date, then the
Company and the Guarantors shall promptly deliver to the Holders and the Trustee
written notice thereof (the "Shelf Notice") and shall file an Initial Shelf
Registration pursuant to Section 3. Following the delivery of a Shelf Notice to
the Holders of Registrable Notes (in the circumstances contemplated by clauses
(1) and (3) of the preceding sentence), the Company and the Guarantors shall not
have any further obligation to conduct the Exchange Offer or the Private
Exchange under this Section 2.
<PAGE> 11
-9-
3. Shelf Registration
If a Shelf Notice is required to be delivered as contemplated by
Section 2(c), then:
(a) Initial Shelf Registration. The Company and the Guarantors
shall prepare and file with the SEC a Registration Statement for an offering to
be made on a continuous basis pursuant to Rule 415 covering all of the then
existing Registrable Notes (the "Initial Shelf Registration"). If the Company
and the Guarantors shall have not yet filed an Exchange Registration Statement,
each of the Company and the Guarantors shall use its best efforts to file with
the SEC the Initial Shelf Registration on or prior to the Filing Date. In any
other instance, each of the Company and the Guarantors shall use its best
efforts to file with the SEC the Initial Shelf Registration as promptly as
practicable following delivery of the Shelf Notice. The Initial Shelf
Registration shall be on Form S-3 or another appropriate form permitting
registration of such Registrable Notes for resale by such Holders in the manner
or manners designated by them (including, without limitation, one or more
underwritten offerings). The Company and the Guarantors shall not permit any
securities other than the Registrable Notes to be included in the Initial Shelf
Registration or any Subsequent Shelf Registration. Each of the Company and the
Guarantors shall use its best efforts to cause the Initial Shelf Registration to
be declared effective under the Securities Act, if an Exchange Registration
Statement has not yet been declared effective, on or prior to the Effectiveness
Date, or, in any other instance, as soon as practicable after the filing thereof
and in no event later than 90 days following delivery of the Shelf Notice, and
to keep the Initial Shelf Registration continuously effective under the
Securities Act until the date which is 24 months from the date on which such
Initial Shelf Registration is declared effective (subject to extension pursuant
to the last paragraph of Section 5 hereof), or such shorter period ending when
all Registrable Notes covered by the Initial Shelf Registration have been sold
in the manner set forth and as contemplated in the Initial Shelf Registration
(the "Effectiveness Period").
(b) Subsequent Shelf Registrations. If the Initial Shelf
Registration or any Subsequent Shelf Registration ceases to be effective for any
reason at any time prior to the termination of the Effectiveness Period, each of
the Company and the Guarantors shall use its best efforts to promptly restore
the effectiveness thereof, and in any event shall, within 45 days of such
cessation of effectiveness, amend the Shelf Registra-
<PAGE> 12
-10-
tion in a manner reasonably expected to restore the effectiveness thereof, or
file an additional "shelf" Registration Statement pursuant to Rule 415 covering
all of the then existing Registrable Notes (a "Subsequent Shelf Registration").
If a Subsequent Shelf Registration is filed, each of the Company and the
Guarantors shall use its best efforts to cause the Subsequent Shelf
Registration to be declared effective as soon as practicable after such filing
and to keep such Registration Statement continuously effective during the
Effectiveness Period. As used herein the term "Shelf Registration" means the
Initial Shelf Registration and any Subsequent Shelf Registration.
(c) Supplements and Amendments. The Company and the Guarantors
shall promptly supplement and amend the Shelf Registration if required by the
rules, regulations or instructions applicable to the registration form used for
such Shelf Registration or if required by the Securities Act. The Company and
the Guarantors shall promptly supplement and amend the Shelf Registration if any
such supplement or amendment is reasonably requested by the Holders of a
majority in aggregate principal amount of the Registrable Notes covered by such
Registration Statement or by any underwriter(s) of such Registrable Notes.
4. Additional Interest
(a) The Company and the Initial Purchasers agree that the Holders of
Registrable Notes will suffer damages if the Company fails to fulfill its
obligations under Section 2 or Section 3 hereof and that it would not be
feasible to ascertain the extent of such damages with precision. Accordingly,
the Company agrees to pay additional interest on the Notes ("Additional
Interest") under the circumstances and to the extent set forth below:
(i) if neither the Exchange Registration Statement nor the Initial
Shelf Registration has been filed on or prior to the Filing Date;
(ii) if neither the Exchange Registration Statement nor the Initial
Shelf Registration has been declared effective on or prior to the
Effectiveness Date;
(iii) if an Initial Shelf Registration required by Section 2(c)(2)
has not been filed on or prior to the date 45 days after delivery of the
Shelf Notice;
<PAGE> 13
-11-
(iv) if an Initial Shelf Registration required by Section 2(c)(2)
has not been declared effective on or prior to the date 90 days after the
delivery of the Shelf Notice; and/or
(v) if (A) the Company has not exchanged the Exchange Notes for all
Notes validly tendered in accordance with the terms of the Exchange Offer
on or prior to the date 150 days after the Issue Date or (B) the Exchange
Registration Statement ceases to be effective at any time prior to the
time that the Exchange Offer is consummated or (C) if applicable, the
Shelf Registration has been declared effective and such Shelf
Registration ceases to be effective at any time prior to the termination
of the Effectiveness Period;
(each such event referred to in clauses (i) through (v) above is a
"Registration Default"). The sole remedy available to Holders of the Notes for
a Registration Default will be the accrual of Additional Interest as follows:
the per annum interest rate on the Notes will increase by .50% during the first
90-day period following the occurrence of a Registration Default and until it
is waived or cured; and the per annum interest rate will increase by an
additional .25% for each subsequent 90-day period during which the Registration
Default remains uncured, up to a maximum additional interest rate of 2.0% per
annum, provided, however, that only Holders of Private Exchange Notes shall be
entitled to receive Additional Interest as a result of a Registration Default
pursuant to clause (iii) or (iv), provided, further, that (1) upon the filing
of the Exchange Registration Statement or the Initial Shelf Registration (in
the case of (i) above), (2) upon the effectiveness of the Exchange Registration
Statement or a Shelf Registration (in the case of (ii) above), (3) upon the
filing of the Shelf Registration (in the case of (iii) above), (4) upon the
effectiveness of the Shelf Registration (in the case of (iv) above), or (5)
upon the exchange of Exchange Notes for all Notes tendered or the effectiveness
of a Shelf Registration (in the case of (v)(A) above), or upon the subsequent
effectiveness of the Exchange Registration Statement which had ceased to remain
effective or the effectiveness of a Shelf Registration (in the case of (v)(B)
above), or upon the subsequent effectiveness of the Shelf Registration which
had ceased to remain effective (in the case of (v)(C) above), Additional
Interest on the Notes as a result of such clause (i), (ii), (iii), (iv) or (v)
(or the relevant subclause thereof), as the case may be, shall cease to accrue
and the interest rate on the Notes will revert to the interest rate originally
borne by the Notes.
<PAGE> 14
-12-
(b) Notwithstanding the foregoing, no Additional Interest will be
payable with respect to a Registration Default described in clause (v)(C) above,
if pending a material corporate transaction, the Company issues a notice that
the Registration Statement, or the prospectus contained therein, is unusable, or
such notice is required under applicable securities laws to be issued by the
Company, and the aggregate number of days in any consecutive twelve month period
for which the Registration Statement, or the Prospectus contained therein, is
unusable pursuant to all such notices has not exceeded 75 days in the aggregate.
(c) The Company and the Guarantors shall notify the Trustee within
one business day after each and every date on which an event occurs in respect
of which Additional Interest is required to be paid (an "Event Date"). Any
amounts of Additional Interest due pursuant to (a)(i), (a)(ii) or (a)(iii) of
this Section 4 will be payable in cash semi-annually on each January 15 and July
15 (to the Holders of record on the January 1 and July 1 immediately preceding
such dates), commencing with the first such date occurring after any such
Additional Interest commences to accrue and until such Registration Default is
cured, by depositing with the Trustee, in trust for the benefit of such Holders,
immediately available funds in sums sufficient to pay such Additional Interest.
The amount of Additional Interest will be determined by multiplying the
applicable Additional Interest rate by the principal amount of the Registrable
Notes, multiplied by a fraction, the numerator of which is the number of days
such Additional Interest rate was applicable during such period (determined on
the basis of a 360-day year comprised of twelve 30-day months and, in the case
of a partial month, the actual number of days elapsed), and the denominator of
which is 360.
5. Registration Procedures
In connection with the filing of any Registration Statement pursuant
to Section 2 or 3 hereof, the Company and the Guarantors shall effect such
registrations to permit the sale of the securities covered thereby in accordance
with the intended method or methods of disposition thereof, and pursuant thereto
the Company and the Guarantors shall:
(a) Prepare and file with the SEC, as provided herein, a
Registration Statement or Registration Statements as prescribed by
Section 2 or 3, and use their respective best efforts to cause each such
Registration Statement to become effective and remain effective as pro-
<PAGE> 15
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vided herein, provided that, if (1) such filing is pursuant to Section 3,
or (2) a Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Notes
during the Applicable Period, before filing any Registration Statement or
Prospectus or any amendments or supplements thereto, the Company and the
Guarantors shall, if requested, furnish to and afford the Holders of the
Registrable Notes covered by such Registration Statement and each such
Participating Broker-Dealer, as the case may be, their counsel and the
managing underwriter(s), if any, a reasonable opportunity to review
copies of all such documents (including copies of any documents to be
incorporated by reference therein and all exhibits thereto) proposed to
be filed (to the extent practicable, at least 5 business days prior to
such filing). The Company and the Guarantors shall not file any
Registration Statement or Prospectus or any amendments or supplements
thereto in respect of which the Holders must be afforded an opportunity
to review prior to the filing of such document, if the Holders of a
majority in aggregate principal amount of the Registrable Notes covered
by such Registration Statement, or such Participating Broker-Dealer, as
the case may be, their counsel, or the managing underwriter(s), if any,
reasonably object to information concerning the Holders or such
Participating Broker-Dealer contained therein.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to each Shelf Registration or Exchange Registration Statement,
as the case may be, as may be necessary to keep such Registration
Statement continuously effective for the Effectiveness Period or the
Applicable Period, as the case may be; cause the related Prospectus to be
supplemented by any prospectus supplement required by applicable law, and
as so supplemented to be filed pursuant to Rule 424 (or any similar
provisions then in force) under the Securities Act; and comply with the
provisions of the Securities Act and the Exchange Act applicable to them
with respect to the disposition of all securities covered by such
Registration Statement as so amended or in such Prospectus as so
supplemented and with respect to the subsequent resale of any securities
being sold by a Participating Broker-Dealer covered by any such
Prospectus; the Company and the Guarantors shall be deemed not to have
used their best efforts to keep a Registration Statement effective during
the Applicable Period if any of them voluntarily takes any action that
would result in
<PAGE> 16
-14-
selling Holders of the Registrable Notes covered thereby or Participating
Broker-Dealers seeking to sell Exchange Notes not being able to sell such
Registrable Notes or such Exchange Notes during that period unless such
action is required by applicable law or unless the Company and the
Guarantors comply with this Agreement, including without limitation, the
provisions of clauses 5(c)(v) and (vi) below.
(c) If (1) a Shelf Registration is filed pursuant to Section 3, or
(2) a Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Notes
during the Applicable Period, notify the selling Holders of Registrable
Notes, or each such Participating Broker-Dealer, as the case may be,
their counsel and the managing underwriter(s), if any, promptly (but in
any event within two business days), and confirm such notice in writing,
(i) when a Prospectus or any prospectus supplement or post-effective
amendment thereto has been filed, and, with respect to a Registration
Statement or any post-effective amendment thereto, when the same has
become effective under the Securities Act (including in such notice a
written statement that any Holder may, upon request, obtain, without
charge, one conformed copy of such Registration Statement or
post-effective amendment thereto including financial statements and
schedules, documents incorporated or deemed to be incorporated by
reference and exhibits), (ii) of the issuance by the SEC of any stop
order suspending the effectiveness of a Registration Statement or of any
order preventing or suspending the use of any preliminary Prospectus or
the initiation of any proceedings for that purpose, (iii) if at any time
when a Prospectus is required by the Securities Act to be delivered in
connection with sales of the Registrable Notes or resales of Exchange
Notes by Participating Broker-Dealers the representations and warranties
of the Company contained in any agreement (including any underwriting
agreement) contemplated by Section 5(n) below cease to be true and
correct, (iv) of the receipt by any of the Company or the Guarantors of
any notification with respect to the suspension of the qualification or
exemption from qualification of a Registration Statement or any of the
Registrable Notes or the Exchange Notes to be sold by any Participating
Broker-Dealer for offer or sale in any jurisdiction, or the initiation or
threatening of any proceeding for such purpose, (v) of the happening of
any
<PAGE> 17
-15-
event or any information becoming known that makes any statement made in
such Registration Statement or related Prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in
any material respect or that requires the making of any changes in, or
amendments or supplements to, such Registration Statement, Prospectus or
documents so that, in the case of the Registration Statement, it will not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, and that in the case of the
Prospectus, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, and (vi) of the Company's or
any Guarantor's reasonable determination that a post-effective amendment
to a Registration Statement would be necessary or appropriate.
(d) If (1) a Shelf Registration is filed pursuant to Section 3, or
(2) a Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Notes
during the Applicable Period, use their best efforts to prevent the
issuance of any order suspending the effectiveness of a Registration
Statement or of any order preventing or suspending the use of a
Prospectus or suspending the qualification (or exemption from
qualification) of any of the Registrable Notes or the Exchange Notes to
be sold by any Participating Broker-Dealer, for sale in any jurisdiction,
and, if any such order is issued, to use their best efforts to obtain the
withdrawal of any such order as promptly as practicable.
(e) If a Shelf Registration is filed pursuant to Section 3 and if
requested by the managing underwriter(s), if any, or the Holders of a
majority in aggregate principal amount of the Registrable Notes being
sold in connection with an underwritten offering, (i) promptly
incorporate in a Prospectus supplement or post-effective amendment such
information as the managing underwriter(s), if any, or such Holders
reasonably request to be included therein and (ii) make all required
filings of such Prospectus supplement or such post-effective amendment as
soon as practicable after the Company has received notifi-
<PAGE> 18
-16-
cation of the matters to be incorporated in such Prospectus supplement or
post-effective amendment.
(f) If (1) a Shelf Registration is filed pursuant to Section 3, or
(2) a Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Notes
during the Applicable Period, furnish to each selling Holder of
Registrable Notes who so requests and to each such Participating
Broker-Dealer who so requests and to counsel and the managing
underwriter(s), if any, without charge, one conformed copy of the
Registration Statement or Registration Statements and each post-effective
amendment thereto, including financial statements and schedules, and, if
requested, all documents incorporated or deemed to be incorporated
therein by reference and all exhibits.
(g) If (1) a Shelf Registration is filed pursuant to Section 3, or
(2) a Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Notes
during the Applicable Period, deliver to each selling Holder of
Registrable Notes, or each such Participating Broker-Dealer, as the case
may be, their counsel, and the managing underwriter or underwriters, if
any, without charge, as many copies of the Prospectus or Prospectuses
(including each form of preliminary Prospectus) and each amendment or
supplement thereto and any documents incorporated by reference therein as
such Persons may reasonably request; and, subject to the last paragraph
of this Section 5, each of the Company and the Guarantors hereby consents
to the use of such Prospectus and each amendment or supplement thereto by
each of the selling Holders of Registrable Notes or each such
Participating Broker-Dealer, as the case may be, and the managing
underwriter or underwriters or agents, if any, and dealers (if any), in
connection with the offering and sale of the Registrable Notes covered
by, or the sale by Participating Broker-Dealers of the Exchange Notes
pursuant to, such Prospectus and any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Notes or any
delivery of a Prospectus contained in the Exchange Registration Statement
by any Participating Broker-Dealer who seeks to sell Exchange Notes
during the Appli-
<PAGE> 19
-17-
cable Period, to use their best efforts to register or qualify, and to
cooperate with the selling Holders of Registrable Notes or each such
Participating Broker-Dealer, as the case may be, the managing underwriter
or underwriters, if any, and their respective counsel in connection with
the registration or qualification of (or exemption from such registration
or qualification), such Registrable Notes for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United
States as any selling Holder, Participating Broker-Dealer, or the
managing underwriter or underwriters, if any, reasonably request in
writing, provided that where Exchange Notes held by Participating
Broker-Dealers or Registrable Notes are offered other than through an
underwritten offering, the Company and the Guarantors agree to cause
their counsel to perform Blue Sky investigations and file registrations
and qualifications required to be filed pursuant to this Section 5(h);
keep each such registration or qualification (or exemption therefrom)
effective during the period such Registration Statement is required to be
kept effective and do any and all other acts or things reasonably
necessary or advisable to enable the disposition in such jurisdictions of
the Exchange Notes held by Participating Broker-Dealers or the
Registrable Notes covered by the applicable Registration Statement;
provided that none of the Company or the Guarantors shall be required to
(A) qualify generally to do business in any jurisdiction where it is not
then so qualified, (B) take any action that would subject it to general
service of process in any such jurisdiction where it is not then so
subject or (C) subject itself to taxation in any such jurisdiction where
it is not otherwise so subject.
(i) If a Shelf Registration is filed pursuant to Section 3,
cooperate with the selling Holders of Registrable Notes and the managing
underwriter or underwriters, if any, to facilitate the timely preparation
and delivery of certificates representing Registrable Notes to be sold,
which certificates shall not bear any restrictive legends and shall be in
a form eligible for deposit with The Depository Trust Company; and enable
such Registrable Notes to be in such denominations and registered in such
names as the managing underwriter or underwriters, if any, or Holders may
reasonably request.
(j) Use their best efforts to cause the Registrable Notes covered by
the Registration Statement to be registered with or approved by such
other governmental agencies
<PAGE> 20
-18-
or authorities as may be necessary to enable the seller or sellers
thereof or the managing underwriter or underwriters, if any, to
consummate the disposition of such Registrable Notes, except as may be
required solely as a consequence of the nature of such selling Holder's
business, in which case each of the Company and the Guarantors will
cooperate in all reasonable respects with the filing of such Registration
Statement and the granting of such approvals.
(k) If (1) a Shelf Registration is filed pursuant to Section 3, or
(2) a Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Notes
during the Applicable Period, upon the occurrence of any event
contemplated by paragraph 5(c)(v) or 5(c)(vi), as promptly as reasonably
practicable prepare and (subject to Section 5(a)) file with the SEC, at
the joint and several expense of each of the Company and the Guarantors,
a supplement or post-effective amendment to the Registration Statement or
a supplement to the related Prospectus or any document incorporated or
deemed to be incorporated therein by reference, or file any other
required document so that, as thereafter delivered to the purchasers of
the Registrable Notes being sold thereunder or to the purchasers of the
Exchange Notes to whom such Prospectus will be delivered by a
Participating Broker-Dealer, any such Prospectus will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
(l) Use their best efforts to cause the Registrable Notes covered by
a Registration Statement or the Exchange Notes, as the case may be, to be
rated with the appropriate rating agencies, if so requested by the
Holders of a majority in aggregate principal amount of Registrable Notes
covered by such Registration Statement or the Exchange Notes, as the case
may be, or the managing underwriter or underwriters, if any.
(m) Prior to the effective date of the first Registration Statement
relating to the Registrable Notes, (i) provide the Trustee with
certificates for the Registrable Notes or Exchange Notes, as the case may
be, in a form eligible for deposit with The Depository Trust Com-
<PAGE> 21
-19-
pany and (ii) provide a CUSIP number for the Registrable Notes or
Exchange Notes, as the case may be.
(n) In connection with an underwritten offering of Registrable Notes
pursuant to a Shelf Registration, enter into an underwriting agreement as
is customary in underwritten offerings of debt securities similar to the
Notes and take all such other actions as are reasonably requested by the
managing underwriter(s), if any, in order to expedite or facilitate the
registration or the disposition of such Registrable Notes, and in such
connection, (i) make such representations and warranties to the managing
underwriter or underwriters on behalf of any underwriters, with respect
to the business of the Company and its subsidiaries and the Registration
Statement, Prospectus and documents, if any, incorporated or deemed to be
incorporated by reference therein, in each case, as are customarily made
by issuers to underwriters in underwritten offerings of debt securities
similar to the Notes, and confirm the same if and when requested; (ii)
obtain opinions of counsel to the Company and the Guarantors and updates
thereof in form and substance reasonably satisfactory to the managing
underwriter or underwriters, addressed to the managing underwriter or
underwriters covering the matters customarily covered in opinions
requested in underwritten offerings of debt securities similar to the
Notes and such other matters as may be reasonably requested by the
managing underwriter(s); provided, that no such opinion of outside
counsel to the Company or any Guarantor which shall have rendered an
opinion in connection with the sale of the Notes to the Initial
Purchasers (the "Original Opinion") need cover any matter other than
matters covered in the Original Opinion and such other matters concerning
the Registration Statement and the application of the Securities Act to
the offer and sale of the Registration Notes as may be reasonably
requested by the managing underwriter or underwriters; (iii) obtain "cold
comfort" letters and updates thereof in form and substance reasonably
satisfactory to the managing underwriter or underwriters from the
independent certified public accountants of the Company and the
Guarantors (and, if necessary, any other independent certified public
accountants of any subsidiary of any of the Company or of any business
acquired by any of the Company or the Guarantors for which financial
statements and financial data are, or are required to be, included in the
Registration Statement), addressed to the managing underwriter or
underwriters on behalf of any underwriters, such letters
<PAGE> 22
-20-
to be in customary form and covering matters of the type customarily
covered in "cold comfort" letters in connection with underwritten
offerings of debt securities similar to the Notes and such other matters
as may be reasonably requested by the managing underwriter or
underwriters; and (iv) if an underwriting agreement is entered into, the
same shall contain indemnification provisions and procedures no less
favorable than those set forth in Section 7 hereof (or such other
provisions and procedures acceptable to Holders of a majority in
aggregate principal amount of Registrable Notes covered by such
Registration Statement and the managing underwriter or underwriters or
agents) with respect to all parties to be indemnified pursuant to said
Section. The above shall be done at each closing under such underwriting
agreement, or as and to the extent required thereunder.
(o) If (1) a Shelf Registration is filed pursuant to Section 3, or
(2) a Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Notes
during the Applicable Period, make available for inspection by any
selling Holder of such Registrable Notes being sold, or each such
Participating Broker-Dealer, as the case may be, the managing underwriter
or underwriters participating in any such disposition of Registrable
Notes, if any, and any attorney, accountant or other agent retained by
any such selling Holder or each such Participating Broker-Dealer, as the
case may be (collectively, the "Inspectors"), at the offices where
normally kept, during reasonable business hours, all financial and other
records, pertinent corporate documents and properties of the Company and
the Guarantors and their respective subsidiaries (collectively, the
"Records") as shall be reasonably necessary to enable them to exercise
any applicable due diligence responsibilities, and cause the officers,
directors and employees of the Company and the Guarantors and their
respective subsidiaries to supply all information in each case reasonably
requested by any such Inspector in connection with such Registration
Statement. Records which the Company and the Guarantors determine, in
good faith, to be confidential and any Records which they notify the
Inspectors are confidential shall not be disclosed by the Inspectors
unless (i) the disclosure of such Records is necessary to avoid or
correct a material misstatement or material omission in such Registration
Statement, (ii) the release of such Records is ordered pursuant
<PAGE> 23
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to a subpoena or other order from a court of competent jurisdiction or
(iii) the information in such Records has been made generally available
to the public. Each selling Holder of such Registrable Notes and each
such Participating Broker-Dealer or underwriter will be required to agree
that information obtained by it as a result of such inspections shall be
deemed confidential and shall not be used by it as the basis for any
market transactions in the securities of the Company or for any purpose
other than in connection with such Registration Statement unless and
until such is made generally available to the public. Each selling
Holder of such Registrable Notes and each such Participating
Broker-Dealer will be required to further agree that it will, upon
learning that disclosure of such Records is sought in a court of
competent jurisdiction, give prompt notice to the Company and allow the
Company to undertake appropriate action to prevent disclosure of the
Records deemed confidential at their expense.
(p) Provide an indenture trustee for the Registrable Notes or the
Exchange Notes, as the case may be, and cause the Indenture or the trust
indenture provided for in Section 2(a), as the case may be, to be
qualified under the TIA not later than the effective date of the Exchange
Registration Statement or the first Registration Statement relating to
the Registrable Notes; and in connection therewith, cooperate with the
trustee under any such indenture and the Holders of the Registrable
Notes, to effect such changes to such 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 such trustee to
execute, all documents as may be required to effect such changes, and all
other forms and documents required to be filed with the SEC to enable
such indenture to be so qualified in a timely manner.
(q) Comply with all applicable rules and regulations of the SEC and
make generally available to its securityholders earnings statements
satisfying the provisions of Section 11(a) of the Securities Act and Rule
158 thereunder (or any similar rule promulgated under the Securities Act)
no later than 45 days after the end of any 12-month period (or 90 days
after the end of any 12-month period if such period is a fiscal year) (i)
commencing at the end of any fiscal quarter in which Registrable Notes
are sold to underwriters in a firm commitment or best efforts
underwritten offering and (ii) if not sold to underwriters in such an
offering, commencing on the first day of the first
<PAGE> 24
-22-
fiscal quarter of the Company after the effective date of a Registration
Statement, which statements shall cover said 12-month periods.
(r) Upon consummation of an Exchange Offer or a Private Exchange,
obtain an opinion of counsel to the Company and the Guarantors, in a form
customary for underwritten offerings of debt securities similar to the
Notes, addressed to the Trustee for the benefit of all Holders of
Registrable Notes participating in the Exchange Offer or the Private
Exchange, as the case may be, and which includes an opinion that (i) each
of the Company and the Guarantors has duly authorized, executed and
delivered the Exchange Notes and Private Exchange Notes and the related
indenture and (ii) each of the Exchange Notes or the Private Exchange
Notes, as the case may be, and related indenture constitute a legal,
valid and binding obligation of each of the Company and the Guarantors,
enforceable against each of the Company and the Guarantors in accordance
with its respective terms (with customary exceptions).
(s) If an Exchange Offer or a Private Exchange is to be consummated,
upon delivery of the Registrable Notes by Holders to the Company and the
Guarantors (or to such other Person as directed by the Company and the
Guarantors) in exchange for the Exchange Notes or the Private Exchange
Notes, as the case may be, the Company and the Guarantors shall mark, or
cause to be marked, on such Registrable Notes that such Registrable Notes
are being canceled in exchange for the Exchange Notes or the Private
Exchange Notes, as the case may be; and, in no event shall such
Registrable Notes be marked as paid or otherwise satisfied.
(t) Cooperate with each seller of Registrable Notes covered by any
Registration Statement and the managing underwriter(s), if any,
participating in the disposition of such Registrable Notes and their
respective counsel in connection with any filings required to be made
with the National Association of Securities Dealers, Inc. (the "NASD").
(u) Use their respective best efforts to take all other reasonable
steps necessary to effect the registration of the Registrable Notes
covered by a Registration Statement contemplated hereby.
<PAGE> 25
-23-
The Company and the Guarantors may require each seller of
Registrable Notes or Participating Broker-Dealer as to which any registration is
being effected to furnish to the Company and the Guarantors such information
regarding such seller or Participating Broker-Dealer and the distribution of
such Registrable Notes or Exchange Notes to be sold by such Participating
Broker-Dealer, as the case may be, as the Company and the Guarantors may, from
time to time, reasonably request. The Company may exclude from such
registration the Registrable Notes of any seller or Participating Broker-Dealer
who fails to furnish such information within a reasonable time after receiving
such request. Each seller as to which any Shelf Registration is being effected
agrees to furnish promptly to the Company all information required to be
disclosed in order to make the information previously furnished to the Company
by such seller not materially misleading.
Each Holder of Registrable Notes and each Participating
Broker-Dealer agrees by acquisition of such Registrable Notes or Exchange Notes
to be sold by such Participating Broker-Dealer, as the case may be, that, upon
receipt of any notice from the Company of the happening of any event of the kind
described in Section 5(c)(ii), 5(c)(iv), 5(c)(v) or 5(c)(vi) hereof, such Holder
will forthwith discontinue disposition of such Registrable Notes covered by such
Registration Statement or Prospectus or Exchange Notes to be sold by such Holder
or Participating Broker-Dealer, as the case may be, until such Holder's or
Participating Broker-Dealer's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 5(k), or until it is advised in
writing (the "Advice") by the Company that the use of the applicable Prospectus
may be resumed, and has received copies of any amendments or supplements
thereto. In the event the Company shall give any such notice, each of the
Effectiveness Period and the Applicable Period shall be extended by the number
of days during such periods from and including the date of the giving of such
notice to and including the date when each seller of Registrable Notes covered
by such Registration Statement or Exchange Notes to be sold by such Holder or
Participating Broker-Dealer, as the case may be, shall have received (x) the
copies of the supplemented or amended Prospectus contemplated by Section 5(k) or
(y) the Advice.
6. Registration Expenses
(a) All fees and expenses incident to the performance of or
compliance with this Agreement by the Company and the Guarantors shall be borne
by the Company and the Guaran-
<PAGE> 26
-24-
tors, jointly and severally, whether or not the Exchange Offer or a Shelf
Registration is filed or becomes effective, including, without limitation, (i)
all registration and filing fees (including, without limitation, (A) fees with
respect to filings required to be made with the NASD in connection with an
underwritten offering and (B) fees and expenses of compliance with state
securities or Blue Sky laws (including, without limitation, reasonable fees and
disbursements of counsel in connection with Blue Sky qualifications of the
Registrable Notes or Exchange Notes and determination of the eligibility of the
Registrable Notes or Exchange Notes for investment under the laws of such
jurisdictions in the United States (x) where the Holders of Registrable Notes
are located, in the case of the Exchange Notes, or (y) as provided in Section
5(h), in the case of Registrable Notes or Exchange Notes to be sold by a
Participating Broker-Dealer during the Applicable Period)), (ii) printing
expenses (including, without limitation, expenses of printing certificates for
Registrable Notes or Exchange Notes in a form eligible for deposit with The
Depository Trust Company and of printing Prospectuses if the printing of
Prospectuses is reasonably requested by the managing underwriter or
underwriters, if any, or, in respect of Registrable Notes or Exchange Notes to
be sold by any Participating Broker-Dealer during the Applicable Period, if
reasonably requested by the Holders of a majority in aggregate principal amount
of the Registrable Notes included in any Registration Statement or of such
Exchange Notes, as the case may be), (iii) messenger, telephone and delivery
expenses, (iv) fees and disbursements of counsel for the Company and fees and
disbursements of special counsel for the sellers of Registrable Notes (subject
to the provisions of Section 6(b)), (v) fees and disbursements of all
independent certified public accountants referred to in Section 5(n)(iii)
(including, without limitation, the expenses of any special audit and "cold
comfort" letters required by or incident to such performance), (vi) rating
agency fees, (vii) Securities Act liability insurance, if the Company and/or
the Guarantors desire such insurance, (viii) fees and expenses of the Trustee,
(ix) fees and expenses of all other Persons retained by the Company and/or the
Guarantors, (x) internal expenses of the Company and the Guarantors (including,
without limitation, all salaries and expenses of officers and employees of the
Company and the Guarantors performing legal or accounting duties), (xi) the
expense of any annual audit, (xii) the fees and expenses incurred in connection
with any listing of the securities to be registered on any securities exchange
and (xiii) the expenses relating to printing, word processing and distributing
all Registration Statements, underwriting agree-
<PAGE> 27
-25-
ments, securities sales agreements, indentures and any other documents
necessary in order to comply with this Agreement.
(b) In connection with any Shelf Registration hereunder, the Company
and the Guarantors, jointly and severally, shall reimburse the Holders of the
Registrable Notes being registered in such registration for the reasonable fees
and disbursements of not more than one counsel (in addition to appropriate local
counsel) chosen by the Holders of a majority in aggregate principal amount of
the Registrable Notes to be included in such Registration Statement and other
reasonable and documented out-of-pocket expenses of the Holders of Registrable
Notes incurred in connection with the registration of the Registrable Notes.
The Company and the Guarantors shall not have any obligation to pay any
underwriting fees, discounts or commissions attributable to the sale of
Registrable Securities.
7. Indemnification
(a) Each of the Company and the Guarantors, jointly and severally,
agrees to indemnify and hold harmless each Holder of Registrable Notes and each
Participating Broker-Dealer selling Exchange Notes during the Applicable Period,
the officers and directors of each such Person, and each Person, if any, who
controls any such Person within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act (each, a "Participant"), from
and against any and all losses, claims, damages and liabilities (including,
without limitation, the reasonable and documented legal fees and other expenses
actually incurred in connection with any suit, action or proceeding or any claim
asserted) caused by, arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement or Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) or any preliminary Prospectus,
or caused by, arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with information
relating to any Participant furnished to the Company in writing by such
Participant expressly for use therein; provided that the foregoing indemnity
with respect to any preliminary Prospectus shall not inure to the benefit of any
Participant (or to the benefit of an officer or director of such Participant or
any
<PAGE> 28
-26-
Person controlling such Participant) from whom the Person asserting any such
losses, claims, damages or liabilities purchased Registrable Notes or Exchange
Notes if such untrue statement or omission or alleged untrue statement or
omission made in such preliminary Prospectus is eliminated or remedied in the
related Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) and a copy of the related
Prospectus (as so amended or supplemented) shall have been furnished to such
Participant at or prior to the sale of such Registrable or Exchange Notes, as
the case may be, to such Person.
(b) Each Participant will be required to agree, severally and not
jointly, to indemnify and hold harmless the Company and the Guarantors, their
respective directors and officers and each Person who controls any of the
Company or the Guarantors within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Company and the Guarantors to each Participant and shall have the
rights and duties given to the Company and the Guarantors in paragraph (c) of
this Section 7 (except that if the Company and the Guarantors shall have assumed
the defense thereof, such Participant shall not be required to do so, but may
employ separate counsel therein and participate in the defense thereof but the
fees and expenses of such counsel shall be at the expense of such Participant),
but only with reference to information relating to such Participant furnished to
the Company and the Guarantors in writing by such Participant expressly for use
in any Registration Statement or Prospectus, any amendment or supplement
thereto, or any preliminary Prospectus. The liability of any Participant under
this paragraph (b) shall in no event exceed the proceeds received by such
Participant from sales of Registrable Notes or Exchange Notes giving rise to
such obligations.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any Person in respect of which indemnity may be sought pursuant to either
paragraph (a) or (b) of this Section 7, such Person (the "Indemnified Person")
shall promptly notify the Person against whom such indemnity may be sought (the
"Indemnifying Person") in writing, and the Indemnifying Person, upon request of
the Indemnified Person, shall retain one counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may reasonably designate in such proceeding and shall pay
the reasonable fees and expenses incurred by such counsel related to such
proceeding. In any such
<PAGE> 29
-27-
proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person unless (i) the Indemnifying Person and the Indemnified
Person shall have mutually agreed in writing to the contrary, (ii) the
Indemnifying Person has failed to retain counsel reasonably satisfactory to the
Indemnified Person or (iii) the named parties in any such proceeding (including
any impleaded parties) include both the Indemnifying Person and the Indemnified
Person and such Indemnified Person shall have been advised by counsel that
there may be one or more legal defenses available to it which are different
from or additional to those available to any such Indemnifying Person. It is
understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate law firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred. Any such separate firm for the
Participants and such control Persons of Participants shall be designated in
writing by Participants who sold a majority in interest of Registrable Notes
and Exchange Notes sold by all such Participants and any such separate firm for
the Company and the Guarantors, their directors, their officers and such
control Persons of the Company and the Guarantors shall be designated in
writing by the Company. The Indemnifying Person shall not be liable for any
settlement of any proceeding effected without its prior written consent, but if
settled with such consent or if there is a final judgment for the plaintiff for
which the Indemnified Person is entitled to indemnification pursuant to this
Agreement, the Indemnifying Person agrees to indemnify any Indemnified Person
from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an
Indemnified Person shall have requested an Indemnifying Person to reimburse the
Indemnified Person for reasonable fees and expenses incurred by counsel as
contemplated by the third sentence of this paragraph, the Indemnifying Person
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 60
days after receipt by such Indemnifying Person of the aforesaid request and
(ii) such Indemnifying Person shall not have reimbursed the Indemnified Person
in accordance with such request prior to the date of such settlement; provided,
however, that the Indemnifying Person shall not be liable for any settlement
effected without its consent pursuant to this sentence if the Indemnifying
Party is contesting, in good faith, the request for reimbursement. No
Indemnifying Person shall, without the prior written consent of
<PAGE> 30
-28-
the Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnity could have been sought hereunder by such Indemnified
Person, unless such settlement includes an unconditional release (or any other
release reasonably acceptable to the Indemnified Person) of such Indemnified
Person from all liability on claims that are the subject matter of such
proceeding.
(d) If the indemnification provided for in paragraphs (a) and (b) of
this Section 7 is unavailable to an Indemnified Person in respect of any losses,
claims, damages or liabilities referred to therein (other than as a result of
the proviso set forth in Section 7(a)), then each Indemnifying Person under such
paragraphs, in lieu of indemnifying such Indemnified Person thereunder, shall
contribute to the amount paid or payable by such Indemnified Person as a result
of such losses, claims, damages or liabilities in such proportion as is
appropriate to reflect the relative fault of the Company and the Guarantors on
the one hand and the Participants on the other in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative fault of the
Company and the Guarantors on the one hand and the Participants on the other
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 and the
Guarantors or by the Participants and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
(e) The parties agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
(even if the Participants were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an Indemnified Person as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitations set forth above, any reasonable
legal or other expenses actually incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall a
Participant be required to contribute any amount in excess of the amount by
which proceeds received by such Participant from sales of Registrable Notes or
<PAGE> 31
-29-
Exchange Notes exceeds the amount of any damages that such Participant 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 Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
(f) The indemnity and contribution agreements contained in this
Section 7 will be in addition to any liability which the Indemnifying Persons
may otherwise have to the Indemnified Persons referred to above.
8. Rules 144 and 144A
Each of the Company and the Guarantors covenants that it will file
the reports required to be filed by it under the Securities Act and the Exchange
Act and the rules and regulations adopted by the SEC thereunder in a timely
manner and, if at any time the Company is not required to file such reports, it
will, upon the request of any Holder of Registrable Notes, make publicly
available other information of a like nature so long as necessary to permit
sales pursuant to Rule 144 or Rule 144A. Each of the Company and the Guarantors
further covenants that so long as any Registrable Notes remain outstanding to
make available to any Holder of Registrable Notes in connection with any sale
thereof, the information required by Rule 144A(d)(4) under the Securities Act in
order to permit resales of such Registrable Notes pursuant to (a) such Rule
144A, or (b) any similar rule or regulation hereafter adopted by the SEC.
9. Underwritten Registrations
If any of the Registrable Notes covered by any Shelf Registration
are to be sold in an underwritten offering, the investment banking firm or firms
that will underwrite the offering and the manager or managers that will manage
the offering will be selected by the Holders of a majority in aggregate
principal amount of such Registrable Notes included in such offering and shall
be reasonably acceptable to the Company and the Guarantors.
No Holder of Registrable Notes may participate in any underwritten
offering hereunder unless such Holder (a) agrees to sell such Holder's
Registrable Notes on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and (b)
completes
<PAGE> 32
-30-
and executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements.
10. Miscellaneous
(a) Remedies. In the event of a breach by the Company or any
Guarantor of any of its obligations under this Agreement, other than the
occurrence of an event which requires payment of Additional Interest, each
Holder of Registrable Notes, in addition to being entitled to exercise all
rights provided herein, in the Indenture or, in the case of the Initial
Purchasers, in the Purchase Agreement or granted by law, including recovery of
damages, will be entitled to specific performance of its rights under this
Agreement. Each of the Company and the Guarantors, jointly and severally, agree
that monetary damages would not be adequate compensation for any loss incurred
by reason of a breach by it of any of the provisions of this Agreement and
hereby further agrees, jointly and severally, that, in the event of any action
for specific performance in respect of such breach, it shall waive the defense
that a remedy at law would be adequate.
(b) Enforcement. The Trustee shall be authorized to enforce the
provisions of this Agreement for the ratable benefit of the Holders.
(c) No Inconsistent Agreements. None of the Company or the
Guarantors has entered, as of the date hereof, and the Company and the
Guarantors shall not enter, after the date of this Agreement, into any agreement
with respect to any of their securities that is inconsistent with the rights
granted to the Holders of Registrable Notes in this Agreement or otherwise
conflicts with the provisions hereof. None of the Company or the Guarantors has
entered or will enter into any agreement with respect to any of its securities
which will grant to any Person piggy-back rights with respect to a Registration
Statement required to be filed under this Agreement.
(d) Adjustments Affecting Registrable Notes. Neither the Company
nor the Guarantors shall, directly or indirectly, take any action with respect
to the Registrable Notes as a class that would adversely affect the ability of
the Holders of Registrable Notes to include such Registrable Notes in a
registration undertaken pursuant to this Agreement.
(e) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not
<PAGE> 33
-31-
be amended, modified or supplemented, and waivers or consents to departures
from the provisions hereof may not be given, unless the Company and the
Guarantors have obtained the written consent of Holders of at least a majority
of the then outstanding aggregate principal amount of Registrable Notes.
Notwithstanding the foregoing, a waiver or consent to depart from the
provisions hereof with respect to a matter that relates exclusively to the
rights of Holders of Registrable Notes whose securities are being sold pursuant
to a Registration Statement and that does not directly or indirectly affect,
impair, limit or compromise the rights of other Holders of Registrable Notes
may be given by Holders of at least a majority in aggregate principal amount of
the Registrable Notes being sold by such Holders pursuant to such Registration
Statement, provided that the provisions of this sentence may not be amended,
modified or supplemented except in accordance with the provisions of the
immediately preceding sentence.
(f) Notices. All notices and other communications (including
without limitation any notices or other communications to the Trustee) provided
for or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, next-day courier or telecopier:
(i) if to a Holder of Registrable Notes or any Participating
Broker-Dealer, at the most current address given by the Trustee to the
Company; and
(ii) if to the Company or the Guarantors, to Hayes Wheels
International, Inc., 38341 Huron River Drive, Romulus, Michigan 48174,
Attention: General Counsel and with a copy to Skadden, Arps, Slate,
Meagher & Flom LLP, One Rodney Square, Wilmington, Delaware 19801,
Attention: Robert B. Pincus, Esq.
All such notices and communications shall be deemed to have been
duly given: (i) when delivered by hand, if personally delivered; (ii) five
business days after being deposited in the mail, postage prepaid, if mailed;
(iii) one business day after being timely delivered to a next-day courier; and
(iv) when receipt is acknowledged by the addressee, if telecopied.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee under the
Indenture at the address specified in such Indenture.
<PAGE> 34
-32-
(g) 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 of Registrable Notes.
(h) 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.
(i) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(J) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(k) Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction.
(l) Entire Agreement. This Agreement, together with the Purchase
Agreement and the Indenture, is intended by the parties as a final expression of
their agreement, and is 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 and therein.
(m) Joint and Several Obligations. Unless otherwise stated herein,
each of the obligations of the Company and the Guarantors under this Agreement
shall be joint and several obligations of each of them.
<PAGE> 35
-33-
(n) Notes Held by the Company or their Affiliates. Whenever the
consent or approval of Holders of a specified percentage of Registrable Notes is
required hereunder, Registrable Notes held by the Company or their affiliates
(as such term is defined in Rule 405 under the Securities Act) shall not be
counted in determining whether such consent or approval was given by the Holders
of such required percentage.
<PAGE> 36
-34-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
HAYES WHEELS INTERNATIONAL, INC.,
a Delaware corporation
By:____________________________________
Name:
Title:
Guarantors:
HAYES WHEELS INTERNATIONAL-CALIFORNIA, INC., a
Delaware corporation
By:____________________________________
Name:
Title:
HAYES WHEELS INTERNATIONAL-GEORGIA, INC.,
a Delaware corporation
By:____________________________________
Name:
Title:
HAYES WHEELS INTERNATIONAL-INDIANA, INC.,
a Delaware corporation
By:____________________________________
Name:
Title:
<PAGE> 37
-35-
HAYES WHEELS INTERNATIONAL-MEXICO, INC.,
a Delaware corporation
By:____________________________________
Name:
Title:
HAYES WHEELS INTERNATIONAL-MICHIGAN, INC.,
a Delaware corporation
By:____________________________________
Name:
Title:
MOTOR WHEEL CORPORATION, an Ohio corporation
By:____________________________________
Name:
Title
MWC ACQUISITION SUB, INC.,
a Delaware corporation
By:____________________________________
Name:
Title:
<PAGE> 38
-36-
The foregoing Agreement is hereby confirmed
and accepted as of the date first above
written.
CIBC WOOD GUNDY SECURITIES CORP.
By:_________________________________
Name:
Title:
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
By:_________________________________
Name:
Title:
<PAGE> 1
EXHIBIT 12.1
HAYES WHEELS INTERNATIONAL, INC.
RATIO OF EARNINGS TO FIXED CHARGES
(unaudited)
(Millions of dollars except ratios)
<TABLE>
<CAPTION>
Pro Forma
Year Year Year Year Year Year Quarter Quarter
Ended Ended Ended Ended Ended Ended Ended Ended
Jan. 31, Jan. 31, Jan. 31, Jan. 31, Jan. 31, Jan. 31, Apr. 30, Apr. 30,
1993 1994 1995 1996 1997 1997 1996 1997
-------- -------- -------- -------- -------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Earnings (loss) before
taxes on income and
minority interest.... $ 7.8 $42.2 $49.9 $46.2 ($102.0) ($122.6) $9.9 $8.8
Interest expense:
Bank borrowings and
long-term debt....... 33.8 13.6 13.4 15.0 48.5 73.6 3.6 18.4
Rentals (1)............ 0.5 1.0 2.0 2.6 4.6 6.8 0.8 1.3
------ ----- ----- ----- ------ ------ ----- -----
34.3 14.6 15.4 17.6 53.1 80.4 4.4 19.7
Earnings before interest
expense, taxes on
income and minority
interest............... $42.1 $56.8 $65.3 $63.8 ($48.9) ($42.2) $14.3 $28.5
===== ===== ===== ===== ====== ====== ===== =====
Fixed charges:
Bank borrowings and
long-term debt....... $33.8 $13.6 $13.4 $15.0 $48.5 $73.6 $3.6 $18.4
Rentals (1)............ 0.5 1.0 2.0 2.6 4.6 6.8 0.8 1.3
----- ----- ----- ----- ------ ------ ----- -----
Total fixed charges.. $34.3 $14.6 $15.4 $17.6 $53.1 $80.4 $4.4 $19.7
===== ===== ===== ===== ====== ====== ===== =====
Ratio of earnings to
fixed charges.......... 1.23 3.89 4.24 3.63 (0.92) (0.52) 3.25 1.35
===== ===== ===== ===== ====== ====== ===== =====
Coverage deficiency on
fixed charges.......... N/A N/A N/A N/A 102.0 122.6 N/A N/A
====== ===== ===== ===== ====== ====== ===== =====
</TABLE>
- --------------------------------
(1) Estimated interest component of rent expense.
<PAGE> 1
[KPMG PEAT MARWICK LETTERHEAD]
EXHIBIT 23.1
CONSENT OF KPMG PEAT MARWICK LLP
The Boards of Directors
Hayes Wheels International, Inc.:
We consent to the use of our report dated February 25, 1997, related to
the consolidated balance sheets of Hayes Wheels International, Inc. and
subsidiaries as of January 31, 1997 and 1996, and the related consolidated
statements of operations, changes in stockholders' equity (deficit), and cash
flows for each of the years in the three-year period ended January 31, 1997,
incorporated by reference herein, and to the references to our firm under the
headings "Summary Historical Financial Information", and "Experts" in the
Registration Statement (Form S-4) dated August 25, 1997.
KPMG PEAT MARWICK LLP
Detroit, Michigan
August 25, 1997
<PAGE> 1
EXHIBIT 23.2
[KPMG DEUTSCHE TREUHAND-GESELLSCHAFT LETTERHEAD]
THE BOARD OF DIRECTORS
HAYES WHEELS INTERNATIONAL, INC.:
We consent to the use of our report dated May 21, 1997, related to the
consolidated balance sheets of Lemmerz Holding GmbH and subsidiaries as of
December 31, 1996 and 1995, and the related consolidated statements of
earnings, shareholders' equity, and cash flows for each of the years then
ended, incorporated by reference herein, and to the references to our firm
under the headings "Summary Historical Financial Information", and "Experts"
in the Registration Statement (Form S-4) dated August 25, 1997.
KPMG Deutsche Treuhand - Gesellschaft Aktiengesellschaft
Wirtschaftsprufungsgesellschaft.
Cologne, Germany
August 25, 1997
<PAGE> 1
[ERNST & YOUNG LLP LETTERHEAD]
EXHIBIT 23.3
CONSENT OF ERNST & YOUNG LLP
We consent to the reference to our firm under the caption "Experts" and
to the use of our report dated February 23, 1996, except for Note O, as to
which the date is March 28, 1996, with respect to the consolidated financial
statements of MWC Holdings, Inc. incorporated by reference in the
Registration Statement (Form S-4 dated August 25, 1997) and the related
Prospectus of Hayes Wheels International, Inc. and subsidiaries for the
registration of $400,000,000 Senior Subordinated Notes.
ERNST & YOUNG LLP
Detroit, Michigan
August 25, 1997
<PAGE> 1
EXHIBIT 25.1
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO RULE
901(d) of REGULATION S-T
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) [ ]
____________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
<TABLE>
<S><C>
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
</TABLE>
____________________
HAYES WHEELS INTERNATIONAL, INC.
(Exact name of obligor as specified in its charter)
<TABLE>
<S><C>
Delaware 13-3384636
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
38481 Huron River Drive
Romulus, Michigan 48174
(Address of principal executive offices) (Zip code)
</TABLE>
______________________
9 1/8% Series B Senior Subordinated Notes Due 2007
(Title of the indenture securities)
================================================================================
<PAGE> 2
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.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE
7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R.
229.10(D).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to
Form T-1 filed with Registration Statement No. 33-6215, Exhibits
1a and 1b to Form T-1 filed with Registration Statement No.
33-21672 and Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
T-1 filed with Registration Statement No. 33-31019.)
-2-
<PAGE> 3
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
- 3 -
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 21st day of August, 1997.
THE BANK OF NEW YORK
By: /s/THOMAS E. TABOR
--------------------------
Name: THOMAS E. TABOR
Title: ASSISTANT TREASURER
-4-
<PAGE> 5
EXHIBIT 7
________________________________________________________________________________
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 1997,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................. $ 8,249,820
Interest-bearing balances .......... 1,031,026
Securities:
Held-to-maturity securities ........ 1,118,463
Available-for-sale securities ...... 3,005,838
Federal funds sold and Securities pur-
chased under agreements to resell...... 3,100,281
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................32,895,077
LESS: Allowance for loan and
lease losses ..............633,877
LESS: Allocated transfer risk
reserve........................429
Loans and leases, net of unearned
income, allowance, and reserve 32,260,771
Assets held in trading accounts ...... 1,715,214
Premises and fixed assets (including
capitalized leases) ................ 684,704
Other real estate owned .............. 21,738
Investments in unconsolidated
subsidiaries and associated
companies .......................... 195,761
Customers' liability to this bank on
acceptances outstanding ............ 1,152,899
Intangible assets .................... 683,503
Other assets ......................... 1,526,113
------------
Total assets ......................... $ 54,746,131
============
LIABILITIES
Deposits:
In domestic offices ................ $ 25,614,961
Noninterest-bearing ......10,564,652
Interest-bearing .........15,050,309
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 15,103,615
Noninterest-bearing .........560,944
Interest-bearing .........14,542,671
Federal funds purchased and Securities
sold under agreements to repurchase. 2,093,286
Demand notes issued to the U.S.
Treasury ........................... 239,354
Trading liabilities .................. 1,399,064
Other borrowed money:
With remaining maturity of one year
or less .......................... 2,075,092
With remaining maturity of more than
one year ......................... 20,679
Bank's liability on acceptances exe-
cuted and outstanding .............. 1,160,012
Subordinated notes and debentures .... 1,014,400
Other liabilities .................... 1,840,245
------------
Total liabilities .................... 50,560,708
------------
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 731,319
Undivided profits and capital
reserves .......................... 2,544,303
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ (19,449)
Cumulative foreign currency transla-
tion adjustments .................. (13,034)
------------
Total equity capital ................ 4,185,423
------------
Total liabilities and equity
capital ........................... $ 54,746,131
=============
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Alan R. Griffith
J. Carter Bacot
Thomas A. Renyi Directors
__________________________________________________________________
<PAGE> 1
EXHIBIT 25.2
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO
RULE 901(d) OF REGULATION S-T.
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) [ ]
____________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
<TABLE>
<S><C>
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
</TABLE>
____________________
HAYES WHEELS INTERNATIONAL, INC.
(Exact name of obligor as specified in its charter)
<TABLE>
<S><C>
Delaware 13-3384636
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
38481 Huron River Drive
Romulus, Michigan 48174
(Address of principal executive offices) (Zip code)
</TABLE>
______________________
9 1/8% Series B Senior Subordinated Notes Due 2007
(Title of the indenture securities)
================================================================================
<PAGE> 2
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.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE
7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R.
229.10(D).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to
Form T-1 filed with Registration Statement No. 33-6215, Exhibits
1a and 1b to Form T-1 filed with Registration Statement No.
33-21672 and Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
T-1 filed with Registration Statement No. 33-31019.)
-2-
<PAGE> 3
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
- 3 -
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 21st day of August, 1997.
THE BANK OF NEW YORK
By: /s/THOMAS E. TABOR
--------------------------
Name: THOMAS E. TABOR
Title: ASSISTANT TREASURER
-4-
<PAGE> 5
EXHIBIT 7
________________________________________________________________________________
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 1997,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................. $ 8,249,820
Interest-bearing balances .......... 1,031,026
Securities:
Held-to-maturity securities ........ 1,118,463
Available-for-sale securities ...... 3,005,838
Federal funds sold and Securities pur-
chased under agreements to resell...... 3,100,281
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................32,895,077
LESS: Allowance for loan and
lease losses ..............633,877
LESS: Allocated transfer risk
reserve........................429
Loans and leases, net of unearned
income, allowance, and reserve 32,260,771
Assets held in trading accounts ...... 1,715,214
Premises and fixed assets (including
capitalized leases) ................ 684,704
Other real estate owned .............. 21,738
Investments in unconsolidated
subsidiaries and associated
companies .......................... 195,761
Customers' liability to this bank on
acceptances outstanding ............ 1,152,899
Intangible assets .................... 683,503
Other assets ......................... 1,526,113
------------
Total assets ......................... $ 54,746,131
============
LIABILITIES
Deposits:
In domestic offices ................ $ 25,614,961
Noninterest-bearing ......10,564,652
Interest-bearing .........15,050,309
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 15,103,615
Noninterest-bearing .........560,944
Interest-bearing .........14,542,671
Federal funds purchased and Securities
sold under agreements to repurchase. 2,093,286
Demand notes issued to the U.S.
Treasury ........................... 239,354
Trading liabilities .................. 1,399,064
Other borrowed money:
With remaining maturity of one year
or less .......................... 2,075,092
With remaining maturity of more than
one year ......................... 20,679
Bank's liability on acceptances exe-
cuted and outstanding .............. 1,160,012
Subordinated notes and debentures .... 1,014,400
Other liabilities .................... 1,840,245
------------
Total liabilities .................... 50,560,708
------------
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 731,319
Undivided profits and capital
reserves .......................... 2,544,303
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ (19,449)
Cumulative foreign currency transla-
tion adjustments .................. (13,034)
------------
Total equity capital ................ 4,185,423
------------
Total liabilities and equity
capital ........................... $ 54,746,131
=============
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Alan R. Griffith
J. Carter Bacot
Thomas A. Renyi Directors
__________________________________________________________________
