SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
July 2, 1996
(Date of earliest event reported)
Hayes Wheels International, Inc.
(Exact name of Registrant as specified in its charter)
Delaware 1-11592 13-3384636
(State of (Commission File No.) (IRS Employer
Incorporation) Identification No.)
38481 Huron River Drive
Romulus, Michigan 48174
(Address of principal executive offices, including zip code)
(313) 941-2000
(Registrant's telephone number, including area code)
_________________________________________________________
(Former name or former address, if changed since last report)
ITEMS 1 AND 2.
On July 2, 1996, Hayes Wheels International,
Inc., a Delaware corporation (the "Company"), consummated
the transactions contemplated by the Agreement and Plan
of Merger, dated as of March 28, 1996, between MWC
Holdings, Inc., a Delaware corporation ("Holdings"), and
the Company, pursuant to which, among other things,
Holdings was merged with and into the Company, with the
Company as the surviving corporation (the "Merger"). As
a result of the Merger, Motor Wheel Corporation, an Ohio
corporation and a wholly owned subsidiary of Holdings
("Motor Wheel"), became a wholly owned subsidiary of the
Company.
Upon consummation of the Merger, (a) each
outstanding share of common stock, par value $.01 per
share, of the Company ("Company Common Stock"), other
than shares held by the Company or its subsidiaries, was
converted into (i) $28.80 in cash and (ii) one-tenth of
one share of new common stock, par value $.01 per share,
of the Company ("New Common Stock"), (b) each outstanding
share of Series A Preferred Stock, par value $.01 per
share, of the Company ("Company Preferred Stock") was
converted into 31.25 shares of New Common Stock, and
(c) each outstanding share of common stock, par value
$.01 per share, of Holdings ("Holdings Common Stock"),
other than shares held by Holdings or its subsidiaries,
was converted into (i) 8,231.76 shares of New Common
Stock and (ii) 3,029.29 warrants, each warrant entitling
the holder thereof to purchase one share of New Common
Stock at a price of $48.00 during the period commencing
on the fourth anniversary of the effective time of the
Merger and ending on the seventh anniversary thereof
("Warrants"). Cash was paid in lieu of fractional shares
of New Common Stock.
As a result of the Merger, an aggregate of
approximately 11,195,259 shares of New Common Stock were
issued, of which approximately (i) 1,757,400 shares
(approximately 15.8%) were issued to existing holders of
Company Common Stock, (ii) 6,250,000 shares
(approximately 56.1%) were issued to certain new
investors (the "New Investors"), of which approximately
79,513 shares were exchanged after the Merger for an
equal number of shares of Non-voting Common Stock, par
value $.01 per share, of the Company ("Non-voting Common
Stock"), (iii) 3,125,000 shares (approximately 28.1%)
were issued to existing holders of Holdings Common Stock
and (iv) approximately 62,859 shares were issued to
certain executive officers of the Company upon
cancellation of certain outstanding stock options.
Immediately prior to the Merger and as part of
the financing thereof, the Company issued and sold to the
New Investors, including Joseph Littlejohn & Levy Fund II
L.P. ("JLL") (which owned approximately 74% of Holdings
Common Stock immediately prior to the Merger), CIBC WG
Argosy Merchant Fund 2, L.L.C. ("Argosy") and TSG Capital
Fund II, L.P. ("TSG"), (i) an aggregate of 200,000 shares
of Company Preferred Stock, which upon consummation of
the Merger were converted into an aggregate of 6,250,000
shares of New Common Stock, and (ii) 150,000 Warrants, in
exchange for aggregate cash consideration of $200
million. JLL is a limited partnership, the managing
general partner of which is Joseph, Littlejohn & Levy.
Joseph, Littlejohn & Levy is a private investment
partnership whose business includes making strategic
investments in consolidating industries and investing in
corporate divestitures, recapitalizations, and
restructurings. TSG is a Delaware limited partnership
which provides equity capital to companies in a variety
of industries. The general partner of TSG is TSG
Associates II, L.P., a Delaware limited partnership,
whose general partner is TSG Associates II, Inc. Argosy
is a private equity investment fund managed by CIBC Wood
Gundy Securities Corp., an affiliate of CIBC. Argosy
makes equity and other investments in a wide range of
industries.
In connection with the Merger and as part of
the financing thereof, the Company entered into a Credit
Agreement, dated as of June 27, 1996 (the "Credit
Agreement"), with Canadian Imperial Bank of Commerce
("CIBC") and Merrill Lynch Capital Corporation
("Merrill", and, together with CIBC, the "Managing
Agents"), pursuant to which, among other things, the
Managing Agents committed to lend to the Company at the
time of the Merger up to $425 million in the form of a
senior secured term loan facility, such aggregate amount
to be allocated among (i) a Tranche A Term Loan Facility
in an aggregate principal amount of up to $200 million
(the "Tranche A Facility"), (ii) a Tranche B Term Loan
Facility in an aggregate principal amount of up to $125
million (the "Tranche B Facility") and (iii) a Tranche C
Term Loan Facility in an aggregate principal amount of up
to $100 million (the "Tranche C Facility") (collectively,
the "Facilities"), and up to $220 million in the form of
a senior secured revolving credit facility (the
"Revolving Facility," and, together with the Facilities,
the "Loans"). Pursuant to the Credit Agreement, CIBC
agreed to provide $387 million of the aggregate principal
amount of the Loans and Merrill agreed to provide $258
million of such aggregate principal amount, each
commitment to be divided pro rata among the Loans. Each
of the Managing Agents reserved the right to syndicate
all or a portion of its commitment to one or more
financial institutions (the "Lenders"), such institutions
being subject to the Company's approval. In addition,
CIBC agreed to serve as administrative and syndication
agent (the "Agent") in connection with the Loans, as well
as fronting bank in connection with the letters of credit
issued under the Revolving Facility. Merrill agreed to
serve as documentation agent in connection with the
Loans. The Facilities are guaranteed by the Company and
all of its existing and future domestic subsidiaries.
The Facilities are secured by a first priority lien in
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 existing and future domestic
subsidiaries and 65% of the shares of the Company's
existing and future foreign subsidiaries.
In connection with the Merger and as part of
the financing thereof, the Company issued and sold $250
million in aggregate principal amount of its 11% Senior
Subordinated Notes due 2006 (the "Senior Subordinated
Notes") in a public offering with CIBC Wood Gundy
Securities Corp. ("CIBC Wood Gundy"), Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch") and
Salomon Brothers Inc acting as underwriters. CIBC Wood
Gundy is an affiliate of CIBC, which is the Agent and a
lender under the Credit Agreement. Merrill Lynch is an
affiliate of Merrill which is acting as a Managing Agent
and a lender under the Credit Agreement. The Senior
Subordinated Notes are general unsecured obligations of
the Company, subordinated in right of payment to all
existing and future senior indebtedness of the Company,
including the obligations of the Company under the Credit
Agreement, and are guaranteed by certain of the Company's
domestic subsidiaries.
In connection with the Merger, all of Motor
Wheel's $125 million principal amount of 11-1/2% Senior
Notes, due 2000, will be redeemed on August 1, 1996,
pursuant to their terms, and the Company repurchased
$98,477,000 in aggregate principal amount of its $100
million principal amount of 9-1/4% Senior Notes, due
2002, and amended, with the required consent of the
holders thereof, the related indenture to eliminate
substantially all of the restrictive covenants relating
to such notes that remain outstanding and eliminate the
Company's obligation, as a result of the Merger, to make
an offer to purchase such notes that remain outstanding.
Immediately after the Merger, the Company and
the New Investors entered into a stockholders' agreement
(the "Stockholders' Agreement") pursuant to which, among
other things, (i) JLL, TSG and certain other stockholders
agreed to vote their shares of New Common Stock so that
the Company's Board of Directors will consist of nine
members, of which four members will be designated by JLL,
one member will be designated by TSG, one member will be
the Chief Executive Officer of the Company and the
remaining three members, who may not be affiliated with
the Company or any of the New Investors, will be selected
by the Company's Board of Directors. The Stockholders'
Agreement further provides that the respective rights of
JLL and TSG to designate directors will terminate if any
such entity ceases to own at least 50% of its initial
investment. Each stockholder that is a party to the
Stockholders' Agreement has also agreed not to acquire
any shares of New Common Stock if, as a result of such
acquisition, such stockholder would own in excess of 50%
of the outstanding shares of New Common Stock.
Pursuant to the Stockholders' Agreement, such
stockholders have agreed not to transfer any shares of
New Common Stock, other than pursuant to certain
permitted transfers, until the second anniversary of the
Merger. The Stockholders' Agreement gives each
stockholder a party thereto holding shares of New Common
Stock received in the Merger with an aggregate value of
$15 million the right (exercisable after the second
anniversary of the Merger) to require the Company to
register under the Securities Act of 1933, as amended
(the "Securities Act"), the resale of all or part of such
shares at the Company's expense on two occasions. The
Company has agreed to file the reports under the
Securities Exchange Act of 1934, as amended, necessary to
enable each such stockholder to sell its shares of New
Common Stock. Each such stockholder will be entitled to
an unlimited number of piggyback registrations, which
will allow such stockholder to include shares of New
Common Stock (including shares of New Common Stock to be
issued upon the exercise of Warrants) held by it in
certain registrations of shares of New Common Stock
effected by the Company (subject to customary cut-back
provisions). The Stockholders' Agreement also permits
such stockholders to participate proportionately in
certain sales by JLL of shares of New Common Stock.
The Stockholders' Agreement also provides that
the Company will not repurchase any shares of New Common
Stock, other than to fund employee benefit plans, without
the approval of at least 82.5% of the shares of New
Common Stock subject to the Stockholders' Agreement. In
addition, the Stockholders' Agreement provides that the
Company will file all necessary reports with the
Securities and Exchange Commission, if applicable, and
take whatever action any stockholder a party thereto may
reasonably request to enable such stockholder to sell
shares of New Common Stock without registration under the
Securities Act within the limitations provided by Rule
144 thereunder. The Stockholders' Agreement may be
amended only with the prior written consent of the
Company and at least 82.5% of the shares of New Common
Stock initially subject thereto. The Stockholders'
Agreement will terminate on the eighth anniversary
thereof, unless terminated earlier pursuant to its terms.
By virtue of the consummation of the Merger,
the Board of Directors is comprised of: Timothy J.
Clark, Peter A. Joseph, Paul S. Levy and Marcos A.
Rodriguez, designated by JLL; Cleveland A. Christophe,
designated by TSG; Ranko "Ron" Cucuz, Chairman of the
Board, President and Chief Executive Officer of the
Company; and John S. Rodewig and Kenneth L. Way,
designated by the Company's Board of Directors. One
vacancy, which will be filled with an individual who is
not an affiliate of the Company or any of the New
Investors, remains on the Company's Board of Directors.
Argosy and the Company entered into an
Agreement, dated as of July 2, 1996 (the "Argosy
Agreement"), pursuant to which, among other things,
Argosy instructed the Company, as its nondiscretionary
proxy agent, to vote on its behalf all shares of New
Common Stock held by Argosy regarding all matters that
require stockholder approval in proportion to votes
actually cast by holders of New Common Stock, other than
JLL, subject to the terms and conditions set forth in the
Argosy Agreement.
The following table sets forth the ownership of
New Common Stock by each entity known by the Company to
own more than 5% of the outstanding shares of New Common
Stock immediately upon consummation of the Merger.
Percent of Ownership
Shares of New of Shares of New
Common Stock (a) Common Stock (b)
Joseph Littlejohn & Levy
Fund II L.P. . . . . . . . 4,817,086 43.3%
TSG Capital Fund II, L.P. . . 1,406,250 12.6
CIBC WG Argosy Merchant
Fund 2, L.L.C. (c) . . . . 1,250,000 11.2
Varity Corporation (d) . . . 814,400 7.3
Chase Equity Associates, L.P. (e) 625,000 5.6
__________
(a) In addition, 943,000 shares of New Common Stock are owned by
pre-Merger stockholders of the Company other than Varity,
constituting an ownership of approximately 8.5% of the
shares of New Common Stock (excluding Warrants and options).
(b) Excludes options to purchase shares of New Common Stock held
by certain officers and directors of the Company and
Holdings and Warrants to purchase 1,300,000 shares of New
Common Stock.
(c) The Company is the nondiscretionary proxy agent with respect
to such shares, pursuant to the Argosy Agreement.
(d) Varity owns its shares through K-H Corporation, its indirect
wholly owned subsidiary.
(e) Includes 79,513 shares of Non-voting Common Stock.
On July 2, 1996, the Company issued a press
release regarding the Merger and related transactions, a
copy of which is attached hereto as an exhibit and
incorporated herein by reference.
ITEM 7.
(a) Financial Statements of MWC Holdings, Inc.
[Incorporated by reference to the Consolidated Financial
Statements of MWC Holdings, Inc. included in Post-
Effective Amendment No. 1 to the Registration Statement
on Form S-3 of the Company, dated July 1, 1996
(Registration No. 333-03813)]
(b) Pro Forma Financial Information
[Incorporated by reference to the Unaudited Pro Forma
Combined Condensed Financial Statements included in Post-
Effective Amendment No. 1 to the Registration Statement
on Form S-3 of the Company, dated July 1, 1996
(Registration No. 333-03813)]
(c) (1) Underwriting Agreement dated June 26,
1996 among Hayes Wheels International, Inc. and certain
of its Subsidiaries, and CIBC Wood Gundy Securities
Corp., Merrill Lynch, Pierce, Fenner & Smith Incorporated
and Salomon Brothers Inc, as underwriters
(2.1) Agreement and Plan of Merger, dated
as of March 28, 1996, between Hayes Wheels International,
Inc. and MWC Holdings, Inc. [Incorporated by reference to
Exhibit 2.1 to the Registration Statement on Form S-4 of
the Company (Registration No. 333-04909)]
(2.2) Stockholders Agreement, dated as of
July 2, 1996, among Hayes Wheels International, Inc.,
Joseph Littlejohn & Levy Fund II L.P., Chase Equity
Associates, CIBC WG Argosy Merchant Fund 2, L.L.C.,
Nomura Holding America, Inc. and TSG Capital Fund II, L.P.
(3.1) Restated Certificate of Incorporation
of Hayes Wheels International, Inc., and Certificate of
Correction thereof
(3.2) Amended and Restated By-laws of Hayes
Wheels International, Inc.
(3.3) Certificate of Merger of MWC
Holdings, Inc. into Hayes Wheels International, Inc.,
filed with the Secretary of State of the State of
Delaware on July 2, 1996
(4.1) Indenture, dated as of July 2, 1996,
among Hayes Wheels International, Inc., certain of its
Subsidiaries and Comerica Bank, as Trustee, relating to
11% Senior Subordinated Notes due 2006, including the
form of Note therein
(4.2) Indenture, dated as of November 15,
1992, between Hayes Wheels International, Inc. and
Manufacturers and Traders Trust Company, as Trustee,
relating to 9-1/4% Senior Notes due 2002, including all
exhibits thereto [Incorporated by reference to Exhibit
4.2 of the Report on Form 10-K of the Company for the
year ended January 31, 1993 (File No. 1-11592)]
(4.3) First Supplemental Indenture, dated
as of June 20, 1996, between Hayes Wheels International,
Inc. and Manufacturers and Traders Trust Company, as
Trustee, to the Indenture, dated as of November 15, 1992,
relating to 9-1/4% Senior Notes due 2002
(4.4) Second Supplemental Indenture, dated
as of June 26, 1996, between Hayes Wheels International,
Inc. and Manufacturers and Traders Trust Company, as
Trustee, to the Indenture, dated as of November 15, 1992,
relating to 9-1/4% Senior Notes due 2002
(10.1) Credit Agreement, dated June 27,
1996, among Hayes Wheels International, Inc., Canadian
Imperial Bank of Commerce and Merrill Lynch Capital
Corporation
(10.2) Form of Indemnification Agreement
between Hayes Wheels International, Inc. and each of its
directors [Filed as Exhibit B to the Stockholders
Agreement filed herewith as Exhibit 2.2 hereto]
(99) Press Release, dated July 2, 1996, of
Hayes Wheels International, Inc.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned
hereunto duly authorized.
HAYES WHEELS INTERNATIONAL, INC.
Date: July 11, 1996 By: /s/ Daniel M. Sandberg
Daniel M. Sandberg
Vice President, General
Counsel and Secretary
EXHIBIT INDEX
PAGE
(a) Financial Statements of MWC
Holdings, Inc. [Incorporated by
reference to the Consolidated
Financial Statements of MWC
Holdings, Inc. included in Post-
Effective Amendment No. 1 to the
Registration Statement on Form S-3
of the Company, dated July 1, 1996
(Registration No. 333-03813)] . . . . . .
(b) Pro Forma Financial Information
[Incorporated by reference to the
Unaudited Pro Forma Combined Condensed
Financial Statements included in Post-
Effective Amendment No. 1 to the
Registration Statement on Form S-3 of
the Company, dated July 1, 1996
(Registration No. 333-03813)] . . . . . .
(c) (1) Underwriting Agreement dated June
26, 1996 among Hayes Wheels
International, Inc. and certain of
its Subsidiaries, and CIBC Wood
Gundy Securities Corp., Merrill
Lynch, Pierce, Fenner & Smith
Incorporated and Salomon Brothers
Inc, as underwriters . . . . . . . . . . .
(2.1) Agreement and Plan of Merger, dated
as of March 28, 1996, between Hayes
Wheels International, Inc. and MWC
Holdings, Inc. [Incorporated by
reference to Exhibit 2.1 to the
Registration Statement on Form S-4
of the Company (Registration No.
333-04909)] . . . . . . . . . . . . . . .
(2.2) Stockholders Agreement, dated as of
July 2, 1996, among Hayes Wheels
International, Inc., Joseph
Littlejohn & Levy Fund II L.P.,
Chase Equity Associates, CIBC WG
Argosy Merchant Fund 2, L.L.C.,
Nomura Holding America, Inc. and
TSG Capital Fund II, L.P. . . . . . . . .
(3.1) Restated Certificate of
Incorporation of Hayes Wheels
International, Inc., and
Certificate of Correction thereof . . . .
(3.2) Amended and Restated By-laws of
Hayes Wheels International, Inc. . . . . .
(3.3) Certificate of Merger of MWC
Holdings, Inc. into Hayes Wheels
International, Inc., filed with the
Secretary of State of the State of
Delaware on July 2, 1996 . . . . . . . . .
(4.1) Indenture, dated as of July 2,
1996, among Hayes Wheels
International, Inc., certain of its
Subsidiaries and Comerica Bank, as
Trustee, relating to 11% Senior
Subordinated Notes due 2006,
including the form of Note therein . . . .
(4.2) Indenture, dated as of November 15,
1992, between Hayes Wheels
International, Inc. and
Manufacturers and Traders Trust
Company, as Trustee, relating to 9-
1/4% Senior Notes due 2002,
including all exhibits thereto
[Incorporated by reference to
Exhibit 4.2 of the Report on Form
10-K of the Company for the year
ended January 31, 1993 (File No. 1-
11592)] . . . . . . . . . . . . . . . . .
(4.3) First Supplemental Indenture, dated
as of June 20, 1996, between Hayes
Wheels International, Inc. and
Manufacturers and Traders Trust
Company, as Trustee, to the
Indenture, dated as of November 15,
1992, relating to 9-1/4% Senior
Notes due 2002 . . . . . . . . . . . . . .
(4.4) Second Supplemental Indenture,
dated as of June 26, 1996, between
Hayes Wheels International, Inc.
and Manufacturers and Traders Trust
Company, as Trustee, to the
Indenture, dated as of November 15,
1992, relating to 9-1/4% Senior
Notes due 2002 . . . . . . . . . . . . . .
(10.1) Credit Agreement, dated June 27,
1996, among Hayes Wheels
International, Inc., Canadian
Imperial Bank of Commerce and
Merrill Lynch Capital Corporation . . . .
(10.2) Form of Indemnification Agreement
between Hayes Wheels International,
Inc. and each of its directors
[Filed as Exhibit B to the
Stockholders Agreement filed
herewith as Exhibit 2.2 hereto] . . . . .
(99) Press Release, dated July 2, 1996,
of Hayes Wheels International,
Inc. . . . . . . . . . . . . . . . . . . .
HAYES WHEELS INTERNATIONAL, INC.
$250,000,000
11% Senior Subordinated Notes due 2006
UNDERWRITING AGREEMENT
June 26, 1996
CIBC WOOD GUNDY SECURITIES CORP.
MERRILL LYNCH, PIERCE, FENNER & SMITH 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 corpora-
tion (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 "Underwriters"), as set forth below.
1. The Securities. Subject to the terms and
conditions herein contained, the Company proposes to issue and
sell to the Underwriters $250,000,000 aggregate principal
amount of its 11% Senior Subordinated Notes due 2006 (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 2, 1996, among the Company, Comerica Bank, a Michigan
banking corporation, as trustee (the "Trustee"), and the
Subsidiary Guarantors. The Notes and the Guarantees are
hereinafter referred to collectively as the "Securities."
The Securities are being issued and sold in connec-
tion with the merger (the "Merger") pursuant to the Merger
Agreement (the "Merger Agreement"), dated as of March 28, 1996,
between the Company and MWC Holdings, Inc., a Delaware corpora-
tion ("Holdings"), pursuant to which Holdings will merge with
and into the Company, and Motor Wheel Corporation, an Ohio
corporation ("Motor") and a wholly owned subsidiary of Hold-
ings, will become a wholly owned subsidiary of the Company.
Pursuant to the Merger Agreement (i) the outstanding capital
stock of Holdings will be converted into 3,125,000 shares of
newly issued common stock of the Company (the "New Common
Stock") and warrants ("Warrants") to purchase 1,150,000 shares
of New Common Stock and (ii) each outstanding share of the
Company's common stock will be converted into the right to
receive $28.80 in cash and one-tenth of one share of New Common
Stock (collectively, the "Equity Issuance"). The time of
consummation of the Merger is herein referred to as the "Effec-
tive Time."
At the Effective Time, the Company, Motor and the
Trustee will enter into a first supplemental indenture to the
Indenture (the "Supplemental Indenture") pursuant to which
Motor and the Motor Subsidiaries (as hereinafter defined) will
become guarantors of the Notes.
In connection with the Merger, (i) Motor proposes to
redeem (the "Redemption") all of its outstanding 11 1/2% Senior
Notes due 2000 (the "Motor Notes") upon the terms and subject
to the conditions set forth in the redemption notice to be
dated the Closing Date (as hereinafter defined) prepared by
Motor (the "Redemption Notice") and (ii) the Company has
offered to purchase (the "Tender Offer") from the holders of
its 9 1/4% Senior Notes due 2002 (the "Old Notes"), upon the
terms and subject to the conditions set forth in the Offer to
Purchase and Consent Solicitation Statement dated May 28, 1996
prepared by the Company in connection with the Tender Offer (as
amended and supplemented, the "Offer to Purchase"), any and all
of the outstanding Old Notes. Concurrently with the Tender
Offer, the Company is soliciting consents (the "Consent Solici-
tation") from holders of 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 Offer to Purchase. After receipt of the
required consents from the holders of the Old Notes, the
Company and the trustee under the Old Indenture will enter into
a supplemental indenture to give effect to the Proposed Amend-
ments. Unless otherwise indicated the use of the term Tender
Offer herein shall be deemed to include the Consent Solicitation.
The Merger, the Equity Issuance, the Redemption, the
Tender Offer and the ongoing working capital needs of the
Company will be financed by the (i) issuance and sale pursuant
to the terms of subscription agreements (collectively, the
"Subscription Agreements") of $200 million of preferred stock
of the Company (the "Preferred Equity Issuance") to certain
investors which, at the Effective Time, will be converted into
shares of New Common Stock and Warrants to purchase New Common
Stock (the "Preferred Equity Exchange"), (ii) the issuance of
the Notes, (iii) the incurrence by the Company and the Subsid-
iary Guarantors of senior secured bank financing pursuant to a
credit agreement (the "Credit Agreement") by and among the
Company and Motor and Canadian Imperial Bank of Commerce and
Merrill Lynch Capital Corporation, as managing agents, and the
other financial institutions party thereto, as lenders, provid-
ing for term loan borrowings of up to $425 million and revolv-
ing credit borrowings of up to $220 million.
The Merger Agreement and the documents entered into
in connection therewith including, without limitation, the
agreements attached thereto as exhibits, are herein collective-
ly referred to as the "Merger Documents." This Agreement, the
Securities and the Indenture are herein collectively referred
to as the "Offering Documents." The Merger Documents, the
Offering Documents, the Subscription Agreements, the Credit
Agreement and all documents entered into or prepared in connec-
tion with the Equity Issuance, the Redemption, the Tender
Offer, the Preferred Equity Issuance and the Preferred Equity
Exchange are herein collectively referred to as the "Transac-
tion Documents."
The Merger, the issuance of the Securities, the
Equity Issuance, the Redemption, the Tender Offer, the Pre-
ferred Equity Issuance, the Preferred Equity Exchange and the
transactions contemplated by the Subscription Agreements and
the Credit Agreement are herein 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 Underwriters that:
(a) A registration statement on Form S-3 (File
No. 333-03813) with respect to the Securities, including a
prospectus, subject to completion, has been filed with the
Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (together
with the rules and regulations of the Commission promul-
gated thereunder, the "Act") by the Issuers with respect
to the Securities; and one or more amendments to such
registration statement also have been so filed. After the
execution of this Agreement, the Issuers will file with
the Commission either (x) if such registration statement,
as it may have been amended, has been declared by the
Commission to be effective under the Act prior to the
execution and delivery hereof, a prospectus in the form
most recently included in an amendment to such registra-
tion statement (or, if no such amendment shall have been
filed, in such registration statement) with only such
changes or insertions therein as are required by Rule 430A
under the Act or permitted by Rule 424(b) under the Act
and as have been provided to and approved by the Under-
writers or their counsel prior to the filing thereof and
as to which the Underwriters shall not have reasonably
objected; or (y) if such registration statement, as it may
have been amended, has not been declared by the Commission
to be effective under the Act prior to the execution and
delivery hereof, an amendment to such registration state-
ment, including a form of final prospectus, a copy of
which amendment has been furnished to and approved by the
Underwriters or their counsel prior to the proposed filing
thereof. As used in this Agreement, the term "Registra-
tion Statement" means such registration statement, as
amended at the time when it was or is declared effective,
including all financial schedules and exhibits thereto and
including any information omitted therefrom pursuant to
Rule 430A under the Act and included in the Prospectus (as
hereinafter defined); the term "Preliminary Prospectus"
means each prospectus, subject to completion, filed with
such registration statement or any amendment thereto
(including the prospectus, subject to completion, if any,
included in the Registration Statement or any amendment
thereto at the time it was or is declared effective); and
the term "Prospectus" means the prospectus first filed
with the Commission pursuant to Rule 430A and Rule 424(b),
if required, or, if no prospectus is required to be filed
pursuant to Rule 430A or Rule 424(b), such term means the
prospectus included in such Registration Statement, pro-
vided that if a revised prospectus shall be provided to
the Underwriters by the Company for use in connection with
the offering and sale of the Securities that differs from
the prospectus on file at the Commission at the time such
Registration Statement becomes effective or as first filed
under Rule 430A and Rule 424(b), the term "Prospectus"
shall refer to the revised prospectus from and after the
time it is first provided to the Underwriters for such
use. If the Company has filed an abbreviated registration
statement to register additional securities pursuant to
Rule 462(b) under the Act (the "Rule 462 Registration
Statement") then any reference herein to "Registration
Statement" shall be deemed to include such Rule 462 Regis-
tration Statement. All references in this Agreement to
the Registration Statement, Preliminary Prospectus and
Prospectus and to financial statements and schedules and
other information that is "contained," "included," "set
forth," "described in" or "stated" therein (and all other
references of like import) shall be deemed to mean and
include all such financial statements and schedules and
other information that is or is deemed to be incorporated
by reference therein; and all references in this Agreement
to amendments or supplements to the Registration State-
ment, the Preliminary Prospectus or the Prospectus shall
be deemed to mean and include the filing of any document
under the Securities Exchange Act of 1934, as amended
(together with the rules and regulations of the Commission
promulgated thereunder, the "1934 Act"), that is or is
deemed to be incorporated by reference therein.
(b) The Commission has not issued any order prevent-
ing or suspending the use of any Preliminary Prospectus
nor instituted any proceeding for such purpose. When the
Registration Statement or any amendment thereto was or is
declared effective, it (i) complied or will comply in all
material respects with the requirements of the Act and
(ii) did not or 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. When the Registration Statement
becomes effective, the Indenture will have been qualified
under and will conform in all material respects to the
requirements of the Trust Indenture Act of 1939, as amend-
ed (the "Trust Indenture Act"), and the rules and regula-
tions of the Commission thereunder. The Prospectus, and
any amendment or supplement thereto, on the date first
filed with the Commission pursuant to Rule 424(b) (or if
not filed, on the date first provided to the Underwriters
in connection with the offering and sale of the Securi-
ties) and on the Closing Date (i) complied or will comply
in all material respects with the requirements of the Act
and (ii) did not or will not contain any untrue statement
of a material fact or omit to state any material fact
required to be stated therein or necessary in order to
make the statements therein, in the light of the circum-
stances under which they were made, not misleading. The
foregoing provisions of this paragraph (b) do not apply
to statements or omissions in the Registration Statement
or any amendment thereto or the Prospectus or any amend-
ment or supplement thereto made in reliance upon and in
conformity with written information furnished to the
Company by any Underwriter specifically for use therein,
or to the Statement of Eligibility and Qualification (Form
T-1) under the Trust Indenture Act of the Trustee filed as
an exhibit to the Registration Statement.
(c) The documents incorporated or deemed to be
incorporated by reference in the Prospectus, at the time
they were or hereafter are filed with the Commission,
complied and will comply in all material respects with the
requirements of the 1934 Act, and when read together with
the other information in the Prospectus, at the time the
Registration Statement and any amendments thereto became
or becomes effective and at the Closing Date, did not and
will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated there-
in or necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.
(d) Each of the Issuers, the Subsidiaries (as here-
inafter defined) and, to the best knowledge of the Issu-
ers, after due inquiry, Holdings, Motor and the Motor
Subsidiaries (as hereinafter defined) has been and at and
as of the Effective Time will be duly incorporated and
each of the Issuers, the Subsidiaries and, to the best
knowledge of the Issuers, after due inquiry, Holdings,
Motor and the Motor Subsidiaries 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 Prospectus and 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 or, to the best knowledge of
the Issuers, after due inquiry, Holdings, Motor or the
Motor Subsidiaries, taken as a whole (any such event a
"Material Adverse Effect"); the Company had as of the date
specified therein the authorized, issued and outstanding
capitalization set forth in the Prospectus; except as set
forth in Exhibit B-1 hereto, the Company does not have any
subsidiaries (the "Subsidiaries") other than the Subsid-
iary Guarantors and, to the best knowledge of the Company,
after due inquiry, except as set forth in Exhibit B-2
hereto, Holdings and Motor do not have any subsidiaries
(the "Motor Subsidiaries") or, in each case, 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 Subsidiar-
ies have been, and to the best knowledge of the Issuers,
after due inquiry, all of the outstanding shares of capi-
tal stock of Holdings, Motor and the Motor 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, Motor and the
Motor Subsidiaries, and 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 securi-
ties or "Blue Sky" laws); except as set forth in the
Registration Statement and the Prospectus and except for
the stock option to purchase 16.371 shares of Holdings
common stock granted to Richard W. Tuley, 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, Holdings, Motor or any Motor Subsid-
iary, agreements or other obligations of any Issuer or any
Subsidiary or, to the best knowledge of the Issuers, after
due inquiry, Holdings, Motor or any Motor 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
Holdings, Motor or any Motor Subsidiary are outstanding;
and, except for Varity Corporation and in connection with
the Preferred Equity Issuance, no holder of securities of
any Issuer or any Subsidiary or, to the best knowledge of
the Issuers, after due inquiry, Holdings, Motor or any
Motor Subsidiary is entitled to have such securities
registered under the Registration Statement.
(e) The Securities have been duly and validly autho-
rized by each of the Issuers for issuance and when execut-
ed by the Issuers and authenticated by the Trustee in
accordance with the provisions of the Indenture, and
delivered to and paid for by the Underwriters in accor-
dance 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 bene-
fits 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
and the Securities; and the Indenture has been duly and
validly authorized by the Issuers and qualified under the
Trust Indenture Act 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 enforce-
ment is considered in a proceeding at law or in equity).
(f) Each of Motor and the Motor Subsidiaries has the
requisite corporate power and authority to issue and
deliver its Guarantee as provided in the Supplemental
Indenture and to perform its obligations under the Inden-
ture; the Guarantees of Motor and each of the Motor Sub-
sidiaries to be endorsed on the Notes have been duly and
validly authorized; the Supplemental Indenture has been
duly and validly authorized by the Issuers, Motor and the
Motor Subsidiaries.
(g) 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, en-
forceable 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 prin-
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.
(h) Each of the Issuers has and, to the best knowl-
edge of the Issuers, after due inquiry, Holdings, Motor
and the Motor Subsidiaries have, to the extent each is or
will be a party thereto (whether or not by operation of
law), all requisite corporate power and authority to
execute, deliver and perform its obligations under each of
the Transaction Documents (other than the Offering Docu-
ments); each of the Transaction Documents (other than the
Offering Documents), to the extent each is or will be a
party thereto, has been duly and validly authorized,
executed and delivered by the Issuers and, to the best
knowledge of the Issuers, after due inquiry, Holdings,
Motor and the Motor Subsidiaries and each Transaction
Document (other than the Offering Documents) constitutes a
valid and legally binding agreement of the Issuers and, to
the best knowledge of the Issuers, after due inquiry,
Holdings, Motor and the Motor Subsidiaries enforceable
against the Issuers and, to the best knowledge of the
Issuers, after due inquiry, Holdings, Motor and the Motor
Subsidiaries, 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 prin-
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; except as set forth in the
Registration Statement and Prospectus, no consent, approv-
al, 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, Holdings,
Motor and the Motor Subsidiaries to the extent each is or
will be a party thereto (whether or not by operation of
law), or to the consummation by the Issuers or, to the
best knowledge of the Issuers, after due inquiry, Hold-
ings, Motor and the Motor Subsidiaries of any of the
transactions contemplated thereby, except to the extent
contemplated by the Merger Agreement or as may be required
and have been obtained under the Act, the Trust Indenture
Act or state securities or "Blue Sky" laws in connection
with the purchase and distribution of the Securities by
the Underwriters; and none of the Issuers or, to the best
knowledge of the Issuers, after due inquiry, Holdings,
Motor or the Motor Subsidiaries is (i) in violation of its
certificate of incorporation or bylaws, (ii) in violation
of any statute, judgment, decree, order, rule or regula-
tion 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 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.
(i) The execution, delivery and performance by the
Issuers and, to the best knowledge of the Issuers, after
due inquiry, Holdings, Motor and the Motor Subsidiaries to
the extent each is a party thereto, of each of the Trans-
action Documents, and the consummation by the Issuers and,
to the best knowledge of the Issuers, after due inquiry,
Holdings, Motor and the Motor Subsidiaries of the transac-
tions contemplated thereby and the fulfillment of the
terms thereof, will not violate, conflict with or consti-
tute 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, any of Holdings, Motor
and the Motor 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, the Subsidiaries, Holdings, Motor or the
Motor Subsidiaries or (c) (assuming compliance with all
applicable 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 knowl-
edge of the Issuers, after due inquiry, Holdings, Motor or
the Motor Subsidiaries or any of their respective proper-
ties or assets, which violation, conflict, breach or
default would, individually or in the aggregate, have a
Material Adverse Effect.
(j) Each of the Transactions has been duly autho-
rized by each of the Issuers and, to the best knowledge of
the Issuers, after due inquiry, Holdings and Motor, to the
extent each is or will be a party thereto.
(k) The audited consolidated financial statements
and schedules of each of the Company and Holdings included
in the Registration Statement and the Prospectus (or, if
the Prospectus is not in existence, the most recent Pre-
liminary Prospectus) present fairly the consolidated
financial position, results of operations and cash flows
of the Company and, in the case of Holdings, to the best
knowledge of the Issuers, after due inquiry, of Holdings,
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 consoli-
dated financial statements and the related notes of the
Company and Holdings included in the Registration State-
ment and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) 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, Holdings,
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 Registration Statement
and the Prospectus (or, if the Prospectus is not in exis-
tence, the most recent Preliminary Prospectus) present
fairly the information shown therein and have been pre-
pared and compiled on a basis consistent with the audited
and unaudited financial statements included therein,
except as otherwise stated therein; and each of KPMG Peat
Marwick LLP and Ernst & Young LLP, which has examined
certain of such financial statements and schedules as set
forth in their reports included in the Registration State-
ment and the Prospectus, is an independent public account-
ing firm as required by the Act.
(l) (i) The pro forma financial statements and other
pro forma financial information (including the notes
thereto) included in the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus) (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 Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus) are reasonable and the
adjustments used therein are appropriate to give effect to
the transactions or circumstances referred to therein.
(m) Except as described in the Prospectus (or, if
the Prospectus is not in existence, the most recent Pre-
liminary Prospectus), 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 inqui-
ry, Holdings, Motor or the Motor 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 Holdings, Motor or
the Motor 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 Prospectus under the captions "Use of
Proceeds" and "The Transactions."
(n) The Issuers and the Subsidiaries and, to the
best knowledge of the Issuers, after due inquiry, Hold-
ings, Motor and the Motor 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 de-
scribed in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) and
(ii) the loss of which would, individually or in the
aggregate, have a Material Adverse Effect.
(o) None of the Issuers or the Subsidiaries has
received and, to the best knowledge of the Issuers, after
due inquiry, none of Holdings, Motor or the Motor Subsid-
iaries 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 in-
fringement or conflict were sustained, would, individually
or in the aggregate, have a Material Adverse Effect.
(p) Each of the Issuers and the Subsidiaries has
obtained and, to the best knowledge of the Issuers, after
due inquiry, Holdings, Motor and the Motor 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.
(q) Subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus) and except as de-
scribed therein, (i) the Issuers and the Subsidiaries
have not incurred and, to the best knowledge of the Issu-
ers, after due inquiry, Holdings, Motor and the Motor
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, Holdings,
Motor and the Motor Subsidiaries, taken as a whole, have
not purchased any of their respective outstanding capital
stock, or, except for the Company's regular quarterly
dividend, which has been declared but not paid, declared,
paid or otherwise made any dividend or distribution of any
kind on any of their respective capital stock or other-
wise.
(r) There are no contracts or other documents re-
quired to be described in the Registration Statement or
Prospectus or to be filed as exhibits to the Registration
Statement by the Act that have not been described or filed
as required.
(s) None of the Issuers or the Subsidiaries or, to
the best knowledge of the Issuers, after due inquiry,
Holdings, Motor or the Motor Subsidiaries has taken or
will take any action that would cause this Agreement or
the issuance or sale of the Securities, the Preferred
Stock, the New Common Stock or the Warrants 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.
(t) Each of the Issuers and the Subsidiaries has
and, to the best knowledge of the Issuers, after due
inquiry, each of Holdings, Motor and the Motor Subsidiar-
ies has, good and marketable title to all real property
described in the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus) 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 Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus) or
such as would not, individually or in the aggregate, have
a Material Adverse Effect.
(u) Each of the Issuers and the Subsidiaries has
and, to the best knowledge of the Issuers, after due
inquiry, each of Holdings, Motor and the Motor Subsidiar-
ies 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 Holdings, Motor or the Motor Subsid-
iaries is contesting in good faith and for which any
Issuer or Subsidiary or, to the best knowledge of the
Issuers, after due inquiry, any of Holdings, Motor or the
Motor Subsidiaries reasonably believes that it has provid-
ed 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, any of Holdings, Motor or the
Motor Subsidiaries that would, individually or in the
aggregate, have a Material Adverse Effect.
(v) (i) Immediately after the consummation of the
Merger 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 contin-
gent 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 transac-
tions 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.
(w) (i) The Issuers have delivered to the Underwrit-
ers 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 Docu-
ments since their date of execution or from the form in
which any such Transaction Document has been delivered to
the Underwriters; and (ii) there exists as of the date
hereof (after giving effect to the transactions contem-
plated 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 Transac-
tion 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 Holdings to consummate the
Merger and the other Transactions.
(x) Except as disclosed in the Registration State-
ment or Prospectus (or, if the Prospectus is not in exis-
tence, the most recent Preliminary Prospectus), 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, Holdings, Motor and the Motor Subsid-
iaries 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, Holdings, Motor and the Motor 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 re-
quirements, (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 Holdings, Motor or the Motor Subsidiaries
and (D) none of the Issuers or the Subsidiaries and, to
the best knowledge of the Issuers, after due inquiry, none
of Holdings, Motor or the Motor Subsidiaries, has knowl-
edge 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.
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, policy or rule of
common law and any judicial or administrative interpreta-
tion thereof, including any judicial or administrative
order, consent decree or judgment binding on any of the
Issuers or the Subsidiaries or Holdings, Motor or the
Motor 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, notices of responsibili-
ty, information requests, liens, notices of noncompliance
or violation, investigations or proceedings relating in
any way to any Environmental Law.
(y) None of the Issuers or the Subsidiaries and, to
the best knowledge of the Issuers, after due inquiry, none
of Holdings, Motor or the Motor Subsidiaries is required
to register as an "investment company" or a company "con-
trolled by" an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
(z) Except as stated in the Prospectus (or, if the
Prospectus is not in existence, the most recent Prelimi-
nary Prospectus) none of the Issuers or the Subsidiaries
or, to the best knowledge of the Issuers, after due inqui-
ry, none of Holdings, Motor or the Motor 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 Underwriters).
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 condi-
tions herein set forth, the Company agrees to issue and sell to
the Underwriters, and each of the Underwriters severally agrees
to purchase from the Company, at 97% of their principal amount,
the respective aggregate principal amounts of the Notes set
forth opposite their respective names on Exhibit C hereto. The
obligations of the Underwriters under this Agreement are
several and not joint. One or more certificates in definitive
form for the Notes that the Underwriters have agreed to pur-
chase hereunder, and in such denomination or denominations and
registered in such name or names, as each Underwriter requests
upon notice to the Company at least 48 hours prior to the
Closing Date, shall be delivered by or on behalf of the Compa-
ny, against payment by or on behalf of the Underwriters, of the
purchase price therefor by wire transfer of immediately avail-
able 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 12:00 p.m., New
York time, on July 2, 1996, or at such date as the Underwriters
and the Company may agree upon or as the Underwriters may
determine pursuant to Section 7(i) hereof, 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 Underwriters at the offices in New York, New
York of CIBC Wood Gundy Securities Corp. at least 24 hours
prior to the Closing Date.
The Company hereby confirms its engagement of Merrill
Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch")
as, and Merrill Lynch hereby confirms its engagement with the
Company to render services as, a "qualified independent under-
writer" within the meaning of Rules 2720(b)(15)(A) through
(b)(15)(G) of the Conduct Rules of the NASD with respect to the
offering and sale of the Securities. Merrill Lynch, solely in
its capacity as qualified independent underwriter and not
otherwise, is referred to herein as the "Independent Underwriter."
4. Offering by the Underwriters. After the Regis-
tration Statement becomes effective, the Underwriters propose
to offer for sale to the public the Securities at the price and
upon the terms set forth in the Prospectus. The Underwriters
will notify the Issuers when such offer and sale has been
completed.
5. Certain Covenants. The Issuers jointly and
severally covenant and agree with the Underwriters that:
(i) Each of the Issuers will use its best efforts to
cause the Registration Statement, if not effective at the time
of execution of this Agreement, and any amendments thereto, to
become effective promptly. If, at the time that the Registra-
tion Statement becomes effective, any information shall have
been omitted therefrom in reliance upon Rule 430A of the rules
and regulations of the Commission under the Act, then immedi-
ately following the execution of this Agreement, the Issuers
will prepare, and thereafter the Issuers will file or transmit
for filing with the Commission in accordance with such Rule
430A and Rule 424(b) of the rules and regulations of the
Commission under the Act, copies of an amended Prospectus
relating to such Registration Statement, or, if required by
such Rule 430A, a post-effective amendment to such Registration
Statement (including an amended Prospectus), containing all
information so omitted. During any time when a prospectus
relating to the Securities is required to be delivered under
the Act, the Issuers will comply with all requirements imposed
by the Act, the Exchange Act and the Trust Indenture Act to the
extent necessary to permit the continuance of sales or dealings
in the Securities in accordance with the provisions hereof and
of the Prospectus. The Issuers will give each Underwriter
notice of their intention to file any amendment to the Regis-
tration Statement (including any post-effective amendment) or
any amendment or supplement to the Prospectus (including any
revised prospectus that the Issuers propose for use by the
Underwriters in connection with the offering of the Securities
that differs from any prospectus on file at the Commission at
the time the Registration Statement including such prospectus
becomes effective, whether or not such revised prospectus is
required to be filed pursuant to Rule 424(b) of the rules and
regulations of the Commission under the Act), will furnish the
Underwriters with copies of any such amendment or supplement a
reasonable amount of time prior to such proposed filing or use,
as the case may be, and will not file any such amendment or
supplement or use any such prospectus to which the Underwriters
or counsel for the Underwriters shall reasonably object or
which is not in compliance with the Act. The Issuers will
advise the Underwriters, promptly after they receive notice
thereof, of the time when the Registration Statement or any
amendment thereto has been filed or declared effective or the
Prospectus or any amendment or supplement thereto has been
filed.
(ii) The Issuers will advise the Underwriters, promptly
after receiving notice or obtaining knowledge thereof, of (a)
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or any amendment
thereto or any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, or any amendment or
supplement thereto, (b) the suspension of the qualification of
the Notes or the Guarantees for offering or sale in any juris-
diction, (c) the institution, threatening or contemplation of
any proceeding for any such purpose or (d) any request made by
the Commission for amending the Registration Statement, for
amending or supplementing the Prospectus or for additional
information. Each of the Issuers will use its best efforts to
prevent the issuance of any such stop order and, if any such
stop order is issued, to obtain the withdrawal thereof as
promptly as possible.
(iii) The Issuers will cooperate with the Underwriters in
arranging for the qualification of the Securities for offering
and sale under the securities or "Blue Sky" laws of such
jurisdictions as the Underwriters 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
Underwriters; 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.
(iv) If any event shall occur as a result of which it is
necessary, in the opinion of counsel for the Underwriters, to
amend or supplement the Prospectus in order to make such
Prospectus not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, or if for
any other reason it shall be necessary to amend or supplement
the Prospectus in order to comply with the Act and the Exchange
Act, the Issuers shall (subject to Section 5(i)) forthwith
amend or supplement such Prospectus so that, as so amended or
supplemented, such Prospectus will not include an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light
of the circumstances existing at the time it is delivered to a
purchaser, not misleading and will comply in all material
respects with the Act and the Exchange Act, and the Issuers
will furnish to the Underwriters, without charge, a reasonable
number of copies of such amendment or supplement.
(v) The Issuers will, without charge, provide (a) to each
Underwriter and to counsel for the Underwriters a signed copy
of each registration statement originally filed with respect to
the Securities and each amendment thereto (in each case includ-
ing exhibits thereto) and (b) so long as a prospectus relating
to the Securities is required to be delivered under the Act, as
many copies of each Preliminary Prospectus or Prospectus or any
amendment or supplement thereto as the Underwriters may reason-
ably request.
(vi) The Company will make generally available to its
security holders as soon as practicable, but not later than 90
days after the close of the period covered thereby, a consoli-
dated earning statement (in form complying with the provisions
of Rule 158 of the rules and regulations of the Commission
under the Act ("Rule 158")) covering a twelve-month period
beginning not later than the first day of the fiscal quarter of
the Company next following the "effective date" (as defined in
Rule 158) of the Registration Statement, which consolidated
earning statement shall satisfy the provisions of Section 11(a)
of the Act.
(vii) During the period of five years hereafter, the
Company will furnish to the Underwriters (a) as soon as avail-
able, a copy of each report or other communication (financial
or otherwise) of the Company mailed to the Trustee or holders
of the Notes, stockholders or filed with the Commission, and
(b) from time to time such other information concerning the
Company as you may reasonably request.
(viii) 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 Underwriters
of their obligations hereunder after all conditions hereunder
have been satisfied in accordance herewith) or if this Agree-
ment shall be terminated by the Underwriters 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
Underwriters) incurred by you in connection herewith.
(ix) The Company will apply the net proceeds from the
sale of the Securities as set forth under "Use of Proceeds" in
the Prospectus.
(x) Prior to the Closing Date, the Company will furnish
to the Underwriters, 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 Issuers and the
Subsidiaries, for any period subsequent to the period covered
by the most recent financial statements appearing in the
Registration Statement and the Prospectus.
6. Expenses. Notwithstanding any termination of
this Agreement (pursuant to Section 10 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, and filing with the Commission of the
registration statement (including financial statements and
exhibits thereto), each Preliminary Prospectus, the Prospectus
and each amendment or supplement to any of them; (ii) the
printing (or reproduction) and delivery (including postage, air
freight charges and charges for counting and packaging) of such
copies of the registration statement, each Preliminary Prospec-
tus, the Prospectus and all amendments or supplements to any of
them 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 Notes 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 Underwriters, 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 disburse-
ments of counsel to the Underwriters relating to such registra-
tion and qualification); (vi) the filing fees in connection
with any filings required to be made with the National Associa-
tion of Securities Dealers, Inc. (the "NASD") (including the
reasonable fees and disbursements of counsel to the Underwrit-
ers in respect thereof and in connection with obtaining an
opinion of the NASD concerning the fairness of the terms and
arrangements of the underwriting of the Securities); (vii) the
transportation and other expenses incurred by or on behalf of
Company representatives in connection with presentations to
prospective purchasers of the Securities; (viii) the fees and
expenses of the Company's accountants and the fees and expenses
of counsel (including local and special counsel) for the
Issuers; (ix) fees and expenses of the Trustee including fees
and expenses of its counsel; and (x) any fees charged by
investment rating agencies for the rating of the Securities.
7. Conditions of the Underwriters' Obligations.
The several obligations of the Underwriters to purchase and pay
for the Securities are subject to the accuracy of the represen-
tations 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 Underwriters:
(i) If the registration statement originally filed with
respect to any of the Securities, or any amendment thereto
filed prior to the Closing Date has not been declared effective
as of the time of execution hereof, such registration statement
or such amendment shall have been declared effective not later
than 12:00 noon, New York City time, on the date on which the
amendment to such registration statement originally filed with
respect to such Securities, or to the Registration Statement,
as the case may be, containing information regarding the
initial public offering price of such Securities has been filed
with the Commission, or such later time and date as shall have
been consented to by the Underwriters; if required, the Pro-
spectus and any amendment or supplement thereto shall have been
filed in accordance with Rule 424(b) under the Act; no stop
order suspending the effectiveness of the Registration State-
ment or any amendment thereto or the qualification of the
Indenture under the Trust Indenture Act shall have been issued
and no proceedings for that purpose shall have been instituted
or to the knowledge of the Issuers or the Underwriters, shall
be threatened or contemplated by the Commission.
(ii) 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 Prospectus shall be enjoined (temporarily or permanent-
ly) 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
Underwriters' activities in connection therewith, the Transac-
tions or any other transactions contemplated by any of the
Transaction Documents or the Prospectus.
(iii) Subsequent to the effective date of this Agreement,
there shall not have occurred (i) any change, or any develop-
ment involving a prospective change, in or affecting the
condition (financial or other), business, properties, pros-
pects, net worth or results of operations of the Issuers, the
Subsidiaries, Holdings, Motor and the Motor Subsidiaries, taken
as a whole, not contemplated by the Prospectus that, in your
opinion, would materially adversely affect the market for the
Notes, or (ii) any event or development relating to or involv-
ing any of the Issuers, Holdings or Motor or any of the respec-
tive officers or directors of the Issuers, Holdings or Motor
that makes any statement made in the Prospectus untrue or that,
in the opinion of the Issuers and their counsel or the Under-
writers and their counsel, requires the making of any addition
to or change in the Prospectus in order to state a material
fact required by the Act or any other law to be stated therein
or necessary in order to make the statements made therein not
misleading.
(iv) The Underwriters shall have received an opinion of
counsel to the Issuers in form and substance satisfactory to
the Underwriters and counsel to the Underwriters, dated the
Closing Date, of each of (i) Skadden, Arps, Slate, Meagher &
Flom, substantially in the form of Exhibit D-1 hereto, (ii)
Altheimer & Gray substantially in the form of Exhibit D-2
hereto, (iii) Jones, Day, Reavis & Pogue substantially in the
form of Exhibit D-3 hereto and (iv) Barry J. Miller, Esq.
substantially in the form of Exhibit D-4 hereto.
(v) The Underwriters shall have received an opinion,
dated the Closing Date, of Cahill Gordon & Reindel, counsel to
the Underwriters, with respect to the sufficiency of certain
legal matters relating to this Agreement and such other
related matters as the Underwriters may require. In rendering
such opinion, Cahill Gordon & Reindel shall have received and
may rely upon such certificates and other documents and infor-
mation as they may reasonably request to pass upon such mat-
ters. 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.
(vi) The Underwriters shall have received, from KPMG Peat
Marwick LLP, independent public accountants for the Issuers,
and Ernst & Young LLP, independent public accountants for
Holdings and Motor, "comfort" letters dated the date hereof and
the Closing Date, in form and substance reasonably satisfactory
to the Underwriters and Cahill Gordon & Reindel, counsel to the
Underwriters.
(vii) The representations and warranties of the Issuers
contained in this Agreement shall be true and correct on and as
of the Closing Date; the Issuers shall have complied in all
material respects with all agreements and satisfied all condi-
tions on their part to be performed or satisfied hereunder at
or prior to the Closing Date.
(viii) 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 from
that set forth or contemplated in the Registration Statement or
the Prospectus (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 Issuers, taken as a whole, other than
those reflected in the Registration Statement or the Prospectus
(or any amendment or supplement thereto) or contemplated by the
Transaction Documents.
(ix) 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 7 have been satisfied.
(x) There shall have been no material amendments,
alterations, modifications or waivers of any provisions of the
Merger Agreement since the date of this Agreement; the Merger
Agreement shall be in full force and effect; the certificate of
merger with respect to the Merger shall have been cleared for
filing by the Secretary of State of the State of Delaware and
the Company shall be prepared to file the certificate of merger
immediately after the closing of the sale of the Notes hereun-
der; and the Merger shall occur immediately following the
closing of the sale of the Notes by the Company hereunder.
(xi) The Underwriters 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
Notes by the Company hereunder, the Company shall have borrowed
not less than an aggregate of $425,000,000 in term loan
borrowings and have available not less than an aggregate of
$100,000,000 in revolving credit borrowings, in each case,
pursuant to the Credit Agreement.
(xii) The Underwriters shall have received from the
Company a true and correct copy of each of the Subscription
Agreements and there shall have been no material amendments,
alterations, modifications or waivers of any provisions of any
of the Subscription Agreements since the date of this Agree-
ment; each of the Subscription Agreements shall be in full
force and effect; the Company shall have received gross pro-
ceeds of not less than $200,000,000 from the Preferred Equity
Issuance and the Preferred Equity Exchange shall have occurred
simultaneously with the consummation of the Merger.
(xiii) Each of the Proposed Amendments, except for any
change of control amendment, to the Old Notes shall have been
approved by the requisite percentages of holders of Old Notes;
simultaneously with the closing of the sale of the Notes by the
Company, the Company shall have accepted for payment and have
instructed the depositary with respect thereto to pay to the
trustee under the indenture governing the Old Notes the pur-
chase price for all Old Notes tendered pursuant to the Tender
Offer.
(xiv) Motor shall have issued the Redemption Notice;
simultaneously with the closing of the sale of the Notes by the
Company, the Company shall have deposited funds sufficient to
effect the Redemption.
(xv) The Merger shall have been approved on or before the
Closing Date by the stockholders of each of the Company and
Holdings.
(xvi) On the Closing Date, the Underwriters shall have
received a letter, dated the Closing Date, from Houlihan Lokey
Howard & Zukin, Inc. with respect to the solvency of the
Issuers and the Subsidiaries in form, scope and substance
reasonably satisfactory to the Underwriters.
(xvii) 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 Underwrit-
ers, shall be deemed a representation and warranty by such
Issuer, to each Underwriter 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 reason-
ably satisfactory in all material respects to the Underwriters
and counsel to the Underwriters. The Issuers shall furnish to
the Underwriters such conformed copies of such opinions,
certificates, letters, schedules, documents and instruments in
such quantities as the Underwriters shall reasonably request.
8. Indemnification and Contribution. (a)Each
Issuer jointly and severally agrees to indemnify and hold
harmless each Underwriter, and each person, if any, who con-
trols either of the Underwriters within the meaning of Sec-
tion 15 of the Act or Section 20 of the Exchange Act, against
any losses, claims, damages or liabilities, joint or several,
to which such Underwriter 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 registration statement
originally filed with respect to the Securities or any amend-
ment thereto or any Preliminary Prospectus or the Prospectus or
any amendment or supplement thereto or (B) any application or
other document, or any amendment or supplement thereto, execut-
ed 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
registration statement or any amendment thereto, any Prelimi-
nary Prospectus or the Prospectus or any amendment or supple-
ment 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 Underwriter and each such
controlling person for any reasonable and documented
out-of-pocket legal or other expenses reasonably incurred by
the Underwriters 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 Underwriter or
any controlling person of such Underwriter 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 any registration statement
or any amendment thereto, any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, or any
Application in reliance upon and in conformity with written
information furnished to the Issuers by or on behalf of such
Underwriter specifically for use therein; and provided, fur-
ther, that none of the Issuers will be liable to an Underwriter
or any person controlling such Underwriter with respect to any
such untrue statement or omission made in any Preliminary
Prospectus that is corrected in the Prospectus (or any amend-
ment or supplement thereto) if the person asserting any such
loss, claim, damage or liability purchased Securities from such
Underwriter in reliance upon the Preliminary Prospectus but was
not sent or given a copy of the Prospectus (as amended or
supplemented) that was made available by the Issuers to such
Underwriter at or prior to the written confirmation of the sale
of the Securities to such person in any case where such deliv-
ery of such Prospectus (as so amended or supplemented) is
required by the Act, unless such failure to deliver such
Prospectus (as amended or supplemented) was a result of noncom-
pliance by the Issuers with Section 5(v)(b) of this Agreement.
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 Underwriters, 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 Under-
writers may be sought hereunder (whether or not the Underwrit-
ers or any person who controls either of the Underwriters
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 the Underwriters and each
such controlling person from all liability arising out of such
claim, action, suit or proceeding.
(b) Each Issuer also jointly and severally agrees to
indemnify and hold harmless the Independent Underwriter and
each person, if any, who controls the Independent Underwriter
within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act, against any losses, claims, damages or
liabilities incurred as a result of the Independent
Underwriter's participation as a "qualified independent under-
writer" within the meaning of Rules 2720(b)(15)(A) through
(b)(15)(G) of the Conduct Rules of the NASD in connection with
the offering of the Securities, except for any losses, claims,
damages, liabilities and judgments resulting from the Indepen-
dent Underwriter's or such controlling person's willful miscon-
duct or gross negligence.
(c) Each Underwriter will severally and not jointly
indemnify and hold harmless the Issuers, their respective
directors, officers who signed the Registration Statement 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 liabili-
ties (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 Registration Statement or
any amendment thereto, any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, or any
Application or (ii) the omission or the alleged omission to
state therein a material fact required to be stated in the
Registration Statement or any amendment thereto, any Prelimi-
nary Prospectus or the Prospectus or any amendment or supple-
ment thereto, or any Application, or necessary to make the
statements therein (in the case of any Preliminary Prospectus,
the Prospectus or any amendment or supplement thereto or any
Application, in the light of the circumstances under which such
statements were made) 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 informa-
tion furnished to any of the Issuers by or on behalf of such
Underwriter 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 Underwriters may otherwise have to the indemnified
parties. The Underwriters will not, without the prior written
consent of the Issuers, which shall not be unreasonably with-
held 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 of any such Issuer and each such control-
ling person from all liability arising out of such claim,
action, suit or proceeding.
(d) Promptly after receipt by an indemnified party
under this Section 8 of notice of the commencement of any
action, such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under this
Section 8, 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 substan-
tial 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 indemni-
fied party; provided, however, that if the defendants in any
such action include both the indemnified party and the indemni-
fying 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 indem-
nified 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 indemnify-
ing 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 indemni-
fying party will not be liable to such indemnified party under
this Section 8 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 preceding sentence (it being under-
stood, however, that in connection with such action the indem-
nifying 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 Underwriters in the case of
paragraph (a) of this Section 8 or the Issuers in the case of
paragraph (c) of this Section 8, representing the indemnified
parties under such paragraph (a) or paragraph (c), 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 indem-
nifying parties; or (iii) the indemnifying party shall have
failed to assume the defense or retain counsel reasonably
satisfactory to the indemnified party. If indemnity is sought
pursuant to paragraph (c) of this Section 8, then in addition
to such counsel for the indemnified parties, the indemnifying
party shall be liable for the reasonable fees and expenses of
not more than one separate counsel (in addition to any neces-
sary local counsel) for the Independent Underwriter in its
capacity as a "qualified independent underwriter" and all
persons, if any, who control the Independent Underwriter within
the meaning of Section 15 of the Act or Section 20 of the
Exchange Act if, in the reasonable judgment of the Independent
Underwriter, there may exist a conflict of interest between the
Independent Underwriter and the other indemnified parties. In
the case of any such separate counsel for the Independent
Underwriter and such control persons of the Independent Under-
writer, such counsel, which shall be reasonably acceptable to
the Company, shall be designated in writing by the Independent
Underwriter. After such notice from the indemnifying parties
to such indemnified party (so long as the indemnified party
shall have informed the indemnifying parties of such action in
accordance with this Section 8 on a timely basis prior to the
indemnified party seeking indemnification hereunder), the
indemnifying parties will not be liable under this Section 8
for the costs and expenses of any settlement of such action
effected by such indemnified party without the consent of the
indemnifying party, unless such indemnified party waived its
rights under this Section 8, in which case the indemnified
party may effect such a settlement without such consent.
(e) In circumstances in which the indemnity agree-
ment provided for in the preceding paragraphs of this Section 8
is unavailable or insufficient to hold harmless an indemnified
party in respect of any losses, claims, damages or liabilities
(or actions in respect thereof), 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 liabili-
ties (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 indemnify-
ing 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 Underwriters 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 underwriting
discounts and commissions) received by the Issuers bear to the
total underwriting discounts and commissions received by the
Underwriters. 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
Underwriters 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 Underwriters agree that Merrill Lynch will not receive
any additional benefits hereunder for serving as the Indepen-
dent Underwriter in connection with the offering and sale of
the Securities. The Issuers and the Underwriters 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 Underwriters 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 (e). Notwithstanding any other provision of
this paragraph (e), the Underwriters shall not be obligated to
make contributions hereunder that in the aggregate exceed the
total underwriting discounts and commissions received by the
Underwriters under this Agreement, less the aggregate amount of
any damages that the Underwriters 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 fraudu-
lent misrepresentation. For purposes of this paragraph (e),
each person, if any, who controls any of the Underwriters
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 Underwriters, and each director of any of the Issuers, each
officer of any of the Issuers who signed the Registration
Statement and each person, if any, who controls any of the
Issuers within the meaning of Section 15 of the Act or Sec-
tion 20 of the Exchange Act, shall have the same rights to
contribution as the Issuers.
9. Survival Clause. The respective representa-
tions, warranties, agreements, covenants, indemnities and other
statements of the Issuers, their respective officers and the
Underwriters 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 investi-
gation made by or on behalf of the Issuers, any of their
respective officers or directors, the Underwriters or any
controlling person referred to in Section 8 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
Underwriters and indemnified parties referred to in Section 8
hereof. The respective agreements, covenants, indemnities and
other statements set forth in Sections 6 and 8 hereof shall
remain in full force and effect, regardless of any termination
or cancellation of this Agreement.
10. Termination. (a) This Agreement may be termi-
nated in the sole discretion of the Underwriters 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 Holdings,
Motor or the Motor 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), proper-
ties, prospects or results of operations of the Issuers, 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, condi-
tion (financial or other), properties, prospects or results of
operations of the Issuers, taken as a whole, except as de-
scribed in or contemplated by the Prospectus (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 ex-
change;
(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 or (C) any material
change in the financial markets of the United States that, in
the sole judgment of the Underwriters, makes it impracticable
or inadvisable to proceed with the public offering or the
delivery of the Securities as contemplated by the Registration
Statement, as amended as of the date hereof.
(b) Termination of this Agreement pursuant to this
Section 10 shall be without liability of any party to any other
party except as provided in Section 9 hereof.
11. Notices. All communications hereunder shall be
in writing and, if sent to the Underwriters, shall be mailed or
delivered or telecopied and confirmed in writing to the Under-
writers 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 c/o Hayes Wheels International, Inc.,
38481 Huron River Drive, Romulus, Michigan 48174, Attention:
General Counsel and with a copy to Skadden, Arps, Slate,
Meagher & Flom, One Rodney Square, Wilmington, Delaware 19801,
Attention: Robert B. Pincus, Esq.
12. Successors. This Agreement shall inure to the
benefit of and be binding upon the Underwriters and each of the
Issuers and their respective successors and legal representa-
tives, 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 8 of
this Agreement shall also be for the benefit of any person or
persons who control the Underwriters within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act and
(ii) the indemnities of the Underwriters contained in Section 8
of this Agreement shall also be for the benefit of the direc-
tors of the Issuers, their respective officers who have signed
the Registration Statement 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 Underwriters will be deemed a successor because of
such purchase.
13. Joint and Several Obligations. All of the
obligations of the Issuers hereunder shall be joint and several
obligations of each of them.
14. Information Supplied by the Underwriters. The
statements set forth in the last paragraph on the front cover
page of the Prospectus and in the first, third and fifth
paragraphs under the heading "Underwriting" in the Prospectus
(to the extent such statements relate to the Underwriters)
constitute the only information furnished by the Underwriters
to the Issuers for purposes of Section 2(b) hereof.
15. 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.
16. 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.
17. 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.
If the foregoing correctly sets forth our understand-
ing, 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
Underwriters.
Very truly yours,
HAYES WHEELS INTERNATIONAL, INC.,
a Delaware corporation
By: /s/ William D. Shovers
--------------------------------
Name: William D. Shovers
Title: Vice President and Chief
Financial Officer
HAYES WHEELS INTERNATIONAL-CALIFORNIA, INC.,
a Delaware corporation
By: /s/ William D. Shovers
--------------------------------
Name: William D. Shovers
Title: Vice President and Chief
Financial Officer
HAYES WHEELS INTERNATIONAL-GEORGIA, INC.,
a Delaware corporation
By: /s/ William D. Shovers
--------------------------------
Name: William D. Shovers
Title: Vice President and Chief
Financial Officer
HAYES WHEELS INTERNATIONAL-INDIANA, INC.,
a Delaware corporation
By: /s/ William D. Shovers
--------------------------------
Name: William D. Shovers
Title: Vice President and Chief
Financial Officer
HAYES WHEELS INTERNATIONAL-MEXICO, INC.,
a Delaware corporation
By: /s/ William D. Shovers
--------------------------------
Name: William D. Shovers
Title: Vice President and Chief
Financial Officer
HAYES WHEELS INTERNATIONAL-MICHIGAN, INC.,
a Michigan corporation
By: /s/ William D. Shovers
--------------------------------
Name: William D. Shovers
Title: Vice President and Chief
Financial Officer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
CIBC WOOD GUNDY SECURITIES CORP.
By: /s/ Walter F. McLallen
_________________________________
Name: Walter F. McLallen
Title: Managing Director
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Chantal D. Simon
_________________________________
Name: Chantal D. Simon
Title: Authorized Signatory
SALOMON BROTHERS INC
By: /s/ Brian E. Kasser
_________________________________
Name: Brian E. Kasser
Title: Associate
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.
Exhibit B
B-1. Other Subsidiaries of the Company
HWI (Europe), Limited
Hayes Wheels, S.p.A
Kelsey-Hayes de Espana, S.A.
Hayes Wheels International-China, Inc.
Cromodora S.p.A
Ruedas de Venezuela, S.A. de C.V.
Hayes Wheels Autokola NH, as
Hayes Wheels de Mexico, S.A. de C.V.
Central Manufacturing Company
Reliable Transportation Components Inc.
B-2. Motor Subsidiaries
AMW Holdings, Inc.
MWC Acquisition Sub, Inc.
Motor Wheel Corporation of Canada Ltd.
Motor Wheel de Mexico SA de CV
Aluminum Wheel Technology Inc.
Exhibit C
Principal Amount
Underwriter of Notes
CIBC Wood Gundy Securities Corp. $137,500,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated 87,500,000
Salomon Brothers Inc 25,000,000
Total $250,000,000
Exhibit D-1
Form of Opinion of Skadden, Arps, Slate, Meagher & Flom
Opinion, dated the Closing Date and addressed to the
Underwriters, of Skadden, Arps, Slate, Meagher & Flom, counsel
to the Issuers, to the effect that:
(i) The Securities have been duly and validly autho-
rized by each of the Issuers other than Hayes Wheels Inter-
national-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 Underwriters in accor-
dance with the terms of the Underwriting 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 con-
veyance, 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) Each of the Delaware Issuers has the requisite
corporate power and corporate authority to execute, deliver
and perform its obligations under the Indenture and the
Securities; the Indenture has been duly and validly autho-
rized by the Delaware Issuers and qualified under the Trust
Indenture Act 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, enforce-
able 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); and the Supplemental Indenture has been duly and
validly authorized by the Delaware Issuers.
(iii) Each of the Delaware Issuers has the requisite
corporate power and authority to execute, deliver and
perform its obligations under the Underwriting Agreement.
The Underwriting Agreement has been duly and validly autho-
rized by the Delaware Issuers and, when executed and deliv-
ered by the Delaware Issuers, will constitute a valid and
legally binding agreement of the Delaware Issuers, enforce-
able against the Delaware Issuers in accordance with its
terms except (i) that the enforcement thereof may be limit-
ed by bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to
or affecting creditors' rights generally or general princi-
ples 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.
(iv) No Governmental Approval is required for the
performance by the Delaware Issuers of their respective
obligations under the Offering Documents or the consumma-
tion of the transactions contemplated thereby relating to
the Securities.
As used in this 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 Underwriting Agreement
(other than federal and state securities laws, the Trust
Indenture Act 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, quali-
fication or registration with, any Governmental Authority
pursuant to Applicable Laws.
(v) 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.
(vi) Each of the Transactions has been duly authorized
by each of the Delaware Issuers, to the extent each is or
will be a party thereto, and the Merger has been approved
by the stockholders of the Company; the Certificate of
Merger when filed with the Secretary of State of the State
of Delaware will render the Merger effective.
(vii) Upon consummation of the Merger, the obligations
of Holdings under the Transaction Documents to which Hold-
ings is a party will become the obligations of the Company
at and as of the Effective Time.
(viii) The statements set forth under the captions
"Description of the Notes" and "Description of the Credit
Agreement" in the Prospectus and the Registration State-
ment, insofar as such statements purport to summarize legal
documents or statements of law or legal conclusions are
accurate summaries in all material respects and the Inden-
ture and the Securities conform in all material respects to
the descriptions thereof thereunder.
(ix) None of the Issuers or the Subsidiaries is re-
quired 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.
(x) Neither the consummation of the transactions
contemplated by the Underwriting 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.
(xi) (a) The Registration Statement, as of its effec-
tive date, and the Prospectus, as of its date, appeared on
their face to be appropriately responsive in all material
respects to the requirements of the Act, except that in
each case we express no opinion as to the financial state-
ments, schedules and other financial and statistical data
included therein or excluded therefrom, or the Statement of
Eligibility and Qualification of the Trustee on Form T-1,
and we do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement and the Prospectus, except to the
extent referred to in paragraph (viii) above, and (b) the
Indenture appears on its face to be appropriately respon-
sive in all material respects to the requirements of the
Trust Indenture Act.
We have been advised by the Commission that the
Registration Statement and all post-effective amendments, if
any, have been declared effective under the Act; any required
filing of the Prospectus pursuant to Rule 424(b) has been made
in a manner and within the time period required by Rule 424(b);
and, to the best of our knowledge, no stop order suspending the
effectiveness of the Registration Statement or any
post-effective amendment thereto has been issued, and no
proceedings for that purpose have been instituted or threat-
ened, by the Commission.
In addition, we have participated in conferences with
officers and other representatives of the Issuers, Holdings and
Motor, representatives of the independent public accountants
and representatives of the Underwriters at which the contents
of the Registration Statement and the Prospectus 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 Registration Statement or
Prospectus or the documents incorporated by reference therein
(except as indicated in clause (viii) 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, Holdings and Motor) no facts have come to our
attention that have caused us to believe that either the
Registration Statement at the time it became effective, or any
post-effective amendment thereto as of its date, contained an
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the Pro-
spectus as of its respective date and as of the Closing Date,
or any amendment or supplement thereto as of its respective
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 state-
ments or other financial and statistical data or information
included or incorporated by reference in the Registration
Statement or Prospectus or the exhibits to the Registration
Statement, including the Statement of Eligibility and Qualifi-
cation of the Trustee on Form T-1).
Exhibit D-2
Form of Opinion of Altheimer & Gray
Opinion, dated the Closing Date and addressed to the
Underwriters, of Altheimer & Gray, counsel to the Issuers, to
the effect that:
We have participated in conferences with officers and
other representatives of the Issuers, Holdings and Motor,
representatives of the independent public accountants and
representatives of the Underwriters at which the contents
of the Registration Statement and the Prospectus 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 Registra-
tion Statement or Prospectus or the documents incorporated
by reference therein and have not made any independent
check or verification thereof, on the basis of the forego-
ing (relying as to materiality to a large extent upon the
statements of officers and other representatives of each
of the Issuers, Holdings and Motor) no facts have come to
our attention that have caused us to believe that either
the Registration Statement at the time it became effec-
tive, or any post-effective amendment thereto as of its
date, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading, or that the Prospectus as of its respective
date and as of the Closing Date, or any amendment or
supplement thereto as of its respective 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 state-
ments or other financial and statistical data or informa-
tion included or incorporated by reference in the Regis-
tration Statement or Prospectus or the exhibits to the
Registration Statement, including the Statement of Eligi-
bility and Qualification of the Trustee on Form T-1).
Exhibit D-3
Form of Opinion of Jones, Day, Reavis & Pogue
Opinion, dated the Closing Date and addressed to the
Underwriters, of Jones, Day, Reavis & Pogue, counsel to Hold-
ings, to the effect that:
(i) Each of Holdings and Motor has been duly incor-
porated and is validly existing in good standing, as a
corporation under the laws of its jurisdiction of incorpo-
ration, with the requisite corporate power and authority
to own its properties and conduct its business as de-
scribed in the Prospectus 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 Mate-
rial Adverse Effect; the outstanding shares of capital
stock of Holdings and Motor 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 are owned free and clear of all liens, encum-
brances, equities and restrictions on transferability
(other than those imposed by the Act and the state securi-
ties or "Blue Sky" laws); to the best of our knowledge,
except as set forth in the Registration Statement and
Prospectus, no options, warrants or other rights to pur-
chase from Holdings or Motor, agreements or other obliga-
tions of Holdings or Motor, to issue or other rights to
cause Holdings or Motor, to convert any obligation into,
or exchange any securities for, shares of capital stock or
ownership interests in Holdings or Motor are outstanding.
(ii) Motor has all requisite corporate power and
authority to issue and deliver its Guarantee as provided
in the Supplemental Indenture and to perform its obliga-
tions under the Indenture; the Guarantee of Motor to be
endorsed on the Notes has been duly and validly autho-
rized; and the Supplemental Indenture has been duly and
validly authorized by the Motor.
(iii) Neither Holdings or Motor is (a) in violation of
its certificate of incorporation or bylaws, (b) in viola-
tion of any statute, judgment, decree, 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 other
contract, indenture, mortgage, deed of trust, loan agree-
ment, note, lease, license, franchise agreement, permit,
certificate or 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.
(iv) The execution, delivery and performance by Motor
of the Supplemental Indenture and the consummation by
Motor of the transactions contemplated thereby and the
fulfillment of the terms thereof, will not violate, con-
flict 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 (x) the terms or provisions of any inden-
ture, mortgage, deed of trust, loan agreement, note,
lease, license, franchise agreement or agreement or in-
strument known to us to which Motor is a party or to which
any of its properties or assets are subject, (y) the
certificate of incorporation or bylaws of Motor or (z) to
the best of our knowledge (assuming compliance with all
applicable 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 Motor or any of its properties or assets, which viola-
tion, conflict, breach or default would, individually or
in the aggregate, have any Material Adverse Effect.
(v) Each of the Transactions has been duly autho-
rized by each of Holdings and Motor to the extent each is
or will be a party thereto, and the Transactions have been
approved by the stockholders of Holdings.
(vi) Except as described in the Prospectus and Regis-
tration Statement, we do not know of any legal or govern-
mental proceedings pending or threatened to which any of
Holdings or Motor is a party or to which the respective
properties or assets of Holdings or Motor are subject that
are required to be described in the Registration Statement
or the Prospectus and are not described therein, or that
seek to restrain, enjoin, prevent the consummation of or
otherwise challenge the issuance or sale of the Securities
to the Underwriters or the consummation of the transac-
tions described in the Prospectus under the captions "Use
of Proceeds" or "The Transactions".
(vii) To the best of our knowledge, each of Holdings
and Motor has obtained all licenses, permits, franchise
and other governmental authorizations the lack of which
would, individually or in the aggregate, have a Material
Adverse Effect.
(viii) Neither Holdings nor Motor is required to regis-
ter 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.
Exhibit D-4
Form of Opinion of Barry J. Miller, Esq.
Opinion, dated the Closing Date and addressed to the
Underwriters, of Barry J. Miller, Esq., Associate 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
Prospectus and is duly qualified to do business as a
foreign corporation in good standing in all other juris-
dictions where the ownership or leasing of its properties
or the conduct of its business requires such qualifica-
tion, 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, encum-
brances, equities and restrictions on transferability
(other than those imposed by the Act and the state securi-
ties or "Blue Sky" laws); to the best of my knowledge,
except as set forth in the Registration Statement and
Prospectus, no options, warrants or other rights to pur-
chase 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; and, except for Varity Corpo-
ration and in connection with the Preferred Equity Issu-
ance, no holder of securities of any Issuer or any Subsid-
iary is entitled to have such securities registered under
the Registration Statement.
(ii) The Securities have been duly and validly autho-
rized by Hayes Wheels International-Michigan, Inc.
("HWIM") and when executed by HWIM and authenticated by
the Trustee in accordance with the provisions of the
Indenture, and delivered to and paid for by the Underwrit-
ers in accordance with the terms of the Underwriting
Agreement, will have been duly executed, issued and deliv-
ered and will constitute valid and legally binding obliga-
tions of HWIM, entitled to the benefits of the Indenture
and enforceable against HWIM 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 general-
ly, and (b) general principles of equity (regardless of
whether enforceability is considered in a proceeding at
law or in equity).
(iii) HWIM has the requisite corporate power and
corporate authority to execute, deliver and perform its
obligations under the Indenture and the Securities; the
Indenture has been duly and validly authorized by HWIM and
qualified under the Trust Indenture Act and, when executed
and delivered by HWIM (assuming the due authorization,
execution and delivery by the Trustee), will constitute a
valid and legally binding agreement of HWIM, enforceable
against HWIM in accordance with its terms, except that the
enforcement thereof may be subject to (a) bankruptcy,
insolvency, fraudulent conveyance, reorganization, morato-
rium 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); and
the Supplemental Indenture has been duly and validly
authorized by HWIM.
(iv) HWIM has the requisite corporate power and
authority to execute, deliver and perform its obligations
under the Underwriting Agreement. The Underwriting Agree-
ment has been duly and validly authorized by HWIM and,
when executed and delivered by HWIM, will constitute a
valid and legally binding agreement of HWIM, enforceable
against HWIM 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 consid-
ered 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) 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 Prospectus or under the Act,
the Trust Indenture Act or state securities or "Blue Sky"
laws in connection with the purchase and distribution of
the Securities.
(vi) None of the Issuers or the Subsidiaries is (a)
in violation of its certificate of incorporation or by-
laws, (b) in violation of any statute, judgment, decree,
order, rule or regulation applicable to any of its proper-
ties 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 Docu-
ments 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
breach or default would individually or in the aggregate,
have a Material Adverse Effect.
(vii) 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 contem-
plated 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 provi-
sions of (a) the certificate of incorporation or bylaws of
HWIM, (b) 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 respec-
tive properties or assets are subject or (c) to the best
of my knowledge (assuming compliance with all applicable
state securities and "Blue Sky" laws) any statute, judg-
ment, 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.
(viii) Except as described in the Prospectus and Regis-
tration Statement, 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 are required to be described
in the Registration Statement or the Prospectus and are
not described therein, or that seek to restrain, enjoin,
prevent the consummation of or otherwise challenge the
issuance or sale of the Securities to the Underwriters or
the consummation of the transactions described in the
Prospectus under the captions "Use of Proceeds" or "The
Transactions"; and no contract, agreement or other docu-
ment is required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit
to the Registration Statement that is not described there-
in or filed as required.
(ix) Each of the Transactions has been duly autho-
rized by HWIM to the extent it is or will be a party
thereto.
(x) Each document filed pursuant to the Act (other
than the financial statements and schedules included
therein) and incorporated or deemed to be incorporated by
reference in the Registration Statement and Prospectus
complied when so filed as to form in all material respects
with the Act.
EXHIBIT C
STOCKHOLDERS' AGREEMENT
This STOCKHOLDERS' AGREEMENT ("Agreement"), dated as of
July 2, 1996, is among Hayes Wheels International, Inc., a
Delaware corporation (the "Company"), Joseph Littlejohn & Levy
Fund II, L.P., a Delaware limited partnership ("JLL"), Chase
Equity Associates, a California limited partnership ("Chase"),
CIBC WG Argosy Merchant Fund 2, L.L.C., a Delaware limited
liability company ("Argosy"), Nomura Holding America, Inc., a
Delaware corporation ("Nomura"), and TSG Capital Fund II, L.P., a
Delaware limited partnership ("TSG") (JLL, Chase, Argosy, Nomura
and TSG, each being referred to herein as a "Stockholder" and
collectively being referred to herein as the "Stockholders").
W I T N E S S E T H
WHEREAS, pursuant to Subscription Agreements, each
dated March 28, 1996, among each Stockholder, MWC Holdings, Inc.,
a Delaware corporation ("Holdings") and the Company ("Subscrip-
tion Agreements"), each Stockholder purchased (i) shares of
preferred stock, $.01 per share ("Preferred Stock"), and (ii)
warrants ("Warrants") to purchase shares of common stock, par
value $.01 per share, of the Company following consummation of
the Merger (as defined below) ("New Company Common Stock").
WHEREAS, immediately prior to the Merger, JLL owned
281.4815 shares of common stock, par value $.01 per share of
Holdings ("Holdings Common Stock").
WHEREAS, pursuant to the Agreement and Plan of Merger,
dated as of March 28, 1996, by and between Holdings and the
Company (the "Merger Agreement"), Holdings has been merged on the
date hereof with and into the Company (the "Merger"); and
WHEREAS, as a result of the Merger, (i) each share of
Holdings Common Stock issued and outstanding immediately prior to
the Merger was converted into (A) 8231.76 shares of New Company
Common Stock and (B) 3029.29 Warrants and (ii) each share of
Preferred Stock issued and outstanding immediately prior to the
Merger was converted into 31.25 shares of New Company Common
Stock.
WHEREAS, as a result of the Merger, on the date hereof,
each Stockholder owns (i) the number of shares of New Company
Common Stock set forth in column A opposite such Stockholder's
name on Exhibit A hereto and (ii) the number of Warrants set
forth in column B opposite such Stockholder's name on Exhibit A
hereto.
NOW, THEREFORE, in consideration of the mutual cove-
nants and agreements set forth herein and for good and valuable
consideration, the receipt of which is hereby acknowledged, the
parties agree as follows:
ARTICLE I
Certain Definitions
For purposes of this Agreement, the following terms
shall have the following meanings:
(a) The term "Affiliate" shall have the meaning
set forth in Rule 405 promulgated under the Securities Act.
(b) The term "Commission" shall mean the United
States Securities and Exchange Commission or any successor
agency.
(c) The term "Exchange Act" shall mean the
Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
(d) The term "Indenture" shall mean the Inden-
ture, dated as of July 2, 1996, by and among the Company, as
issuer, the Guarantors named therein and Comerica Bank, as
trustee.
(e) The term "Market Value" shall mean the
average of the closing sales prices of the New Company Common
Stock on the New York Stock Exchange Composite Tape (or as
reported on the principal exchange on which the New Company
Common Stock is then listed, which for these purposes includes
the Nasdaq Stock Market) during each of the five (5) consecutive
trading days ending on the trading day immediately prior to the
date of any Demand.
(f) The term "Merger Agreement" shall mean the
Agreement and Plan of Merger, dated as of March 28, 1996, between
MWC Holdings, Inc. and the Company.
(g) The term "Permitted Transferee" shall mean,
with respect to each Person bound by the terms of this Agreement,
(i) any other Stockholder; (ii) in respect of a Stockholder, any
affiliate or associate (as such terms are defined in Rule 405 of
the Securities Act) of such Stockholder or any other Permitted
Transferee of such Affiliate; (iii) the Company; (iv) in the
event of the dissolution, liquidation or winding up of any such
Person that is a corporation or a partnership, the partners of a
partnership that is such Person, the stockholders of a corpora-
tion that is such Person or a successor partnership all of the
partners of which or a successor corporation all of the stock-
holders of which are the Persons who were the partners of such
partnership or the stockholders of such corporation immediately
prior to the dissolution, liquidation or winding up of such
Person; (v) a transferee by testamentary or intestate disposi-
tion; (vi) a transferee by inter vivos transfer to the transfer-
ring Person's spouse, children and/or other lineal descendants;
(vii) a trust transferee by inter vivos transfer, the beneficia-
ries of which are the transferring Person, spouse, children
and/or other lineal descendants; (viii) a successor nominee or
trustee for the beneficial owner of the Shares for which such
Person acts as nominee or trustee, as the case may be; or (ix) an
institutional lender for money borrowed pursuant to a bona fide
pledge of or the granting of a security interest in such
Stockholder's Registrable Securities; provided, however, that
such institutional lender acknowledges in writing that it agrees
to be bound by, and hold the Registrable Securities being pledged
subject to, the terms of this Agreement.
(h) The term "Person" shall mean any individual,
firm, corporation, partnership, limited liability company or
other entity, and shall include any successor (by merger or
otherwise) of such entity.
(i) The term "Public Offering" shall mean a
public offering of equity securities of the Company pursuant to
an effective registration statement under the Securities Act,
including a public offering in which Stockholders are entitled to
sell Shares pursuant to the terms of Article V hereof.
(j) The term "Registrable Securities" shall mean
(i) the Shares owned by each Stockholder on the date hereof, as
set forth opposite each Stockholder's name on Exhibit A hereto,
(ii) additional shares of New Company Common Stock issued to one
or more of the Stockholders upon the exercise of the Warrants,
and (iii) additional shares of New Company Common Stock acquired
by one or more Stockholders after the date hereof. As to any
particular Registrable Securities, such securities shall cease to
be Registrable Securities when (i) a registration statement
registering such securities under the Securities Act has been
declared effective and such securities have been sold or other-
wise transferred by the holder thereof pursuant to such effective
registration statement, or (ii) such securities are sold in
accordance with Rule 144 (or any successor provision) promulgated
under the Securities Act, or (iii) such securities are trans-
ferred under circumstances in which any legend borne by the
certificates for such securities relating to restrictions on
transferability thereof, under the Securities Act or otherwise,
is removed by the Company.
(k) The term "Registration Period" shall mean the
period commencing on the second anniversary of the date hereof
and expiring on the eighth anniversary of this Agreement.
(l) The term "Registration Statement" shall mean
the registration statement filed with the Commission on Form S-4
under the Securities Act for the purpose of registering the
shares of New Company Common Stock (as defined in the Merger
Agreement) and Warrants (as defined in the Merger Agreement)
issued in connection with the Merger (as defined in the Merger
Agreement).
(m) The term "Requisite Amount" shall mean
Registrable Securities having an aggregate Market Value as of the
date of any Demand (as hereinafter defined) of at least $15
million.
(n) The term "Securities Act" shall mean the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
(o) The term "Shares" shall mean the shares of
New Company Common Stock owned by each Stockholder on the date
hereof, as set forth opposite each Stockholder's name on Exhibit
A hereto, and all shares of New Company Common Stock acquired by
any Stockholder after the date of this Agreement, including
without limitation, shares acquired upon exercise of the War-
rants.
(p) The term "Transfer" shall mean any voluntary
or involuntary attempt to, directly or indirectly through the
transfer of interests in controlled Affiliates or otherwise,
offer, sell, assign, transfer, grant a participation in, pledge
or otherwise dispose of any Shares, or the consummation of any
such transactions, or the soliciting of any offers to purchase or
otherwise acquire, or take a pledge of, any of the Shares, other
than hedging or other derivative transactions that hedge or
otherwise relate to investment risks in respect of any of the
Shares; provided, however, that the transfer of an interest in
any of the Stockholders shall not be deemed to be a transfer.
ARTICLE II
Representations and Warranties and Covenants
Section 2.01. Representations and Warranties of the Company.
The Company represents and warrants to each Stockholder
as follows:
(a) Corporate Authority. The Company has full
power and authority to execute, deliver and perform this Agreement;
(b) Due Authorization. This Agreement has been
duly and validly authorized, executed and delivered by the
Company and constitutes a valid and binding obligation of the
Company, enforceable against the Company in accordance with its
terms, except that (i) the enforceability hereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting creditors
rights, (ii) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to certain
equitable defenses and to the discretion of the court before
which any proceedings therefor may be brought, and (iii) the
rights to indemnity hereunder may be limited by federal or state
securities laws or the public policy underlying such laws;
(c) No Conflict. The execution, delivery and
performance of this Agreement by the Company do not violate or
conflict with or constitute a default under (i) the Company s
certificate of incorporation and by-laws, (ii) any judgment,
order or decree or statute, law, ordinance, rule or regulation of
any governmental entity applicable to the Company or (iii) any
material agreement to which it is a party or by which it or its
property is bound;
(d) Registration Rights. Except as provided
herein and for rights granted pursuant to that certain Registra-
tion Rights Agreement, dated March 28, 1996, among the Company,
Varity Corporation, a Delaware corporation, and its wholly owned
subsidiary K-H Corporation, a Delaware corporation, as of the
date hereof, no other party is entitled to any registration or
similar right with respect to any securities of the Company;
(e) Voting Agreements. Except as set forth
herein, the Company is not aware of any voting trust, voting
agreement or arrangement with respect to any of its voting
securities; and
(f) Information in Disclosure Documents and
Registration Statement. None of the information in (i) the
Registration Statement or (ii) the joint proxy state-
ment/prospectus distributed in connection with the meeting of
stockholders of each of MWC Holdings, Inc. ("Holdings") and the
Company to vote upon the Merger (as defined in the Merger Agree-
ment) (the "Proxy Statement"), in the case of the Registration
Statement, at the time it became effective or, in the case of the
Proxy Statement or any amendments thereof or supplements thereto,
at the time of the initial mailing of the Proxy Statement and any
amendments or supplements thereto, and at the time of the meeting
of stockholders of Holdings and the Company held in connection
with the Merger, contained any untrue statement of a material
fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not mis-
leading. The Registration Statement, as of its effective date,
complied as to form in all material respects with the require-
ments of the Securities Act, and the rules and regulations
promulgated thereunder, and as of the date of its initial mailing
and as of the date of the Company's stockholders' meeting, the
Proxy Statement complied as to form in all material respects with
the applicable requirements of the Exchange Act, and the rules
and regulations promulgated thereunder. Notwithstanding the
foregoing, the representations and warranties contained in this
Section 2.01(f) shall not apply to any statements or omissions
made in reliance upon or in conformity with information furnished
in writing to the Company by a Stockholder expressly for use
therein.
Section 2.02 Representations and Warranties of the Stockholders.
Each Stockholder individually represents and warrants
to each other Stockholder and the Company as follows:
(a) Corporate Authority. The Stockholder has
full power and authority to execute, deliver and perform this
Agreement;
(b) Due Authorization. This Agreement has been
duly and validly authorized, executed and delivered by the
Stockholder and constitutes a valid and binding obligation of the
Stockholder, enforceable against the Stockholder in accordance
with its terms, except that (i) the enforceability hereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect affecting credi-
tors rights, (ii) the remedy of specific performance and injunc-
tive and other forms of equitable relief may be subject to
certain equitable defenses and to the discretion of the court
before which any proceedings therefor may be brought, and (iii)
the rights to indemnity and contribution hereunder may be limited
by federal or state securities laws or the public policy underly-
ing such laws; and
(c) No Conflict. The execution, delivery and
performance of this Agreement by the Stockholder do not violate
or conflict with or constitute a default under (i) the Stockhold-
er s organizational documents, (ii) any judgment, order or decree
or statute, law ordinance, rule or regulation of any governmental
entity applicable to the Stockholder, or any material agreement
to which it is a party or by which it or its property is bound.
Section 2.03. Covenants.
The Company covenants to each Stockholder that it will:
(a) Timely file all reports required to be filed
by it under the Exchange Act, and if at any time the Company is
not required to file such reports, it will take such further
action as a Stockholder may reasonably require, including,
without limitation, supply and make publicly available any other
information in the possession of or reasonably obtainable by the
Company, with the purpose of allowing such holder to avail itself
of Rule 144 of the Securities Act or any other rule or regulation
of the SEC allowing it to sell securities without registration
under the Securities Act. Upon the request of any Stockholder,
the Company will deliver to such Stockholder a written statement
as to its compliance with such requirements.
(b) Not repurchase, and shall cause each of its
subsidiaries not to repurchase, any shares of New Company Common
Stock (other than shares of New Company Common Stock repurchased
to fund employee benefit plans) without the written approval of
the holders of at least 82.5% of the Shares outstanding on the
date hereof less any Shares subsequently Transferred other than
to a Person described in clauses (i) or (ii) of the definition of
a Permitted Transferee.
(c) Afford to the Stockholders and their respec-
tive officers, employees, financial advisors, legal counsel,
accountants, consultants and other representatives (except to the
extent not permitted under applicable law as advised by counsel
and except as may be limited by any confidentiality obligations
contained in any contract with a third party) reasonable access
during normal business hours during the term of this Agreement to
all of its books and records and its properties and facilities
and, during such period, shall furnish promptly to each Stock-
holder periodic financial and other information provided to the
Board or to JLL. Unless otherwise required by law, each Stock-
holder agrees that it shall (i) hold in confidence all non-public
information so acquired and (ii) not use any such information as
the basis for any market transaction in the securities of the
Company unless and until such is made generally available to the
public.
(d) Indemnify, to the fullest extent permitted by
law, each Stockholder, its officers, directors, employees,
advisors, affiliates and agents, from and against all losses,
damages and liabilities which arise in connection with any action
or proceeding relating to the Registration Statement or the Proxy
Statement; provided, however, that the Company shall not be
liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue
statement or omission or alleged omission made in the Registra-
tion Statement or the Proxy Statement in reliance upon and in
conformity with written information furnished to the Company by
any Stockholder expressly for use therein.
(e) Not, 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 (in-
cluding entities in which the Company or any of its 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 hereof unless (i) such
Affiliate Transaction is between or among the Company and/or its
subsidiaries; or (ii) the terms of such Affiliate Transaction are
fair and reasonable to the Company or such 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 subsidiary, as the case may be, in a comparable
transaction made on an arm's-length basis between unaffiliated
parties. The foregoing provisions of this Section 2.03(e) will
not apply to (i) any Restricted Payment as defined in the Inden-
ture that is not prohibited by Section 4.13 of the Indenture,
(ii) reasonable and customary fees paid by the Company or its
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.
ARTICLE III
Board of Directors
Section 3.01. Composition.
(a) Members. During the term of this Agreement,
each of JLL, TSG and Nomura will use their best efforts to cause
the Board of Directors of the Company (the "Board") to consist of
nine (9) members, of which: (i) four members shall be designees
of JLL; (ii) one member shall be a designee of TSG; (iii) one
member shall be the Chief Executive Officer of the Company; and
(iv) the other three members shall be determined by the Board;
provided, however, such members determined by the Board shall not
be affiliated with the Company or any of the Stockholders.
During the term of this Agreement, the Company shall use its best
efforts and shall exercise all authority under applicable law to
cause to be elected or appointed, as the case may be, as direc-
tors of the Company a slate of directors consisting of individu-
als meeting the requirements of the previous sentence. Argosy
shall be entitled to appoint a representative who shall be
permitted to attend all meetings of the Board of Directors, but
who shall have no voting power. Such representative shall be
given the same notice of any meeting of the Board of Directors as
is required to be provided to a member of the Board of Directors
and shall be entitled to participate in discussions and consult
with the Board of Directors. Such representative shall receive
all copies of all documents and shall have the same access to
information provided to members of the Board of Directors, in
each case, at the same time as such members of the Board of
Directors. In addition, such representative shall receive the
same compensation or other economic consideration or benefits, if
any, that any member of the Board of Directors designated pursu-
ant to clause (i) or (ii) of this Section 3.01(a) receives.
(b) Failure to Designate. In the event that (i)
a Stockholder entitled to designate a nominee for the Board is
unable to designate such a nominee, or (ii) the designee of a
Stockholder resigns, in either case, due to any legal provision
or restriction relating to such Stockholder, such Stockholder
shall have the right to designate one Person to attend, but not
vote at, any meeting of the Board.
(c) Removal. No Stockholder shall take any
action to cause the removal of any director designated by any
other Stockholder other than "for cause".
(d) Vacancies. If at any time a vacancy is
created on the Board by reason of the death, removal or resigna-
tion (other than pursuant to Section 3.01(b)) of any director who
was nominated and elected as a director pursuant to Section
3.01(a) above or this Section 3.01(d), the Stockholders shall, as
soon as practicable, vote their Shares or act by written consent
with respect to such Shares to elect the individual designated to
fill such vacancy or vacancies by the Stockholder who designated
such former director to fill such vacancy for the unexpired term
of the director whom such individual is replacing.
(e) Decrease in Shares Held. Notwithstanding
anything to the contrary in this Section 3.01, in the event that
any Stockholder entitled pursuant to Section 3.01(a) to desig-
nate one or more individuals for nomination and election to the
Board shall, together with its affiliates or associates (as such
terms are defined in Rule 405 of the Securities Act), cease to
own at least 50% of the Shares owned by such Stockholder on the
date hereof, such Stockholder shall no longer have any right
pursuant to this Agreement to designate any nominees for election
to the Board.
(f) Board Designees. The majority of the direc-
tors then comprising the Board shall have the right to designate
nominees to be elected to the Board for any available director-
ship as to which no Stockholder has the right to designate a
nominee pursuant to Section 3.01(a) hereof.
(g) Voting Agreement. Each of JLL, TSG and
Nomura agrees that, during the term of this Agreement, (i) it
will be present, in person or represented by proxy, at all
stockholder meetings of the Company for the election of direc-
tors, so that all shares of New Company Common Stock, including
the Shares, beneficially owned by it shall be counted for the
purpose of determining the presence of a quorum for the election
of directors at such meetings, and (ii) it shall vote, or act by
consent with respect to, all shares of New Company Common Stock,
including the Shares, beneficially owned by it for the election
of the nominees for the Board nominated by the Board so long as
such nominees consist of individuals meeting the requirements of
this Section 3.01. Except as specifically set forth in this
Section 3.01(g), each of JLL, TSG and Nomura shall be entitled to
vote its Shares on all other matters as it deems fit.
Section 3.02. Indemnification.
Immediately following the Merger, the Company shall
enter into indemnification agreements substantially in the form
of Exhibit B hereto with each member of the Board.
ARTICLE IV
Restrictions on Transfer
Section 4.01. General Restrictions.
(a) No Stockholder may Transfer any Shares prior
to the second anniversary hereof except for Transfers (i) to any
of its Permitted Transferees; provided, however, that prior to
any Transfer of Shares, such Permitted Transferee shall agree in
writing to take such Shares subject to, and to comply with, all
of the provisions of this Agreement, a copy of which agreement
shall be on file with the Secretary of the Company and shall
include the address of such transferee to which notices hereunder
shall be sent, (ii) pursuant to any offer, including a tender or
exchange offer, by any party (including the Company) to purchase
all of the outstanding shares of New Company Common Stock, which
offer has been approved by the Board and (iii) pursuant to any
corporate transaction requiring the approval of the holders of a
majority of the shares of outstanding New Company Common Stock
and as to which the requisite approval of the Stockholders shall
have been obtained.
(b) From and after the second anniversary of the
Merger until the expiration or earlier termination of this
Agreement, in addition to Transfers permitted by Section 4.01(a),
any Stockholder may Transfer any or all of its Shares to any
other Stockholder or any third party, pursuant to: (i) paragraphs
(e) and (f) of Rule 144 or any similar rule adopted by the
Commission (whether or not paragraph (k) of Rule 144 is applica-
ble); (ii) a Public Offering; or (iii) any other Transfer;
provided, however, that prior to any Transfer of Shares to a
third party pursuant to this Section 4.01(b)(iii), such third-
party transferee shall agree in writing to take such Shares
subject to, and to comply with, the provisions of Section 3.01(g)
of this Agreement. Notwithstanding anything stated herein to the
contrary, the Transfer of Shares by either JLL or TSG shall not
result in the assignment of such transferring Stockholder's
rights under Section 3.01(a) hereof.
Section 4.02. Compliance with Securities Laws.
Each Stockholder agrees that every Transfer of its
Shares shall comply with all federal and state securities laws
applicable to such transaction. At the request of the Company,
the transferring Stockholder shall deliver to the Company an
opinion of counsel, which counsel and opinion shall be reasonably
satisfactory to the Company, to the effect that the sale, trans-
fer or other disposition satisfies this Section 4.02.
Section 4.03. Transfers Not In Compliance.
In the event of any purported or attempted Transfer of
Shares by a Stockholder that does not comply with this Agreement,
the purported transferee or successor by operation of law shall
not be deemed to be a stockholder of the Company for any purpose
and shall not be entitled to any of the rights of a stockholder,
including, without limitation, the right to vote the Shares or to
receive a certificate for the Shares or any dividends or other
distributions on or with respect to the Shares.
Section 4.04. Tag-Along Rights.
Except as provided below, if, at any time during the
term of this Agreement, JLL proposes to directly or indirectly
Transfer its Shares to a Person (other than transfers to (a)
persons or entities described in clauses (ii) or (iv) of the
definition of Permitted Transferee or (b) pursuant to a Public
Offering), JLL shall provide the remaining Stockholders (each a
"Notice Recipient") and the Company with not less than twenty
(20) days' prior written notice of such proposed sale, which
notice shall include all of the terms and conditions of such
proposed sale and which shall identify such purchaser (the "Sale
Notice"); Each Notice Recipient shall have the option, exercis-
able by written notice to JLL within ten (10) days after the
receipt of the Sale Notice, to require JLL to arrange for such
purchaser or purchasers to purchase the same percentage (the
"Percentage") of the Shares then owned by such Notice Recipient
as the ratio of the total number of Shares which are to be sold
by JLL pursuant to the proposed sale to the total number of
Shares owned by JLL immediately prior to such Transfer, or any
lesser amount of Shares as such Notice Recipient shall desire,
together with JLL's Shares at the same time as, and upon the same
terms and conditions (including all direct or indirect consider-
ation or compensation) at which, JLL sells its Shares; provided
that such terms and conditions shall (i) not include a covenant
not to compete or (ii) provide for indemnity or contribution in
excess of such Notice Recipient's proceeds from such sale. If a
Notice Recipient shall so elect, JLL agrees that it shall either
(a) arrange for the proposed purchaser or purchasers to purchase
all or a portion (as such Notice Recipient shall specify) of the
same Percentage of the Shares then owned by such Notice Recipi-
ent at the same time as and upon the same terms and conditions at
which JLL sells its Shares (it being understood that in the event
such Notice Recipient's Shares require exercise, conversion or
exchange to effect such sale, such exercise, conversion or
exchange may be made simultaneously with the closing of such
sale), and provided that if such purchaser or purchasers shall
elect to purchase only such aggregate number of Shares as origi-
nally agreed with JLL, then the number of Shares to be sold by
JLL and all Notice Recipients electing to participate in the
proposed sale shall be reduced pro rata to such aggregate number,
or (b) not effect the proposed sale to such purchaser or purchas-
ers. In the event that a Notice Recipient does not exercise its
right to participate in such sale or declines to so participate,
JLL shall have 120 days from the date of such Sale Notice to
consummate the transaction on the terms set forth therein without
being required to provide an additional Sale Notice to the
remaining Stockholders. Notwithstanding the foregoing, JLL
shall not be obligated to provide any rights pursuant to this
Section 4.04 unless and until JLL has previously Transferred an
aggregate of at least 482,000 of its Shares.
Section 4.05 Restrictions on New Company Common Stock Acquired
After the Date Hereof.
No Stockholder or any of its controlled or commonly
controlled Affiliates may acquire additional shares of New
Company Common Stock if, as a result of any such acquisition,
such Stockholder's ownership (together with the ownership of any
of its controlled or commonly controlled Affiliates) would be in
excess of 50% of the then outstanding shares of New Company
Common Stock. Shares of New Company Common Stock acquired by any
Stockholder after the date of this Agreement shall be treated the
same as, and shall be subject to the same restrictions as, Shares
held by such Stockholder as of the date of this Agreement for
purposes of this Agreement.
ARTICLE V
Registration Rights
Section 5.01. Demand Registrations.
(a) Requests for Registration. During the
Registration Period, Stockholders holding the Requisite Amount of
Registrable Securities shall be entitled to make a written
request of the Company (a "Demand") for registration under the
Securities Act of all or part of the Registrable Securities (a
"Demand Registration"). Such Demand shall specify: (i) the
aggregate number of Registrable Securities requested to be
registered, (ii) the intended method of distribution in connec-
tion with such Demand Registration to the extent then known and
(iii) the identity of the Stockholder or Stockholders (each, a
"Demanding holder") requesting such Demand. Within ten (10) days
after receipt of a Demand, the Company shall give written notice
of such Demand to all other Stockholders and shall include in
such registration all Registrable Securities with respect to
which the Company has received a written request for inclusion
therein within twenty (20) days after the receipt by such Stock-
holder of the Company's notice required by this paragraph.
(b) Number of Demands. Each of JLL, TSG, Argosy,
Chase and Nomura shall be entitled to two (2) Demand Registra-
tions; provided, however, that each Stockholder who is identified
as a Demanding holder shall be deemed to have made a demand with
respect to such Demand Registration.
(c) Satisfaction of Obligations. A registration
shall not be treated as a permitted Demand for a Demand Registra-
tion until (i) the applicable registration statement under the
Securities Act has been filed with the Commission with respect to
such Demand Registration (which shall include any registration
statement that is not withdrawn by holders of Registrable Securi-
ties in the circumstances contemplated by Section 5.03), and (ii)
such registration statement shall have been maintained continu-
ously effective for a period of at least ninety (90) days or such
shorter period as all Registrable Securities included therein
have been disposed of thereunder in accordance with the manner of
distribution set forth in such registration statement.
(d) Availability of Short Form Registrations.
The Company shall use its best efforts to comply with the re-
quirements for use of short form registration for the sale of
securities under the Securities Act.
(e) Restrictions on Demand Registrations. The
Company shall not be obligated (i) in the case of a Demand
Registration, to maintain the effectiveness of a registration
statement under the Securities Act, for a period longer than
ninety (90) days or (ii) to effect any Demand Registration within
one hundred eighty (180) days after the effective date of (A) a
"firm commitment" underwritten registration in which all Stock-
holders were given "piggyback" rights pursuant to Section 5.02
hereof (provided that, with respect to such a registration in
which such piggyback rights were exercised, each such Stockholder
exercising such piggyback rights was permitted to include in such
registration at least 75% of the Registrable Securities that such
Stockholder sought to include therein) or (B) any other Demand
Registration. In addition, the Company shall be entitled to
postpone (upon written notice to all Stockholders) for up to
ninety (90) days the filing or the effectiveness of a registra-
tion statement in respect of a Demand (but no more than once in
any period of twelve (12) consecutive months) if the Board
determines in good faith and in its reasonable judgment that
effecting the Demand Registration in respect of such Demand would
have a material adverse affect on any proposal or plan by the
Company to engage in any debt or equity offering, material
acquisition or disposition of assets (other than in the ordinary
course of business) or any merger, consolidation, tender offer or
other similar transaction. In the event of a postponement by the
Company of the filing or effectiveness of a registration state-
ment in respect of a Demand, the Demanding holders shall have the
right to withdraw such Demand in accordance with Section 5.03
hereof.
(f) Participation in Demand Registrations. The
Company shall not include any securities other than Registrable
Securities in a Demand Registration, except with the written
consent of the holders of the majority of the Registrable Securi-
ties sought to be registered pursuant to such Demand Registration
held by all the Demanding holders. If, in connection with a
Demand Registration, any managing underwriter (or, if such Demand
Registration is not an underwritten offering, a nationally
recognized independent underwriter selected by the Demanding
holders of a majority of the Registrable Securities held by all
the Demanding holders (which such underwriter shall be reasonably
acceptable to the Company and whose fees and expenses shall be
borne solely by the Company)) advises the Company and the Demand-
ing holders of a majority of the Registrable Securities held by
all the Demanding holders that, in its opinion, the inclusion of
all the Registrable Securities and, if authorized pursuant to
this paragraph, other securities of the Company, in each case,
sought to be registered in connection with such Demand Registra-
tion would adversely affect the marketability of the Registrable
Securities sought to be sold pursuant thereto, then the Company
shall include in the registration statement applicable to such
Demand Registration only such securities as the Company and the
holders of Registrable Securities sought to be registered therein
("Demanding Sellers") are advised by such underwriter can be sold
without such an effect (the "Maximum Demand Number"), as follows
and in the following order of priority:
(i) first, the number of Registrable Securi-
ties received pursuant to the Merger (excluding, for these
purposes, Registrable Securities issued upon exercise of Warrants
received pursuant to the Merger) sought to be registered by each
Demanding Seller, pro rata in proportion to the number of Regis-
trable Securities received pursuant to the Merger sought to be
registered by all Demanding Sellers; and
(ii) second, if the number of Registrable
Securities to be included under clause (i) above is less than the
Maximum Demand Number, the number of Registrable Securities
received other than pursuant to the Merger (including, for these
purposes, Registrable Securities issued upon exercise of Warrants
received pursuant to the Merger) sought to be registered by each
Demanding Seller, pro rata in proportion to the number of Regis-
trable Securities not received pursuant to the Merger sought to
be registered by all Demanding Sellers; and
(iii) third, if the number of Regis-
trable Securities to be included under clauses (i) and (ii) above is
less than the Maximum Demand Number, the number of securities sought to
be included by each other seller, pro rata in proportion to the
number of securities sought to be sold by all such other sellers,
which in the aggregate, when added to the number of securities to
be included pursuant to clauses (i) and (ii) above, equals the
Maximum Demand Number.
(g) Selection of Underwriters. If the Demanding
holders of a majority of the Registrable Securities held by all
the Demanding holders request that such Demand Registration be an
underwritten offering, then such holders shall select a national-
ly recognized underwriter or underwriters to manage and adminis-
ter such offering, such underwriter or underwriters, as the case
may be, to be subject to the approval of the Company's Board of
Directors, which approval shall not be unreasonably withheld or
delayed.
(h) Other Registrations. If the Company has
received a Demand and if the applicable registration statement in
respect of such Demand has not been withdrawn or abandoned, the
Company will not file or cause to be effected any other registra-
tion of any of its equity securities or securities convertible or
exchangeable into or exercisable for its equity securities under
the Securities Act (other than a registration relating to the
Company employee benefit plans, exchange offers by the Company or
a merger or acquisition of a business or assets by the Company,
including, without limitation, a registration on Form S-4 or S-8
or any successor form), whether on its own behalf or at the
request of any holder or holders of such securities, until a
period of at least ninety (90) days has elapsed from the effec-
tive date of any Demand Registration, unless a shorter period of
time is approved by the Demanding holders of a majority of the
Registrable Securities held by all the Demanding holders.
Notwithstanding the foregoing, the Company shall be entitled to
postpone any such Demand Registration and may file or cause to be
effected such other registration in accordance with the terms of
Section 5.01(e) hereof.
Section 5.02 Piggyback Registrations.
(a) Right to Piggyback. During the Registration
Period, whenever the Company proposes to register any of its
equity securities or securities convertible or exchangeable into
or exercisable for its equity securities under the Securities Act
(other than a registration relating to the Company employee
benefit plans, exchange offers by the Company or a merger or
acquisition of a business or assets by the Company including,
without limitation, a registration on Form S-4 or Form S-8 or any
successor form) (a "Piggyback Registration"), the Company shall
give all Stockholders prompt written notice thereof (but not less
than ten (10) days prior to the filing by the Company with the
Commission of any registration statement with respect thereto).
Such notice (a "Piggyback Notice") shall specify, at a minimum,
the number of securities proposed to be registered, the proposed
date of filing of such registration statement with the Commis-
sion, the proposed means of distribution, the proposed managing
underwriter or underwriters (if any and if known), and a good
faith estimate by the Company of the proposed minimum offering
price of such securities. Upon the written request of a Stock-
holder given within ten (10) business days of such Stockholder's
receipt of the Piggyback Notice (which written request shall
specify the number of Registrable Securities intended to be
disposed of by such Stockholder and the intended method of
distribution thereof), the Company shall include in such regis-
tration all Registrable Securities with respect to which the
Company has received such written requests for inclusion.
(b) Priority on Piggyback Registrations. If, in
connection with a Piggyback Registration, any managing underwrit-
er (or, if such Piggyback Registration is not an underwritten
offering, a nationally recognized independent underwriter select-
ed by the Company (reasonably acceptable to the holders of a
majority of the Registrable Securities sought to be included in
such Piggyback Registration and whose fees and expenses shall be
borne solely by the Company)) advises the Company and the holders
of the Registrable Securities to be included in such Piggyback
Registration, that, in its opinion, the inclusion of all the
securities sought to be included in such Piggyback Registration
by the Company, any Persons who have sought to have shares
registered thereunder pursuant to rights to demand (other than
pursuant to so-called "piggyback" or other incidental or partici-
pation registration rights) such registration (such demand rights
being "Other Demand Rights" and such Persons being "Other Demand-
ing Sellers"), any holders of Registrable Securities seeking to
sell such securities in such Piggyback Registration ("Piggyback
Sellers") and any other proposed sellers, in each case, if any,
would adversely affect the marketability of the securities sought
to be sold pursuant thereto, then the Company shall include in
the registration statement applicable to such Piggyback Registra-
tion only such securities as the Company, the Other Demanding
Sellers, and the Piggyback Sellers are so advised by such under-
writer can be sold without such an effect (the "Maximum Piggyback
Number"), as follows and in the following order of priority:
(i) if the Piggyback Registration is an
offering on behalf of the Company and not any Person
exercising Other Demand Rights (whether or not other
Persons seek to include securities therein pursuant to
so-called "piggyback" or other incidental or participa-
tory registration rights) (a "Primary Offering"), then
(A) first, such number of securities to be sold by the
Company as the Company, in its reasonable judgment and
acting in good faith and in accordance with sound
financial practice, shall have determined, (B) second,
if the number of securities to be included under clause
(A) above is less than the Maximum Piggyback Number,
the number of Registrable Securities received pursuant
to the Merger (excluding, for these purposes, Registra-
ble Securities issued upon exercise of Warrants re-
ceived pursuant to the Merger) sought to be registered
by each Piggyback Seller, pro rata in proportion to the
number of Registrable Securities received pursuant to
the Merger sought to be registered by all the Piggyback
Sellers, (C) third, if the number of securities to be
included under clauses (A) and (B) above is less than
the Maximum Piggyback Number the number of Registrable
Securities received other than pursuant to the Merger
(including, for these purposes, Registrable Securities
issued upon exercise of Warrants received pursuant to
the Merger) sought to be registered by each Piggyback
Seller, pro rata in proportion to the Registrable
Securities not received in the Merger sought to be
registered by all the Piggyback Sellers and all other
proposed sellers, which in the aggregate, when added to
the number of securities to be registered under clauses
(A) and (B) above, equals the Maximum Piggyback Number;
(ii) if the Piggyback Registration is an
offering other than pursuant to a Primary Offering,
then (A) first, such number of securities sought to be
registered by each Other Demanding Seller, pro rata in
proportion to the number of securities sought to be
registered by all such Other Demanding Sellers, (B)
second, if the number of securities to be included
under clause (A) above is less than the Maximum Piggy-
back Number, the number of Registrable Securities
received pursuant to the Merger (excluding, for these
purposes, Registrable Securities issued upon exercise
of Warrants received pursuant to the Merger) sought to
be registered by each Piggyback Seller, pro rata in
proportion to the number of Registrable Securities
received pursuant to the Merger sought to be registered
by all the Piggyback Sellers, (C) third, if the number
of securities to be included under clauses (A) and (B)
above is less than the Maximum Piggyback Number, the
number of Registrable Securities received other than
pursuant to the Merger (including, for these purposes,
Registrable Securities issued upon exercise of Warrants
received pursuant to the Merger) sought to be regis-
tered by each Piggyback Seller, pro rata in proportion
to the Registrable Securities received other than
pursuant to the Merger sought to be registered by all
the Piggyback Sellers and all other proposed sellers,
which in the aggregate, when added to the number of
securities to be registered under clauses (A) and (B)
above, equals the Maximum Piggyback Number.
(c) Withdrawal by the Company. If, at any time
after giving written notice of its intention to register any of
its securities as set forth in Section 5.02 and prior to time the
registration statement filed in connection with such registration
is declared effective, the Company shall determine for any reason
not to register such securities, the Company may, at its elec-
tion, give written notice of such determination to each Stock-
holder and thereupon shall be relieved of its obligation to
register any Registrable Securities in connection with such
particular withdrawn or abandoned registration (but not from its
obligation to pay the Registration Expenses in connection there-
with as provided herein). In the event that the Piggyback
Sellers of such a registration hold the Requisite Amount of
Registrable Securities, such holders may continue the registra-
tion as a Demand Registration. The continuation of such regis-
tration shall be counted as a Demand for all Stockholders who
continue as participants in such registration.
Section 5.03. Withdrawal Rights.
Any Stockholder having notified or directed the
Company to include any or all of its Registrable Securities in a
registration statement under the Securities Act shall have the
right to withdraw any such notice or direction with respect to
any or all of the Registrable Securities designated for registra-
tion thereby by giving written notice to such effect to the
Company prior to the effective date of such registration state-
ment. In the event of any such withdrawal, the Company shall not
include such Registrable Securities in the applicable registra-
tion and such Registrable Securities shall continue to be Regis-
trable Securities hereunder. No such withdrawal shall affect the
obligations of the Company with respect to the Registrable
Securities not so withdrawn; provided that in the case of a
Demand Registration, if such withdrawal shall reduce the number
of Registrable Securities sought to be included in such registra-
tion below the Requisite Amount, then the Company shall as
promptly as practicable give each holder of Registrable Securi-
ties sought to be registered notice to such effect, referring to
this Agreement and summarizing this Section 5.03, and within five
(5) business days following the effectiveness of such notice,
either the Company or the holders of a majority of the Registra-
ble Securities sought to be registered may, by written notices
made to each holder of Registrable Securities sought to be
registered and the Company, respectively, elect that such regis-
tration statement not be filed or, if theretofore filed, be
withdrawn. During such five (5) business day period, the Company
shall not file such registration statement if not theretofore
filed or, if such registration statement has been theretofore
filed, the Company shall not seek, and shall use its best efforts
to prevent, the effectiveness thereof. Any registration state-
ment withdrawn or not filed (i) in accordance with an election by
the Company, (ii) in accordance with an election by the holders
of the majority of the Registrable Securities sought to be
registered pursuant to such Demand Registration held by all the
Demanding holders pursuant to Section 5.01(e) hereof, (iii) in
accordance with an election by the holders of the majority of the
Registrable Securities sought to be registered pursuant to such
Demand Registration held by all the Demanding holders prior to
the effectiveness of the applicable Demand Registration Statement
or (iv) in accordance with an election by the holders of the
majority of the Registrable Securities sought to be registered
pursuant to such Demand Registration held by all the Demanding
holders subsequent to the effectiveness of the applicable Demand
Registration Statement, if any post-effective amendment or
supplement to the applicable Demand Registration Statement
contains adverse information regarding the Company shall not be
counted as a Demand. Except as set forth in clause (iv) of the
previous sentence any Demand withdrawn in accordance with an
election by the Demanding holders subsequent to the effectiveness
of the applicable Demand Registration Statement shall be counted
as a Demand unless the Stockholders reimburse the Company for
its reasonable out-of-pocket expenses (but, without implication
that the contrary would otherwise be true, not including any
Internal Expenses, as defined below) related to the preparation
and filing of such registration statement (in which event such
registration statement shall not be counted as a Demand hereun-
der). Upon the written request of a majority of the Stockhold-
ers, the Company shall promptly prepare a definitive statement of
such out-of-pocket expenses in connection with such registration
statement in order to assist such holders with a determination in
accordance with the next preceding sentence.
Section 5.04. Holdback Agreements.
Each Stockholder agrees not to effect any public
sale or distribution (including sales pursuant to Rule 144) of
equity securities of the Company, or any securities convertible
into or exchangeable or exercisable for such securities, during
the ten (10) day period prior to the date which the Company has,
or in the case of a Demand Registration, the Demanding holders
have, notified the Stockholders that it or they intend to com-
mence a Public Offering through the sixty (60) day period immedi-
ately following the effective date of any Demand Registration or
any Piggyback Registration (in each case, except as part of such
registration), or, in each case, if later, the date of any
underwriting agreement with respect thereto; provided, however,
that the Stockholders shall not be obligated to comply with this
Section 5.04 on more than one (1) occasion in any nine (9) month
period. The holders of 82.5% of the Registrable Securities
included in a Demand Registration may waive the limitation
contained in this paragraph with respect to such Demand Registra-
tion.
Section 5.05. Registration Procedures.
(a) Whenever the Stockholders have requested that
any Registrable Securities be registered pursuant to this Agree-
ment (whether pursuant to Demand Registration or Piggyback
Registration), the Company (subject to its right to withdraw such
registration as contemplated by Section 5.02(c)) shall use its
best efforts to effect the registration and the sale of such
Registrable Securities in accordance with the intended method of
disposition thereof and, in connection therewith, the Company
shall as expeditiously as possible:
(i) prepare and file with the Commission a
registration statement with respect to such Registrable Securi-
ties on any form for which the Company then qualifies and is
available for the sale of Registrable Securities to be registered
thereunder in accordance with the intended method of distribution
and use its best efforts to cause such registration statement to
become effective within ninety (90) days of the date hereof;
(ii) prepare and file with the Commission
such amendments and supplements to such registration statement
and the prospectus used in connection therewith as may be neces-
sary to keep such registration statement effective for a continu-
ous period of not less than ninety (90) days (or, if earlier,
until all Registrable Securities included in such registration
statement have been sold thereunder in accordance with the manner
of distribution set forth therein) and comply with the provisions
of the Securities Act with respect to the disposition of all
securities covered by such registration statement during such
period in accordance with the intended methods of disposition by
the sellers thereof as set forth in such registration statement
(including, without limitation, by incorporating in a prospectus
supplement or post-effective amendment, at the request of a
seller of Registrable Securities, the terms of the sale of such
Registrable Securities);
(iii) before filing with the Commission
any such registration statement or prospectus or any amendments
or supplements thereto, the Company shall furnish to counsel
selected by the Demanding holders of a majority of the Registra-
ble Securities held by the Demanding holders, counsel for the
underwriter or sales or placement agent, if any, and any other
counsel for holders of Registrable Securities, if any, in connec-
tion therewith, drafts of all such documents proposed to be filed
and provide such counsel with a reasonable opportunity for review
thereof and comment thereon, such review to be conducted and such
comments to be delivered with reasonable promptness;
(iv) promptly (i) notify each seller of
Registrable Securities of each of (x) the filing and effective-
ness of the registration statement and prospectus and any amend-
ment or supplements thereto, (y) the receipt of any comments from
the Commission or any state securities law authorities or any
other governmental authorities with respect to any such registra-
tion statement or prospectus or any amendments or supplements
thereto, and (z) any oral or written stop order with respect to
such registration, any suspension of the registration or qualifi-
cation of the sale of such Registrable Securities in any juris-
diction or any initiation or threatening of any proceedings with
respect to any of the foregoing and (ii) use its best efforts to
obtain the withdrawal of any order suspending the registration or
qualification (or the effectiveness thereof) or suspending or
preventing the use of any related prospectus in any jurisdiction
with respect thereto;
(v) furnish to each seller of Registrable
Securities, the underwriters and the sales or placement agent, if
any, and counsel for each of the foregoing, a conformed copy of
such registration statement and each amendment and supplement
thereto (in each case, including all exhibits thereto and docu-
ments incorporated by reference therein) and such additional
number of copies of such registration statement, each amendment
and supplement thereto (in such case without such exhibits and
documents) the prospectus (including each preliminary prospectus)
included in such registration statement and prospectus supple-
ments and all exhibits thereto and documents incorporated by
reference therein and such other documents as such seller,
underwriter, agent or counsel may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by
such Seller;
(vi) if requested by the managing underwriter
or underwriters of any registration or by the Demanding holders
of a majority of the Registrable Securities held by the Demanding
holders, subject to approval of counsel to the Company in its
reasonable judgment, promptly incorporate in a prospectus,
supplement or post-effective amendment to the registration
statement such information concerning underwriters and the plan
of distribution of the Registrable Securities as such managing
underwriter or underwriters or such holders reasonably shall
furnish to the Company in writing and request be included there-
in, including, without limitation, with respect to the number of
Registrable Securities being sold by such holders to such under-
writer or underwriters, the purchase price being paid therefor by
such underwriter or underwriters and with respect to any other
terms of the underwritten offering of the Registrable Securities
to be sold in such offering; and make all required filings of
such prospectus, supplement or post-effective amendment as soon
as possible after being notified of the matters to be incorporat-
ed in such prospectus, supplement or post-effective amendment;
(vii) use its best efforts to register or
qualify such Registrable Securities under such securities or
"blue sky" laws of such jurisdictions as the holders of a majori-
ty of Registrable Securities sought to be registered reasonably
request and do any and all other acts and things which may be
reasonably necessary or advisable to enable the holders of a
majority of Registrable Securities sought to be registered to
consummate the disposition in such jurisdictions of the Registra-
ble Securities owned by such holders and keep such registration
or qualification in effect for so long as the registration
statement remains effective under the Securities Act (provided
that the Company shall not be required to (x) qualify generally
to do business in any jurisdiction where it would not otherwise
be required to qualify but for this paragraph, (y) subject itself
to taxation in any such jurisdiction where it would not otherwise
be subject to taxation but for this paragraph or (z) consent to
the general service of process in any jurisdiction where it would
not otherwise be subject to general service of process but for
this paragraph);
(viii) notify each seller of such Regis-
trable Securities, at any time when a prospectus relating thereto
is required to be delivered under the Securities Act, upon the
discovery that, or of the happening of any event as a result of
which, the registration statement covering such Registrable
Securities, as then in effect, contains an untrue statement of a
material fact or omits to state any material fact required to be
stated therein or any fact necessary to make the statements
therein not misleading, and promptly prepare and furnish to each
such seller a supplement or amendment to the prospectus contained
in such registration statement so that such Registration State-
ment shall not, and such prospectus as thereafter delivered to
the purchasers of such Registrable Securities shall not, contain
an untrue statement of a material fact or omit to state any material
fact required to be stated therein or any fact necessary to make
the statements therein not misleading;
(ix) cause all such Registrable Securities to
be listed on the New York Stock Exchange and/or any other securi-
ties exchange and included in each established over-the-counter
market on which or through which similar securities of the
Company are listed or traded and, if not so listed or traded, to
be listed on the NASD automated quotation system ("Nasdaq") and
if listed on Nasdaq, use its reasonable efforts to secure desig-
nation of all such Registrable Securities covered by such regis-
tration statement as a Nasdaq "national market system security"
within the meaning of Rule 11Aa2-1 under the Securities Exchange
Act of 1934, as amended, or, failing that, to secure Nasdaq
authorization for such Registrable Securities;
(x) make available for inspection by any
seller of Registrable Securities, any underwriter participating
in any disposition pursuant to such registration statement, and
any attorney, accountant or other agent retained by any such
seller or underwriter all financial and other records, pertinent
corporate documents and properties of the Company, and cause the
Company's officers, directors, employees, attorneys and indepen-
dent accountants to supply all information reasonably requested
by any such sellers, underwriters, attorneys, accountants or
agents in connection with such registration statement. Informa-
tion which the Company determines, in good faith, to be confiden-
tial shall not be disclosed by such persons unless (x) the
disclosure of such information is necessary to avoid or correct a
misstatement or omission in such registration statement, or (y)
the release of such information is ordered pursuant to a subpoena
or other order from a court of competent jurisdiction. Each
seller of Registrable Securities agrees, on its own behalf and on
behalf of all its underwriters, accountants, attorneys and
agents, that the 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 unless and until such is made generally available to
the public. Each seller of Registrable Securities further
agrees, on its own behalf and on behalf of all its underwriters,
accountants, attorneys and agents, that it will, upon learning
that disclosure of such information is sought in a court of
competent jurisdiction, give notice to the Company and allow the
Company, at its expense, to undertake appropriate action to
prevent disclosure of the information deemed confidential;
(xi) use its best efforts to comply with all
applicable laws related to such registration statement and
offering and sale of securities and all applicable rules and
regulations of governmental authorities in connection therewith
(including, without limitation, the Securities Act and the
Exchange Act) and make generally available to its security
holders as soon as practicable (but in any event not later than
fifteen (15) months after the effectiveness of such registration
statement) an earnings statement of the Company and its subsid-
iaries complying with Section 11(a) of the Securities Act;
(xii) permit any Stockholder, which
Stockholder, in its sole and exclusive judgment, might be deemed
to be an underwriter or controlling person of the Company, to
participate in the preparation of such registration statement and
to require the insertion therein of material, furnished to the
Company in writing, which in the reasonable judgment of such
holder and such holder's counsel should be included;
(xiii) use reasonable best efforts to
furnish to each seller of Registrable Securities a signed coun-
terpart of (x) an opinion of counsel for the Company and (y) a
"comfort" letter signed by the independent public accountants who
have certified the Company's financial statements included or
incorporated by reference in such registration statement, cover-
ing such matters with respect to such registration statement and,
in the case of the accountants' comfort letter, with respect to
events subsequent to the date of such financial statements, as
are customarily covered in opinions of issuer's counsel and in
accountants' comfort letters delivered to the underwriters in
underwritten public offerings of securities for the account of,
or on behalf of, an issuer of common stock, such opinion and
comfort letters to be dated the date of such opinions and comfort
letters are customarily dated in such transactions, and covering
in the case of such legal opinion, such other legal matters and,
in the case of such comfort letter, such other financial matters,
as the holders of a majority of the Registrable Securities being
sold may reasonably request;
(xiv) take all such other actions as the
holders of a majority of the Registrable Securities being sold or
the underwriters, if any, reasonably request in order to expedite
or facilitate the disposition of such Registrable Securities; and
(xv) the Company shall use its best reason-
able efforts so that in lieu of exercising any Warrant prior to
or simultaneously with the filing or the effectiveness of any
registration statement filed pursuant to this Article V, the
holder of such Warrant may sell such Warrant to the underwriter
of the offering being registered upon the undertaking of such
underwriter to exercise such Warrant before making any distribu-
tion pursuant to such registration statement and to include the
Common Stock issued upon such conversion among the securities
being offered pursuant to such registration statement. The
Company agrees to cause such Common Stock to be included among
the securities being offered pursuant to such registration
statement to be issued within such time as will permit the
underwriter to make and complete the distribution contemplated by
the underwriting.
(b) Underwriting. Without limiting any of the
foregoing, in the event that the offering of Registrable Securi-
ties is to be made by or through an underwriter, the Company
shall enter into an underwriting agreement with a managing
underwriter or underwriters containing representations, warran-
ties, indemnities and agreements customarily included (but not
inconsistent with the agreements contained herein) by an issuer
of common stock in underwriting agreements with respect to
offerings of common stock for the account of, or on behalf of,
such issuers. In connection with the sale of Registrable Securi-
ties hereunder, any seller of such Registrable Securities may, at
its option, require that any and all representations and warran-
ties by, and indemnities and agreements of, the Company to or for
the benefit of such underwriter or underwriters (or which would
be made to or for the benefit of such an underwriter or under-
writer if such sale of Registrable Securities were pursuant to a
customary underwritten offering) be made to and for the benefit
of such seller and that any or all of the conditions precedent to
the obligations of such underwriter or underwriters (or which
would be so for the benefit of such underwriter or underwriters
under a customary underwriting agreement) be conditions precedent
to the obligations of such seller in connection with the disposi-
tion of its securities pursuant to the terms hereof (it being
agreed that in connection with any Demand Registration, without
limiting any rights or remedies of the Stockholders, in the event
any such condition precedent shall not be satisfied and, if not
so satisfied, shall not be waived by the holders of a majority of
the Registerable Securities to be included in such Demand Regis-
tration, such Demand Registration shall not be counted as a
permitted Demand hereunder). In connection with any offering of
Registrable Securities registered pursuant to this Agreement, the
Company shall (x) furnish to the underwriter, if any (or, if no
underwriter, the sellers of such Registrable Securities),
unlegended certificates representing ownership of the Registrable
Securities being sold, in such denominations as requested and (y)
instruct any transfer agent and registrar of the Registrable
Securities to release any stop transfer order with respect
thereto.
(c) Return of Prospectuses. Each seller of
Registrable Securities hereunder agrees that upon receipt of any
notice from the Company of the happening of any event of the kind
described in Section 5.05(a)(viii), such seller shall forthwith
discontinue such seller's disposition of Registrable Securities
pursuant to the applicable registration statement and prospectus
relating thereto until such seller's receipt of the copies of the
supplemented or amended prospectus contemplated by Section
5.05(a)(viii) and, if so directed by the Company, deliver to the
Company all copies, other than permanent file copies, then in
such seller's possession of the prospectus current at the time of
receipt of such notice relating to such Registrable Securities.
In the event the Company shall give such notice, the ninety (90)-
day period during which such registration statement must remain
effective pursuant to this Agreement shall be extended by the
number of days during the period from the date of giving of a
notice regarding the happening of an event of the kind described
in Section 5.05(a)(viii) to the date when all such sellers shall
receive such a supplemented or amended prospectus and such
prospectus shall have been filed with the Commission.
Section 5.06. Registration Expenses.
All expenses incident to the Company's performance of,
or compliance with, its obligations under this Agreement includ-
ing, without limitation, all registration and filing fees, all
fees and expenses of compliance with securities and "blue sky"
laws (including, without limitation, the fees and expenses of
counsel for underwriters or placement or sales agents in connec-
tion therewith), all printing and copying expenses, all messenger
and delivery expenses, all fees and expenses of underwriters and
sales and placement agents in connection therewith (excluding
discounts and commissions and the fees and expenses of counsel
therefor), all fees and expenses of the Company's independent
certified public accountants and counsel (including, without
limitation, with respect to "comfort" letters and opinions)
(collectively, the "Registration Expenses") shall be borne by the
Company; provided, however, that in the case of a Piggyback
Registration, all incremental costs resulting from applicable
federal and blue sky registration and filing fees, National
Association of Securities Dealers filing fees, the expenses and
fees for listing the securities to be registered on each securi-
ties exchange and included in each established over-the-counter
market on which similar securities issued by the Company are then
listed or traded or for listing on Nasdaq and underwriting
discounts and commissions allocable to each Stockholder selling
Registrable Securities shall be borne by such Stockholder. The
Company shall be responsible for the fees and expenses of one (1)
legal counsel retained by all of the Stockholders in the aggre-
gate in connection with the sale of Registrable Securities.
Notwithstanding the foregoing, the Company shall not be responsi-
ble for the fees and expenses of any additional counsel, or any
of the accountants, agents or experts retained by the Stockhold-
ers in connection with the sale of Registrable Securities. The
Company will pay its internal expenses (including, without
limitation, all salaries and expenses of its officers and employ-
ees performing legal or accounting duties, the expense of any
annual audit and the expense of any liability insurance) (collec-
tively, "Internal Expenses") and the expenses and fees for
listing the securities to be registered on each securities
exchange and included in each established over-the-counter market
on which similar securities issued by the Company are then listed
or traded or for listing on Nasdaq.
Section 5.07. Indemnification.
(a) By the Company. The Company agrees to
indemnify, to the fullest extent permitted by law, each holder of
Registrable Securities being sold, its officers, directors,
employees and agents and each Person who controls (within the
meaning of the Securities Act) such holder or such an other
indemnified Person against all losses, claims, damages, liabili-
ties and expenses (collectively, the "Losses") caused by, result-
ing from or relating to any untrue or alleged untrue statement of
material fact contained in any registration statement, prospectus
or preliminary prospectus or any amendment thereof or supplement
thereto or any omission or alleged omission of a material fact
required to be stated therein or a fact necessary to make the
statements therein not misleading, except insofar as the same are
caused by or contained in any information furnished to the
Company by such holder expressly for use therein or by such
holder's failure to deliver a copy of the registration statement
or prospectus or any amendments or supplements thereto after the
Company has furnished such holder with a sufficient number of
copies of the same. In connection with an underwritten offering
and without limiting any of the Company's other obligations under
this Agreement, the Company shall indemnify such underwriters,
their officers, directors, employees and agents and each Person
who controls (within the meaning of the Securities Act) such
underwriters or such an other indemnified Person to the same
extent as provided above with respect to the indemnification of
the holders of Registrable Securities being sold.
(b) By Stockholders. In connection with any
registration statement in which a holder of Registrable Securi-
ties is participating, each such holder will furnish to the
Company in writing information regarding such holder's ownership
of Registrable Securities and its intended method of distribution
thereof and, to the extent permitted by law, shall indemnify the
Company, its directors, officers, employees and agents and each
Person who controls (within the meaning of the Securities Act)
the Company or such an other indemnified Person against all
Losses caused by, resulting from or relating to any untrue or
alleged untrue statement of material fact contained in the
registration statement, prospectus or preliminary prospectus or
any amendment thereof or supplement thereto or any omission or
alleged omission of a material fact required to be stated therein
or necessary to make the statements therein not misleading, but
only to the extent that such untrue statement or omission is
caused by and contained in such information so furnished in
writing by such holder; provided, however, that each holder's
obligation to indemnify the Company hereunder shall be appor-
tioned between each holder based upon the net amount received by
each holder from the sale of Registrable Securities, as compared
to the total net amount received by all of the holders of Regis-
trable Securities sold pursuant to such registration statement,
no such holder being liable to the Company in excess of such
apportionment.
(c) Notice. Any Person entitled to indemnifica-
tion hereunder shall give prompt written notice to the indemnify-
ing party of any claim with respect to which its seeks indemnifi-
cation; provided, however, the failure to give such notice shall
not release the indemnifying party from its obligation, except to
the extent that the indemnifying party has been materially
prejudiced by such failure to provide such notice.
(d) Defense of Actions. In any case in which any
such action is brought against any indemnified party, and it
notifies an 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 indemnify-
ing party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof the
indemnifying party will not (so long as it shall continue to have
the right to defend, contest, litigate and settle the matter in
question in accordance with this paragraph) be liable to such
indemnified party hereunder for any legal or other expense
subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investi-
gation, supervision and monitoring (unless such indemnified party
reasonably objects to such assumption on the grounds that there
may be defenses available to it which are different from or in
addition to the defenses available to such indemnifying party,
in which event the indemnified party shall be reimbursed by the
indemnifying party for the expenses incurred in connection with
retaining separate legal counsel). An indemnifying party shall
not be liable for any settlement of an action or claim effected
without its consent. The indemnifying party shall lose its right
to defend, contest, litigate and settle a matter if it shall fail
to diligently contest such matter (except to the extent settled
in accordance with the next following sentence). No matter shall
be settled by an indemnifying party without the consent of the
indemnified party (which consent shall not be unreasonably
withheld).
(e) Survival. The indemnification provided for
under this Agreement shall remain in full force and effect
regardless of any investigation made by or on behalf of the
indemnified Person and will survive the transfer of the Registra-
ble Securities and the termination of this Agreement.
(f) Contribution. If recovery is not available
under the foregoing indemnification provisions for any reason or
reasons other than as specified therein, any Person who would
otherwise be entitled to indemnification by the terms thereof
shall nevertheless be entitled to contribution with respect to
any Losses with respect to which such Person would be entitled to
such indemnification but for such reason or reasons. In deter-
mining the amount of contribution to which the respective Persons
are entitled, there shall be considered the Persons' relative
knowledge and access to information concerning the matter with
respect to which the claim was asserted, the opportunity to
correct and prevent any statement or omission, and other equita-
ble considerations appropriate under the circumstances. It is
hereby agreed that it would not necessarily be equitable if the
amount of such contribution were determined by pro rata or per
capita allocation. No person guilty of fraudulent misrepresenta-
tion (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not
found guilty of such fraudulent misrepresentation. Notwithstand-
ing the foregoing, no Stockholder shall be required to make a
contribution in excess of the net amount received by such holder
from the sale of Registrable Securities.
ARTICLE VI
Miscellaneous
(a) Legends. Each of the Stockholders agrees
that substantially the following legends shall be placed on the
certificates representing any Shares owned by them:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT
BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED
OR OTHERWISE DISPOSED OF UNLESS SUCH TRANSFER, SALE,
ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION
COMPLIES WITH THE PROVISIONS OF A STOCKHOLDERS AGREE-
MENT DATED AS OF JULY 2, 1996, A COPY OF WHICH IS ON
FILE WITH THE SECRETARY OF HAYES WHEELS INTERNATIONAL,
INC. AND IS AVAILABLE WITHOUT CHARGE UPON WRITTEN
REQUEST THEREFOR. THE HOLDER OF THIS CERTIFICATE, BY
ACCEPTANCE OF THIS CERTIFICATE, AGREES TO BE BOUND BY
ALL OF THE PROVISIONS OF THE AFORESAID AGREEMENT.
The Company agrees to remove the legend on the Shares upon the
resale of such Shares in accordance with the terms of this
Agreement (other than pursuant to Section 4.01(a)(i) and Section
4.01(b)(iii) hereof).
(b) Specific Performance. Each of the Stockhold-
ers acknowledges and agrees that in the event of any breach of
this Agreement, the non-breaching party or parties would be
irreparably harmed and could not be made whole by monetary
damages. The Stockholders hereby agree that in addition to any
other remedy to which they may be entitled at law or in equity,
they shall be entitled to compel specific performance of this
Agreement in any action instituted in any court of the United
States or any state thereof having subject matter jurisdiction
for such action.
(c) Headings. The headings in this Agreement are
for convenience of reference only and shall not control or affect
the meaning or construction of any provisions hereof.
(d) Entire Agreement. This Agreement and the
Subscription Agreement constitute the entire agreement and
understanding of the parties hereto in respect of the subject
matter contained herein, and there are no restrictions, promises,
representations, warranties, covenants, conditions or undertak-
ings with respect to the subject matter hereof, other than those
expressly set forth or referred to herein. This Agreement and
the Subscription Agreement supersede all prior agreements and
understandings between the parties hereto with respect to the
subject matter hereof.
(e) Proxy. For so long as this Agreement is in
effect, if any Stockholder fails or refuses to vote that
Stockholder's Shares pursuant to this Agreement, then, without
further action by such Stockholder, each other Stockholder shall
have an irrevocable proxy coupled with an interest to vote such
Stockholder's Shares in accordance with this Agreement, and each
Stockholder hereby grants to the other Stockholders such irrevo-
cable proxy coupled with an interest.
(f) Notices. All notices and other communica-
tions hereunder shall be in writing and shall be delivered
personally or by next-day courier or telecopied with confirmation
of receipt, to the parties at the addresses specified below (or
at such other address for a party as shall be specified by like
notice; provided that notices of change of address shall be
effective only upon receipt thereof). Any such notice shall be
effective upon receipt, if personally delivered or telecopied, or
one day after delivery to a courier for next-day delivery.
If to the Company, to:
Hayes Wheels International, Inc.
38481 Huron River Drive
Romulus, Michigan 48174
Telecopier: (313) 942-5199
With copies to:
Hayes Wheels International, Inc.
38481 Huron River Drive
Romulus, Michigan 48174
Attn: General Counsel
Telecopier: (313) 942-5199
and
Altheimer & Gray
10 South Wacker Drive
Suite 4000
Chicago, Illinois 60606
Attention: Louis B. Goldman, Esquire
Telecopier: (312) 715-4800
If to JLL, to:
Joseph Littlejohn & Levy
450 Lexington Avenue
New York, New York 10017
Attention: Paul Levy
Telecopier: (212) 286-8624
With a copy to:
Skadden, Arps, Slate, Meagher & Flom
One Rodney Square
Wilmington, Delaware 19801
Attention: Robert B. Pincus, Esquire
Telecopier: (302) 651-3001
If to Nomura, to:
Nomura Holding America, Inc.
Two World Financial Center
Building B
New York, New York 10281
Attention: Dennis Dolan
Telecopier: (212) 667-1708
If to TSG, to:
TSG Capital Fund II, L.P.
177 Broad Street
Stamford, Connecticut 06901
Attention: Cleveland Christophe
Telecopier: (203) 406-1590
With a copy to:
Mayer, Brown & Platt
1675 Broadway
New York, New York 10019
Attention: James B. Carlson, Esquire
Telecopier: (212) 262-1910
If to Argosy, to:
CIBC WG Argosy Merchant Fund II, LLC
1325 Avenue of the Americas
22nd Floor
New York, New York 10019
Attention: Jay Bloom
Telecopier: (212) 664-1429
With a copy to:
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, New York 10022
Attention: Laurence D. Weltman, Esquire
Telecopier: (212) 832-8111
If to Chase, to:
Chase Capital Partners
380 Madison Avenue
12th Floor
New York, New York 10017
Attention: Brett Ingersoll
Telecopier: (212) 622-3101
With a copy to:
O'Sullivan, Graeve & Karabell
30 Rockefeller Plaza
41st Floor
New York, New York 10012
Attention: John Soydam, Esquire
Telecopier: (212) 408-2420
(g) Applicable Law. The substantive laws of the
State of New York shall govern the interpretation, validity and
performance of the terms of this Agreement, regardless of the law
that might be applied under applicable principles of conflicts of
laws.
THE PARTIES HERETO WAIVE THEIR RIGHT TO A JURY TRIAL WITH RESPECT
TO DISPUTES HEREUNDER; ALL SUCH DISPUTES SHALL BE SETTLED BY
BINDING ARBITRATION PURSUANT TO THE RULES OF THE AMERICAN ARBI-
TRATION ASSOCIATION IN NEW YORK CITY, NEW YORK AND THE ORDER OF
SUCH ARBITRATORS SHALL BE FINAL AND BINDING ON ALL PARTIES HERETO
AND MAY BE ENTERED AS A JUDGMENT IN A COURT HAVING JURISDICTION
OVER THE PARTIES.
(h) Severability. The invalidity, illegality or
unenforceability of one or more of the provisions of this Agree-
ment in any jurisdiction shall not affect the validity, legality
or enforceability of the remainder of this Agreement in such
jurisdiction or the validity, legality or enforceability of this
Agreement, including any such provision, in any other jurisdic-
tion, it being intended that all rights and obligations of the
parties hereunder shall be enforceable to the fullest extent
permitted by law.
(i) Successors; Assigns. The provisions of this
Agreement shall be binding upon the parties hereto and their
respective heirs, successors and permitted assigns. Neither this
Agreement nor the rights or obligations of any Stockholder
hereunder may be assigned, except in connection with the transfer
by a Stockholder of shares of New Company Common Stock to a
Permitted Transferee. Any such attempted assignment in contra-
vention of this Agreement shall be void and of no effect.
(j) Amendments. This Agreement may not be
amended, modified or supplemented unless such modification is in
writing and signed by the Company and the holders of at least
82.5% of the Shares outstanding on the date hereof less any
Shares subsequently Transferred other than to a Person described
in clauses (i) or (ii) of the definition of a Permitted Transferee.
(k) Waiver. Any waiver (express or implied) of
any default or breach of this Agreement shall not constitute a
waiver of any other or subsequent default or breach.
(l) Counterparts. This Agreement may be executed
in two or more counterparts, each of which shall be deemed an
original but all of which shall constitute one and the same
Agreement.
(m) Recapitalization. In the event that any
capital stock or other securities are issued in respect of, in
exchange for, or in substitution of, any shares of New Company
Common Stock by reason of any reorganization, recapitalization,
reclassification, merger, consolidation, spin-off, partial or
complete liquidation, stock dividend, split-up, sale of assets,
distribution to stockholders or combination of the shares of New
Company Common Stock or any other change in the Company's capital
structure, appropriate adjustments shall be made to the terms
hereof if necessary to fairly and equitably preserve the original
rights and obligations of the parties hereto under this Agreement.
(n) Termination. Unless terminated earlier
pursuant to the terms contained herein, this Agreement shall
terminate on the eighth anniversary of the date hereof.
IN WITNESS WHEREOF, the undersigned hereby agrees
to be bound by the terms and provisions of this Stockholders
Agreement as of the date first above written.
HAYES WHEELS INTERNATIONAL, INC.
By: /s/ Daniel M. Sandberg
Name: Daniel M. Sandberg
Title: Vice President & General
Counsel
JOSEPH LITTLEJOHN & LEVY FUND II, L.P.
By: JLL ASSOCIATES II, L.P.,
its General Partner
By: /s/ Paul S. Levy
Name: Paul S. Levy
Title: General Partner
CHASE EQUITY ASSOCIATES, a
California Limited Partnership
By: CHASE CAPITAL PARTNERS,
its General Partner
By: /s/ Donald J. Hofmann
Name: Donald J. Hofmann
Title: General Partner
CIBC WG ARGOSY MERCHANT FUND 2, L.L.C.
By: /s/ Jay Bloom
Name: Jay Bloom
Title:
NOMURA HOLDING AMERICA, INC.
By: /s/ Lawrence J. Pomerantz
Name: Lawrence J. Pomerantz
Title: Executive Managing Director
TSG CAPITAL FUND II, L.P.
By: TSG ASSOCIATES II, L.P.,
its General Partner
By: TSG ASSOCIATES II, INC.,
its General Partner
By: /s/ Cleveland A. Christophe
Name: Cleveland A. Christophe
Title: President
Exhibit A
Column A Column B
Shares of New Warrants to pur-
Name of Company Common chase New Company
Stockholder Stock Owned (#) Common Stock Held (#)
JLL 4,817,086 912,689
TSG 1,406,250 33,750
Argosy 1,250,000 30,000
Chase 625,000* 15,000**
Nomura 468,750 11,250
___________________
* Includes 74,513 shares of non-voting New Company
Common Stock.
** Consists of Warrants to purchase non-voting New
Company Common Stock.
Exhibit B
INDEMNIFICATION AGREEMENT
AGREEMENT, effective as of _______________,
between Hayes Wheels International, Inc., a Delaware
corporation (the "Company"), and _______________ the
("Indemnitee").
WHEREAS, it is essential to the Company to
retain and attract as directors the most capable persons
available;
WHEREAS, Indemnitee is a director of the Company;
WHEREAS, both the Company and Indemnitee recog-
nize the increased risk of litigation and other claims
being asserted against directors of public companies in
today's environment;
WHEREAS, the Restated Certificate of Incorpora-
tion (the "Charter") permits, and the By-laws (the "By-
Laws") of the Company require, the Company to indemnify
its directors to the fullest extent permitted by law and
the Indemnitee has agreed to serve as a director of the
Company in part in reliance on such Charter and By-Laws;
WHEREAS, in recognition of Indemnitee's need
for substantial protection against personal liability in
order to enhance Indemnitee's service to the Company in
an effective manner, the increasing difficulty in obtain-
ing satisfactory director liability insurance coverage
and Indemnitee's reliance on the aforesaid Charter and
By-Laws, and in part to provide Indemnitee with specific
contractual assurance that the protection afforded by
such Charter and By-Laws will be available to Indemnitee
(regardless of, among other things, any amendment to or
revocation of the Charter and By-Laws or any change in
the composition of the Company's Board of Directors or
acquisition transaction relating to the Company), the
Company wishes to provide in this Agreement for the
indemnification of and the advancing of expenses to
Indemnitee to the fullest extent (whether partial or
complete) permitted by law and as set forth in this
Agreement, and, to the extent insurance is maintained,
for the continued coverage of Indemnitee under the
Company's directors' liability insurance policies;
NOW, THEREFORE, in consideration of the premis-
es and of Indemnitee continuing to serve the Company
directly or, at its request, another enterprise, and
intending to be legally bound hereby, the parties hereto
agree as follows:
1. Certain Definitions:
(a) Change in Control: shall be deemed to have
occurred if (i) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Securi-
ties Exchange Act of 1934, as amended), other
than a trustee or other fiduciary holding secu-
rities under an employee benefit plan of the
Company or a corporation owned directly or
indirectly by the stockholders of the Company
in substantially the same proportions as their
ownership of stock of the Company, is or be-
comes the "beneficial owner" (as defined in
Rule 13d-3 under said Act), directly or indi-
rectly, of securities of the Company represent-
ing 30% or more of the total voting power rep-
resented by the Company's then outstanding
Voting Securities (other than Joseph Littlejohn
& Levy Fund II, L.P. or any of its affiliates),
or (ii) during any period of two consecutive
years, individuals who at the beginning of such
period constitute the Board of Directors of the
Company and any new director whose election by
the Board of Directors or nomination for elec-
tion by the Company's stockholders was approved
by a vote of at least two-thirds (2/3) of the
directors then still in office who either were
directors at the beginning of the period or
whose election or nomination for election was
previously so approved, cease for any reason to
constitute a majority thereof, or (iii) the
stockholders of the Company approve a merger or
consolidation of the Company with any other
corporation, other than a merger or consolida-
tion which would result in the Voting Securi-
ties of the Company outstanding immediately
prior thereto continuing to represent (either
by remaining outstanding or by being converted
into Voting Securities of the surviving entity)
at least [80%] of the total voting power repre-
sented by the Voting Securities of the Company
or such surviving entity outstanding immediate-
ly after such merger or consolidation, or the
stockholders of the Company approve a plan of
complete liquidation of the Company or an
agreement for the sale or disposition by the
Company of (in one transaction or a series of
transactions) all or substantially all the
Company's assets.
(b) Claim: any threatened, pending or completed
action, suit or proceeding, or any inquiry or
investigation, whether instituted by the Compa-
ny or any other party, that Indemnitee in good
faith believes might lead to the institution of
any such action, suit or proceeding, whether
civil, criminal, administrative, investigative
or other.
(c) Expenses: include attorneys' fees and all
other costs, expenses and obligations paid or
incurred in connection with investigating,
defending, being a witness in or participating
in (including on appeal), or preparing to de-
fend, be a witness in or participate in any
Claim relating to any Indemnifiable Event.
(d) Indemnifiable Event: any event or occurrence
related to the fact that Indemnitee is or was a
director, officer, employee, agent or fiduciary
of the Company, or is or was serving at the
request of the Company as a director, officer,
employee, trustee, agent or fiduciary of anoth-
er corporation, partnership, joint venture,
employee benefit plan, trust or other enter-
prise, or by reason of anything done or not
done by Indemnitee in any such capacity.
(e) Independent Legal Counsel: an attorney or firm
of attorneys, selected in accordance with the
provisions of Section 3, who shall not have
otherwise performed services for the Company,
any of its subsidiaries or Indemnitee within
the last two years (other than with respect to
matters concerning the rights of Indemnitee
under this Agreement, or of other indemnitees
under similar indemnity agreements).
(f) Reviewing Party: any appropriate person or
body consisting of a member or members of the
Company's Board of Directors or any other per-
son or body appointed by the Board who is not a
party to the particular Claim for which Indem-
nitee is seeking indemnification, or Indepen-
dent Legal Counsel.
(g) Voting Securities: any securities of the Com-
pany which vote generally in the election of
directors.
2. Basic Indemnification Arrangement. (a) In the
event Indemnitee was, is or becomes a party to or witness
or other participant in, or is threatened to be made a
party to or witness or other participant in, a Claim by
reason of (or arising in part out of) an Indemnifiable
Event, the Company shall indemnify Indemnitee to the
fullest extent permitted by law as soon as practicable,
but in any event no later than thirty days after written
demand is presented to the Company, against any and all
Expenses, judgments, fines, penalties and amounts paid in
settlement (including all interest, assessments and other
charges paid or payable in connection with or in respect
of such Expenses, judgments, fines, penalties or amounts
paid in settlement) of such Claim. If so requested by
Indemnitee, the Company shall advance (within two busi-
ness days of such request) any and all Expenses to Indem-
nitee (an "Expense Advance"). Notwithstanding anything
in this Agreement to the contrary, except as provided in
Section 5 hereof, prior to a Change in Control, Indemni-
tee shall not be entitled to indemnification or Expense
Advances pursuant to this Agreement in connection with
any Claim initiated by Indemnitee unless the Board of
Directors has authorized or consented to the initiation
of such Claim.
(b) Notwithstanding the foregoing, (i) the
obligations of the Company under Section 2(a) shall be
subject to the condition that the Reviewing Party shall
not have determined (in a written opinion, in any case in
which the Independent Legal Counsel referred to in Sec-
tion 3 hereof is involved) that Indemnitee would not be
permitted to be indemnified under applicable law, and
(ii) the obligation of the Company to make an Expense
Advance pursuant to Section 2(a) shall be subject to the
condition that, if, when and to the extent that the
Reviewing Party determines that Indemnitee would not be
permitted to be so indemnified under applicable law, the
Company shall be entitled to be reimbursed by Indemnitee
(who hereby agrees to reimburse the Company) for all such
amounts theretofore paid; provided, however, that if
Indemnitee has commenced or thereafter commences legal
proceedings in a court of competent jurisdiction to
secure a determination that Indemnitee should be indemni-
fied under applicable law, any determination made by the
Reviewing Party that Indemnitee would not be permitted to
be indemnified under applicable law shall not be binding
and Indemnitee shall not be required to reimburse the
Company for any Expense Advance until a final judicial
determination is made with respect thereto (as to which
all rights of appeal therefrom have been exhausted or
lapsed). If there has not been a Change in Control, the
Reviewing Party shall be selected by the Board of Direc-
tors, and, if there has been such a Change in Control
(other than a Change in Control which has been approved
by a majority of the Company's Board of Directors who
were directors immediately prior to such Change in Con-
trol), the Reviewing Party shall be the Independent Legal
Counsel referred to in Section 3 hereof. If there has
been no determination by the Reviewing Party or if the
Reviewing Party determines that Indemnitee substantively
would not be permitted to be indemnified in whole or in
part under applicable law, Indemnitee shall have the
right to commence litigation in any court in the State of
Delaware having subject matter jurisdiction thereof and
in which venue is proper seeking an initial determination
by the court or challenging any such determination by the
Reviewing Party or any aspect thereof, including the
legal or factual bases therefor, and the Company hereby
consents to service of process and to appear in any such
proceeding. Any determination by the Reviewing Party
otherwise shall be conclusive and binding on the Company
and Indemnitee.
3. Change in Control. The Company agrees that, if
there is a Change in Control of the Company (other than a
Change in Control which has been approved by a majority
of the Company's Board of Directors who were directors
immediately prior to such Change in Control), then with
respect to all matters thereafter arising concerning the
rights of Indemnitee to indemnity payments and Expense
Advances under this Agreement or any other agreement or
Charter or By-law provision now or hereafter in effect
relating to Claims for Indemnifiable Events, the Company
shall seek legal advice only from Independent Legal
Counsel selected by Indemnitee and approved by the Compa-
ny (which approval shall not be unreasonably withheld).
Such counsel, among other things, shall render its writ-
ten opinion to the Company and Indemnitee as to whether
and to what extent the Indemnitee would be permitted to
be indemnified under applicable law. The Company agrees
to pay the reasonable fees of the Independent Legal
Counsel referred to above and to fully indemnify such
counsel against any and all expenses (including
attorneys' fees), claims, liabilities and damages arising
out of or relating to this Agreement or its engagement
pursuant hereto.
4. Indemnification for Additional Expenses. The
Company shall indemnify Indemnitee against any and all
expenses (including attorneys' fees) and, if requested by
Indemnitee, shall (within two business days of such
request) advance such expenses to Indemnitee, which are
incurred by Indemnitee in connection with any action
brought by Indemnitee for (i) indemnification or advance
payment of Expenses by the Company under this Agreement
or any other agreement or Charter or By-Law provision now
or hereafter in effect relating to Claims for
Indemnifiable Events and/or (ii) recovery under any
directors' liability insurance policies maintained by the
Company, regardless of whether Indemnitee ultimately is
determined to be entitled to such indemnification, ad-
vance expense payment or insurance recovery, as the case
may be.
5. Partial Indemnity, Etc. If Indemnitee is
entitled under any provision of this Agreement to indem-
nification by the Company for some or a portion of the
Expenses, judgments, fines, penalties and amounts paid in
settlement of a Claim but not, however, for all of the
total amount thereof, the Company shall nevertheless
indemnify Indemnitee for the portion thereof to which
Indemnitee is entitled. Moreover, notwithstanding any
other provision of this Agreement, to the extent that
Indemnitee has been successful on the merits or otherwise
in defense of any or all Claims relating in whole or in
part to an Indemnifiable Event or in defense of any issue
or matter therein, including dismissal without prejudice,
Indemnitee shall be indemnified against all Expenses
incurred in connection therewith.
6. Burden of Proof. In connection with any deter-
mination by the Reviewing Party or otherwise as to wheth-
er Indemnitee is entitled to be indemnified hereunder the
burden of proof shall be on the Company to establish that
Indemnitee is not so entitled.
7. No Presumptions. For purposes of this Agree-
ment, the termination of any claim, action, suit or
proceeding, by judgment, order, settlement (whether with
or without court approval) or conviction, or upon a plea
of nolo contendere, or its equivalent, shall not create a
presumption that Indemnitee did not meet any particular
standard of conduct or have any particular belief or that
a court has determined that indemnification is not per-
mitted by applicable law. In addition, neither the
failure of the Reviewing Party to have made a determina-
tion as to whether Indemnitee has met any particular
standard of conduct or had any particular belief, nor an
actual determination by the Reviewing Party that Indemni-
tee has not met such standard of conduct or did not have
such belief, prior to the commencement of legal proceed-
ings by Indemnitee to secure a judicial determination
that Indemnitee should be indemnified under applicable
law shall be a defense to Indemnitee's claim or create a
presumption that Indemnitee has not met any particular
standard of conduct or did not have any particular belief.
8. Nonexclusivity, Etc. The rights of the Indem-
nitee hereunder shall be in addition to any other rights
Indemnitee may have under the Charter, By-Laws or the
Delaware General Corporation Law or otherwise. To the
extent that a change in the Delaware General Corporation
Law (whether by statute or judicial decision) permits
greater indemnification by agreement than would be af-
forded currently under the Charter, By-Laws and this
Agreement, it is the intent of the parties hereto that
Indemnitee shall enjoy by this Agreement the greater
benefits so afforded by such change.
9. Liability Insurance. To the extent the Company
maintains an insurance policy or policies providing
directors' liability insurance, Indemnitee shall be
covered by such policy or policies, in accordance with
its or their terms, to the maximum extent of the coverage
available for any Company director.
10. Period of Limitations. No legal action shall
be brought and no cause of action shall be asserted by or
in the right of the Company against Indemnitee,
Indemnitee's spouse, heirs, executors or personal or
legal representatives after the expiration of two years
from the date of accrual of such cause of action, and any
claim or cause of action of the Company shall be extin-
guished and deemed released unless asserted by the timely
filing of a legal action within such two-year period;
provided, however, that if any shorter period of limita-
tions is otherwise applicable to any such cause of action
such shorter period shall govern.
11. Amendments, Etc. No supplement, modification
or amendment of this Agreement shall be binding unless
executed in writing by both of the parties hereto. No
waiver of any of the provisions of this Agreement shall
be deemed or shall constitute a waiver of any other
provisions hereof (whether or not similar) nor shall such
waiver constitute a continuing waiver.
12. Subrogation. In the event of payment under
this Agreement, the Company shall be subrogated to the
extent of such payment to all of the rights of recovery
of Indemnitee, who shall execute all papers required and
shall do everything that may be necessary to secure such
rights, including the execution of such documents neces-
sary to enable the Company effectively to bring suit to
enforce such rights.
13. No Duplication of Payments. The Company shall
not be liable under this Agreement to make any payment in
connection with any Claim made against Indemnitee to the
extent Indemnitee has otherwise actually received payment
(under any insurance policy, Charter or By-law provision
or otherwise) of the amounts otherwise indemnifiable
hereunder.
14. Binding Effect, Etc. This Agreement shall be
binding upon and inure to the benefit of and be enforce-
able by the parties hereto and their respective succes-
sors, assigns, including any direct or indirect successor
by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the
Company, spouses, heirs, executors and personal and legal
representatives. This Agreement shall continue in effect
regardless of whether Indemnitee continues to serve as a
director of the Company or of any other enterprise at the
Company's request.
15. Severability. The provisions of this Agreement
shall be severable in the event that any of the provi-
sions hereof (including any provision within a single
section, paragraph or sentence) is held by a court of
competent jurisdiction to be invalid, void or otherwise
unenforceable in any respect, and the validity and en-
forceability of any such provision in every other respect
and of the remaining provisions hereof shall not be in
any way impaired and shall remain enforceable to the
fullest extent permitted by law.
16. Governing Law. This Agreement shall be gov-
erned by and construed and enforced in accordance with
the laws of the State of Delaware applicable to contracts
made and to be performed in such state without giving
effect to the principles of conflicts of laws.
IN WITNESS WHEREOF, the parties hereto have
executed this Agreement this ____ day of July, 1996.
HAYES WHEELS INTERNATIONAL, INC.
By ______________________
Name:
Title:
________________________
Indemnitee
RESTATED
CERTIFICATE OF INCORPORATION
OF
HAYES WHEELS INTERNATIONAL, INC.
FIRST: The name of the Corporation is HAYES
WHEELS INTERNATIONAL, INC. (hereinafter the "Corporation").
SECOND: The address of the registered office
of the Corporation in the State of Delaware is 1209
Orange Street, in the City of Wilmington, County of New
Castle. The name of its registered agent at that address
is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to
engage in any lawful act or activity for which a corpora-
tion may be organized under the General Corporation Law
of the State of Delaware as set forth in Title 8 of the
Delaware Code (the "GCL").
FOURTH: The total number of shares of stock
which the Corporation shall have authority to issue is
ninety-nine million (99,000,000) shares of Common Stock,
each having a par value of one cent ($.01), one million
(1,000,000) shares of Nonvoting Common Stock, each having
a par value of one cent ($.01) and twenty-five million
(25,000,000) shares of Preferred Stock, each having a par
value of one cent ($.01).
The Board of Directors is expressly authorized
to provide for the issuance of all or any shares of the
Preferred Stock in one or more classes or series, and to
fix for each such class or series such voting powers,
full or limited, or no voting powers, and such distinc-
tive designations, preferences and relative, participat-
ing, optional or other special rights and such qualifica-
tions, limitations or restrictions thereof, as shall be
stated and expressed in the resolution or resolutions
adopted by the Board of Directors providing for the
issuance of such class or series and as may be permitted
by the GCL, including, without limitation, the authority
to provide that any such class or series may be (i)
subject to redemption at such time or times and at such
price or prices; (ii) entitled to receive dividends
(which may be cumulative or non-cumulative) at such
rates, on such conditions, and at such times, and payable
in preference to, or in such relation to, the dividends
payable on any other class or classes or any other se-
ries; (iii) entitled to such rights upon the dissolution
of, or upon any distribution of the assets of, the Corpo-
ration; or (iv) convertible into, or exchangeable for,
shares of any other class or classes of stock, or of any
other series of the same or any other class or classes of
stock, of the Corporation at such price or prices or at
such rates of exchange and with such adjustments; all as
may be stated in such resolution or resolutions.
The following is a statement of the designa-
tions and powers, preferences and rights, and qualifica-
tions, limitations and restrictions thereof, in respect
of the Common Stock and Nonvoting Common Stock of the
Corporation:
(1) Except as otherwise provided herein,
all shares of Common Stock and Nonvoting Common
Stock shall be identical and shall entitle the
holders thereof to the same rights and privi-
leges.
(2) Each holder of shares of Common Stock
shall be entitled to one vote for each share of
Common Stock on all matters. Except as other-
wise required by law, the holders of shares of
Nonvoting Common Stock shall have no vote on
any matter and shares of Nonvoting Common Stock
shall not be included in determining the number
of shares voting or entitled to vote on any
such matters.
(3) Subject to the rights of the holders
of Preferred Stock or any other class or series
of stock having a preference as to dividends
over the Common Stock and the Nonvoting Common
Stock then outstanding, the holders of Common
Stock and Nonvoting Common Stock shall be enti-
tled to receive, to the extent permitted by
law, and to share equally and ratably, share
for share, such dividends as may be declared
from time to time by the Board of Directors,
whether payable in cash, property or securities
of the Corporation; provided, however, that if
the dividends that are declared are payable in
shares of Common Stock or Nonvoting Common
Stock, such dividends shall be declared at the
same rate on each class of stock, and the divi-
dends payable to holders of Common Stock shall
be paid in shares of Common Stock and the divi-
dends payable to holders of Nonvoting Common
Stock shall be paid in shares of Nonvoting
Common Stock.
(4) In the event of the voluntary or
involuntary liquidation, dissolution, distribu-
tion of assets or other winding up of the Cor-
poration, after distribution in full of prefer-
ential amounts, if any, to be distributed to
the holders of shares of Preferred Stock or any
other class or series of stock having a prefer-
ence as to liquidating distributions over the
Common Stock and the Nonvoting Common Stock,
the holders of the Common Stock and the Nonvot-
ing Common Stock shall be entitled to share
equally and ratably, share for share, in all of
the remaining assets of the Corporation of
whatever kind available for distribution to
stockholders. A consolidation or merger of the
Corporation with and into any other corporation
or corporations shall not be deemed to be a
liquidation, dissolution or winding up of the
Corporation as those terms are used in this
Section.
(5) Each record holder of Nonvoting Com-
mon Stock is entitled at any time to convert
any or all of the shares of such holder's Non-
voting Common Stock into an equal number of
shares of Common Stock; provided, however, that
no holder of Nonvoting Common Stock is entitled
to convert any share or shares of Nonvoting
Common Stock to the extent that, as a result of
such conversion, such holder or its affiliates
would directly or indirectly own, control or
have power to vote or dispose of a greater
quantity of securities of any kind issued by
the Corporation than such holder and its affil-
iates are permitted to own, control or have
power to vote or dispose of under any law or
under regulation, order, rule or other require-
ment of any governmental authority at any time
applicable to such holder and its affiliates.
Each conversion of shares of Nonvoting
Common Stock, as herein described, will be
effected by the surrender of the certificate or
certificates representing the shares to be
converted at the principal office of the Corpo-
ration at any time during normal business
hours, together with a written notice by the
holder of such shares to be converted stating
that such holder desires to convert the shares,
or a stated number of the shares, represented
by such certificate or certificates into Common
Stock, that upon such conversion such holder
and its affiliates will not directly or indi-
rectly own, control or have the power to vote
or dispose of a greater quantity of securities
of any kind issued by the Corporation than such
holder and its affiliates are permitted to own,
control or have the power to vote or dispose of
under any applicable law, regulation, rule or
other governmental requirement for such holder
or its affiliate. Such conversion will be
deemed to have been effected as of the close of
business on the date on which such certificate
or certificates have been surrendered and such
notice has been received, and at such time the
rights of the holder of the converted stock as
such holder will cease and the person or per-
sons in whose name or names the certificate or
certificates for shares of Common Stock are to
be issued upon such conversion will be deemed
to have become the holder or holders of record
of the shares of Common Stock as are to be
represented thereby.
Promptly after such surrender and the
receipt of such written notice referred to
above the Corporation will issue and deliver,
in accordance with the surrendering holder's
instructions, (i) the certificate or certifi-
cates for the Common Stock issuable upon such
conversion and (ii) a certificate representing
any Nonvoting Common Stock which was represent-
ed by the certificate or certificates delivered
to the Corporation in connection with such
conversion but which was not converted.
The issuance of certificates for Common
Stock upon conversion of Nonvoting Common Stock
will be made without charge to the holders of
such shares for any issuance tax (except stock
transfer taxes) in respect thereof or other
cost incurred by the Corporation in connection
with such conversion and related issuance of
Common Stock.
For purposes of this Section, an "affili-
ate" of a holder is any person who controls, or
is controlled by or under common control with,
such holder, and includes any Bank Holding
Company with respect to which the holder would
be a "Subsidiary" within the meaning of the
Bank Holding Company Act of 1956, as amended.
(6) If the Corporation in any manner
subdivides or combines the outstanding shares
of Common Stock or Nonvoting Common Stock, the
outstanding shares of the other class of common
stock shall be proportionately subdivided or
combined.
(7) The Corporation shall not close its
books against the transfer of any shares of
Common Stock issued or issuable upon conversion
of Nonvoting Common Stock in any manner that
would interfere with the timely conversion of
such Nonvoting Common Stock.
FIFTH: The following provisions are inserted
for the management of the business and the conduct of the
affairs of the Corporation, and for further definition,
limitation and regulation of the powers of the Corpora-
tion and of its directors and stockholders:
(1) The business and affairs of the Cor-
poration shall be managed by or under the di-
rection of the Board of Directors.
(2) The directors shall have concurrent
power with the stockholders to make, alter,
amend, change, add to or repeal the By-Laws of
the Corporation.
(3) The number of directors of the Corpo-
ration shall be as from time to time fixed by,
or in the manner provided in, the By-Laws of
the Corporation. Election of directors need
not be by written ballot unless the By-Laws so
provide.
(4) No director shall be personally lia-
ble to the Corporation or any of its stockhold-
ers for monetary damages for breach of fiducia-
ry duty as a director, except for liability (i)
for any breach of the director's duty of loyal-
ty to the Corporation or its stockholders, (ii)
for acts or omissions not in good faith or
which involve intentional misconduct or a know-
ing violation of law, (iii) pursuant to Section
174 of the GCL or (iv) for any transaction from
which the director derived an improper personal
benefit. Any repeal or modification of this
Article FIFTH by the stockholders of the Corpo-
ration shall not adversely affect any right or
protection of a director of the Corporation
existing at the time of such repeal or modifi-
cation with respect to acts or omissions occur-
ring prior to such repeal or modification.
(5) In addition to the powers and author-
ity hereinbefore or by statute expressly con-
ferred upon them, the directors are hereby
empowered to exercise all such powers and do
all such acts and things as may be exercised or
done by the Corporation, subject, nevertheless,
to the provisions of the GCL, this Certificate
of Incorporation, and any By-Laws adopted by
the stockholders; provided, however, that no
By-Laws hereafter adopted by the stockholders
shall invalidate any prior act of the directors
which would have been valid if such By-Laws had
not been adopted.
SIXTH: Meetings of stockholders may be held
within or without the State of Delaware, as the By-Laws
may provide. The books of the Corporation may be kept
(subject to any provision contained in the GCL) outside
the State of Delaware at such place or places as may be
designated from time to time by the Board of Directors or
in the By-Laws of the Corporation.
SEVENTH: No stockholder action required to be
taken at any annual or special meeting of stockholders of
the Corporation may be taken without a meeting, and the
power of stockholders to consent in writing without a
meeting to the taking of any action is specifically
denied.
EIGHTH: From and commencing after the [1996]
annual meeting of stockholders, the Board of Directors
shall be divided into three classes, designated Class 1,
Class 2 and Class 3. Each class shall consist, as nearly
as may be possible, of one-third of the number of direc-
tors constituting the Board of Directors. The term of
office of the Class 1 Directors will first expire at the
first annual meeting of stockholders after their elec-
tion; the term of office of the Class 2 Directors will
first expire at the second annual meeting of stockholders
after their election; and the term of office of the Class
3 Directors will first expire at the third annual meeting
of stockholders after their election, and in each case
until their successors are duly elected and qualified.
At each annual meeting of stockholders after the initial
classification of Directors, successors to the class of
Directors whose terms expire at that annual meeting of
stockholders shall be elected by stockholders for a
three-year term and until their successors are duly
elected and qualified. Any Director elected to fill a
vacancy resulting from an increase in any class or from
the removal from office, death, disability, resignation
or disqualification of a Director or other cause shall
hold office for the remaining term of the class in which
such vacancy existed. Except as otherwise provided
herein, no decrease in the size of the Board of Directors
shall have the effect of removing or shortening the term
of any incumbent Director. Except as otherwise provided
herein, increases in the size of the Board of Directors
will be distributed among the classes so as to render the
classes as nearly equal in size as practicable. Whenever
the holders of shares of any series of Serial Preferred
Stock issued pursuant to the resolution or resolutions
adopted by a majority of the Board of Directors then in
office providing for the issue of shares of Serial Pre-
ferred Stock shall have the right, voting as a separate
class, to elect Directors, the election, term of office,
filling of vacancies and other terms of such director-
ships shall be governed by the terms of such resolution
or resolutions, as the case may be, and such director-
ships shall not be divided into serial classes or other-
wise subject to this Article EIGHTH unless expressly so
provided therein.
NINTH: The By-Laws may be altered, amended or
repealed, in whole or in part, or new By-Laws may be
adopted by the stockholders or by the Board of Directors,
provided, however, that notice of such alteration, amend-
ment, repeal or adoption of new By-Laws be contained in
the notice of such meeting of stockholders or Board of
Directors as the case may be. All such alterations,
amendments or repeals must be approved by an affirmative
vote of the holders of at least two-thirds of the out-
standing shares of capital stock entitled to vote thereon
or by a majority of the entire Board of Directors then in
office, except that any amendment of (i) Sections 2 and 6
of Article II of the By-Laws, (ii) Sections 1, 2 and 3 of
Article III of the By-Laws and (iii) Article VIII of the
By-Laws shall require either (x) the affirmative vote of
the holders of at least 80% of the outstanding shares of
capital stock entitled to vote thereon or (y) the affir-
mative vote of a majority of the Board of Directors.
TENTH: Notwithstanding anything contained in
this Certificate of Incorporation or the By-Laws to the
contrary, any provision herein or in the By-Laws which
provides for more than a majority vote for any action may
only be amended or repealed by a supermajority vote equal
to the supermajority vote called for in such provision.
ELEVENTH: The Corporation reserves the right
to amend, alter, change or repeal any provision contained
in this Certificate of Incorporation, in the manner now
or hereafter prescribed by statute, and all rights con-
ferred upon stockholders herein are granted subject to
this reservation.
CERTIFICATE OF CORRECTION
TO THE
RESTATED CERTIFICATE OF INCORPORATION
OF
HAYES WHEELS INTERNATIONAL, INC.
PURSUANT TO SECTION 103(F) OF THE
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
HAYES WHEELS INTERNATIONAL, INC., a Delaware corpo-
ration (the "Corporation"), does hereby certify as follows:
FIRST: On July 2, 1996, the Corporation filed a
Restated Certificate of Incorporation of the Corporation
(the "Certificate") pursuant to Section 245 of the Gener-
al Corporation Law of the State of Delaware (the "GCL")
which contained an error in the first sentence of Article
EIGHTH.
SECOND: The error of said Certificate to be cor-
rected is as follows:
the first sentence of Article EIGHTH of the Certificate
inadvertently referred to the "[1996] annual meeting of
stockholders."
THIRD: The first sentence of Article EIGHTH of
the Certificate, as corrected, shall read as follows:
"EIGHTH: From and commencing after the consum-
mation of the merger of MWC Holdings, Inc., a
Delaware corporation ("Holdings"), with and
into the Corporation, pursuant to the terms of
the Agreement and Plan of Merger, dated as of
March 28, 1996, by and between Holdings and the
Corporation, the Board of Directors shall be
divided into three classes, designated Class 1,
Class 2 and Class 3."
FOURTH: The foregoing correction is being filed in
accordance with the provisions of Section 103(f) of the
GCL.
IN WITNESS WHEREOF, the corporation has caused this
Certificate of Correction to be duly executed in its
corporate name this day of July, 1996.
HAYES WHEELS INTERNATIONAL, INC.
By:
Name:
Title:
AMENDED AND RESTATED
BY-LAWS
OF
HAYES WHEELS INTERNATIONAL, INC
hereinafter called the "Corporation
ARTICLE I
OFFICES
Section 1. Registered Office. The registered
office of the Corporation shall be in the City of
Wilmington, County of New Castle, State of Delaware.
Section 2. Other Offices. The Corporation may
also have offices at such other places both within and
without the State of Delaware as the Board of Directors
may from time to time determine.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. Meetings of the
stockholders for the election of directors or for any
other purpose shall be held at such time and place,
either within or without the State of Delaware as shall
be designated from time to time by the Board of Directors
and stated in the notice of the meeting or in a duly
executed waiver of notice thereof.
Section 2. Annual Meetings. The Annual Meet-
ings of Stockholders shall be held on such date and at
such time as shall be designated from time to time by the
Board of Directors and stated in the notice of the meet-
ing, at which meetings the stockholders shall elect by a
plurality vote a Board of Directors, and transact such
other business as may properly be brought before the
meeting. Written notice of the Annual Meeting stating
the place, date and hour of the meeting shall be given to
each stockholder entitled to vote at such meeting not
less than ten nor more than sixty days before the date of
the meeting.
To be properly brought before the Annual Meet-
ing, business must be either (a) specified in the notice
of Annual Meeting (or any supplement thereto) given by or
at the direction of the Board of Directors, (b) otherwise
properly brought before the meeting by or at the direc-
tion of the Board of Directors, or (c) otherwise properly
brought before the meeting by a stockholder. In addition
to any other applicable requirements, for business to be
properly brought before an Annual Meeting by a stockhold-
er, the stockholder must have given timely notice thereof
in writing to the Secretary of the Corporation. To be
timely, a stockholder's notice must be delivered to or
mailed and received at the principal executive offices of
the Corporation, not less than 50 days nor more than 75
days prior to the meeting; provided, however, that in the
event that less than 65 days' notice or prior public
disclosure of the date of the Annual Meeting is given or
made to stockholders, notice by the stockholder to be
timely must be so received not later than the close of
business on the 15th day following the day on which such
notice of the date of the Annual Meeting was mailed or
such public disclosure was made, whichever first occurs.
A stockholder's notice to the Secretary shall set forth
as to each matter the stockholder proposes to bring
before the Annual Meeting (i) a brief description of the
business desired to be brought before the Annual Meeting
and the reasons for conducting such business at the
Annual Meeting, (ii) the name and record address of the
stockholder proposing such business, (iii) the class and
number of shares of the Corporation which are beneficial-
ly owned by the stockholder, and (iv) any material inter-
est of the stockholder in such business.
Notwithstanding anything in the By-Laws to the
contrary, no business shall be conducted at the Annual
Meeting except in accordance with the procedures set
forth in this Section 2, provided, however, that nothing
in this Section 2 shall be deemed to preclude discussion
by any stockholder of any business properly brought
before the Annual Meeting.
The Chairman of an Annual Meeting shall, if the
facts warrant, determine and declare to the meeting that
business was not properly brought before the meeting in
accordance with the provisions of this Section 2, and if
he should so determine, he shall so declare to the meet-
ing and any such business not properly brought before the
meeting shall not be transacted.
Section 3. Special Meetings. Unless otherwise
prescribed by law or by the Certificate of Incorporation,
Special Meetings of Stockholders, for any purpose or
purposes, may be called by either (i) the Chairman, if
there be one, (ii) the President, (iii) any Vice Presi-
dent, if there be one or (iv) the Secretary, and shall be
called by any such officer at the request in writing of a
majority of the Board of Directors. Such request shall
state the purpose or purposes of the proposed meeting.
Written notice of a Special Meeting stating the place,
date and hour of the meeting and the purpose or purposes
for which the meeting is called shall be given not less
than ten nor more than sixty days before the date of the
meeting to each stockholder entitled to vote at such
meeting.
Section 4. Quorum. Except as otherwise pro-
vided by law or by the Certificate of Incorporation, the
holders of a majority of the capital stock issued and
outstanding and entitled to vote thereat, present in
person or represented by proxy, shall constitute a quorum
at all meetings of the stockholders for the transaction
of business. If, however, such quorum shall not be
present or represented at any meeting of the stockhold-
ers, the stockholders entitled to vote thereat, present
in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum
shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represent-
ed, any business may be transacted which might have been
transacted at the meeting as originally noticed. If the
adjournment is for more than thirty days, or if after the
adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be
given to each stockholder entitled to vote at the meeting.
Section 5. Voting. Unless otherwise required
by law, the Certificate of Incorporation or these By-
Laws, any question brought before any meeting of stock-
holders shall be decided by the vote of the holders of a
majority of the stock represented and entitled to vote
thereat. Each stockholder represented at a meeting of
stockholders shall be entitled to cast one vote for each
share of the capital stock entitled to vote thereat held
by such stockholder. Such votes may be cast in person or
by proxy but no proxy shall be voted on or after three
years from its date, unless such proxy provides for a
longer period. The Board of Directors, in its discre-
tion, or the officer of the Corporation presiding at a
meeting of stockholders, in his discretion, may require
that any votes cast at such meeting shall be cast by
written ballot.
Section 6. Consent of Stockholders in Lieu of
Meeting. No stockholder action required to be taken or
which may be taken at any annual or special meeting of
stockholders of the Corporation may be taken without a
meeting, and the power of stockholders to consent in
writing without a meeting to the taking of any action is
specifically denied.
Section 7. List of Stockholders Entitled to
Vote. The officer of the Corporation who has charge of
the stock ledger of the Corporation shall prepare and
make, at least ten days before every meeting of stock-
holders, a complete list of the stockholders entitled to
vote at the meeting, arranged in alphabetical order, and
showing the address of each stockholder and the number of
shares registered in the name of each stockholder. Such
list shall be open to the examination of any stockholder,
for any purpose germane to the meeting, during ordinary
business hours, for a period of at least ten days prior
to the meeting, either at a place within the city where
the meeting is to be held, which place shall be specified
in the notice of the meeting, or, if not so specified, at
the place where the meeting is to be held. The list
shall also be produced and kept at the time and place of
the meeting during the whole time thereof, and may be
inspected by any stockholder of the Corporation who is
present.
Section 8. Stock Ledger. The stock ledger of
the Corporation shall be the only evidence as to who are
the stockholders entitled to examine the stock ledger,
the list required by Section 7 of this Article II or the
books of the Corporation, or to vote in person or by
proxy at any meeting of stockholders.
ARTICLE III
DIRECTORS
Section 1. Number of Directors. The Board of
Directors shall consist of not less than one nor more
than fifteen members, the exact number to be fixed from
time to time by the Board of Directors pursuant to a
resolution adopted by a majority of Directors then in
office; provided, however, that such maximum number may
be increased from time to time to reflect the rights, if
any, of holders of any series of Serial Preferred Stock
of the Corporation to elect Directors in accordance with
the Certificate of Incorporation of the Corporation or in
any resolution or resolutions adopted by a majority of
the Board of Directors then in office providing for the
issue of any series of Serial Preferred Stock. At least
two of the members of the Board shall be independent
directors if and so long as such independent directors
are required by the rules of the stock exchange or quota-
tion service on which the Corporation's capital stock is
traded or quoted.
Section 2. Election and Term of Office. From
and commencing after the 1996 annual meeting of stock-
holders, the Board of Directors shall be divided into
three classes, designated Class 1, Class 2 and Class 3.
Each class shall consist, as nearly as may be possible,
of one-third of the number of directors constituting the
Board of Directors. The term of office of the Class 1
Directors will first expire at the first annual meeting
of stockholders after their election; the term of office
of the Class 2 Directors will first expire at the second
annual meeting of stockholders after their election; and
the term of office of the Class 3 Directors will first
expire at the third annual meeting of stockholders after
their election, and in each case until their successors
are duly elected and qualified. At each annual meeting
of stockholders after the initial classification of
Directors, successors to the class of Directors whose
terms expire at that annual meeting of stockholders shall
be elected by stockholders for a three-year term and
until their successors are duly elected and qualified.
Any Director elected to fill a vacancy resulting from an
increase in any class or from the removal from office,
death, disability, resignation or disqualification of a
Director or other cause shall hold office for the remain-
ing term of the class in which such vacancy existed.
Except as otherwise provided herein or in the Certificate
of Incorporation of the Corporation, no decrease in the
size of the Board of Directors shall have the effect of
removing or shortening the term of any incumbent Direc-
tor. Except as otherwise provided herein or in the
Certificate of Incorporation of the Corporation, increas-
es in the size of the Board of Directors will be distrib-
uted among the classes so as to render the classes as
nearly equal in size as practicable. Whenever the hold-
ers of shares of any series of Serial Preferred Stock
issued pursuant to the resolution or resolutions adopted
by a majority of the Board of Directors then in office
providing for the issue of shares of Serial Preferred
Stock pursuant to the Certificate of Incorporation of the
Corporation shall have the right, voting as a separate
class, to elect Directors, the election, term of office,
filling of vacancies and other terms of such director-
ships shall be governed by the terms of such resolution
or resolutions, as the case may be, and such director-
ships shall not be divided into serial classes or other-
wise subject to this Section 2 unless expressly so pro-
vided therein.
Section 3. Nomination of Directors. Only
persons who are nominated in accordance with the follow-
ing procedures shall be eligible for election as Direc-
tors. Nominations of persons for election to the Board
of the Corporation at the Annual Meeting may be made at a
meeting of stockholders by or at the direction of the
Board of Directors by any nominating committee or person
appointed by the Board or by any stockholder of the
Corporation entitled to vote for the election of Direc-
tors at the meeting who complies with the notice proce-
dures set forth in this Section 3. Such nominations,
other than those made by or at the direction of the
Board, shall be made pursuant to timely notice in writing
to the Secretary of the Corporation. To be timely, a
stockholder's notice shall be delivered to or mailed and
received at the principal executive offices of the Corpo-
ration not less than 50 days nor more than 75 days prior
to the meeting; provided, however, that in the event that
less than 65 days' notice or prior public disclosure of
the date of the meeting is given or made to stockholders,
notice by the stockholder to be timely must be so re-
ceived not later than the close of business on the 15th
day following the day on which such notice of the date of
the meeting was mailed or such public disclosure was
made, whichever first occurs. Such stockholder's notice
to the Secretary shall set forth (a) as to each person
whom the stockholder proposes to nominate for election or
re-election as a Director, (i) the name, age, business
address and residence address of the person, (ii) the
principal occupation or employment of the person, (iii)
the class and number of shares of capital stock of the
Corporation which are beneficially owned by the person
and (iv) any other information relating to the person
that is required to be disclosed in solicitations for
proxies for election of Directors pursuant to Rule 14a
under the Securities Exchange Act of 1934, as amended;
and (b) as to the stockholder giving the notice (i) the
name and record address of the stockholder and (ii) the
class and number of shares of capital stock of the Corpo-
ration which are beneficially owned by the stockholder.
The Corporation may require any proposed nominee to
furnish such other information as may reasonably be
required by the Corporation to determine the eligibility
of such proposed nominee to serve as a Director of the
Corporation. No person shall be eligible for election as
a Director of the Corporation unless nominated in accor-
dance with the procedures set forth herein.
The Chairman of the meeting shall, if the facts
warrant, determine and declare to the meeting that a
nomination was not made in accordance with the foregoing
procedure, and if he should so determine, he shall so
declare to the meeting and the defective nomination shall
be disregarded.
Section 4. Vacancies. Vacancies and newly
created directorships resulting from any increase in the
authorized number of directors may be filled by a majori-
ty of the directors then in office, though less than a
quorum, or by a sole remaining director, and the direc-
tors so chosen shall hold office for the remaining term
of the class in which such vacancy existed and until
their successors are duly elected and qualified, or until
their earlier resignation or removal.
Section 5. Duties and Powers. The business of
the Corporation shall be managed by or under the direc-
tion of the Board of Directors which may exercise all
such powers of the Corporation and do all such lawful
acts and things as are not by statute or by the Certifi-
cate of Incorporation or by these By-Laws directed or
required to be exercised or done by the stockholders.
Section 6. Meetings. The Board of Directors of
the Corporation may hold meetings, both regular and
special, either within or without the State of Delaware.
Regular meetings of the Board of Directors may be held
without notice at such time and at such place as may from
time to time be determined by the Board of Directors.
Special meetings of the Board of Directors may be called
by the Chairman, if there be one, the President or any
director. Notice thereof stating the place, date and
hour of the meeting shall be given to each director
either by mail not less than forty-eight (48) hours
before the date of the meeting, by telephone or telegram
on twenty-four (24) hours' notice, or on such shorter
notice as the person or persons calling such meeting may
deem necessary or appropriate in the circumstances.
Section 7. Quorum. Except as may be otherwise
specifically provided by law, the Certificate of Incorpo-
ration or these By-Laws, at all meetings of the Board of
Directors, a majority of the entire Board of Directors
shall constitute a quorum for the transaction of business
and the act of a majority of the directors present at any
meeting at which there is a quorum shall be the act of
the Board of Directors. If a quorum shall not be present
at any meeting of the Board of Directors, the directors
present thereat may adjourn the meeting from time to
time, without notice other than announcement at the
meeting, until a quorum shall be present.
Section 8. Actions of Board. Unless otherwise
provided by the Certificate of Incorporation or these By-
Laws, any action required or permitted to be taken at any
meeting of the Board of Directors or of any committee
thereof may be taken without a meeting, if all the mem-
bers of the Board of Directors or committee, as the case
may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the
Board of Directors or committee.
Section 9. Meetings by Means of Conference
Telephone. Unless otherwise provided by the Certificate
of Incorporation or these By-Laws, members of the Board
of Directors of the Corporation, or any committee desig-
nated by the Board of Directors, may participate in a
meeting of the Board of Directors or such committee by
means of a conference telephone or similar communications
equipment by means of which all persons participating in
the meeting can hear each other, and participation in a
meeting pursuant to this Section 9 shall constitute
presence in person at such meeting.
Section 10. Committees. The Board of Direc-
tors may, by resolution passed by a majority of the
entire Board of Directors, designate one or more commit-
tees, each committee to consist of one or more of the
directors of the Corporation. The Board of Directors may
designate one or more directors as alternate members of
any committee, who may replace any absent or disqualified
member at any meeting of any such committee. In the
absence or disqualification of a member of a committee,
and in the absence of a designation by the Board of
Directors of an alternate member to replace the absent or
disqualified member, the member or members thereof pres-
ent at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may unani-
mously appoint another member of the Board of Directors
to act at the meeting in the place of any absent or
disqualified member. Any committee, to the extent al-
lowed by law and provided in the resolution establishing
such committee, shall have and may exercise all the
powers and authority of the Board of Directors in the
management of the business and affairs of the Corpora-
tion. Each committee shall keep regular minutes and
report to the Board of Directors when required.
Section 11. Compensation. The directors may
be paid their expenses, if any, of attendance at each
meeting of the Board of Directors and may be paid a fixed
sum for attendance at each meeting of the Board of Direc-
tors or a stated salary as director. No such payment
shall preclude any director from serving the Corporation
in any other capacity and receiving compensation there-
for. Members of special or standing committees may be
allowed like compensation for attending committee meetings.
Section 12. Interested Directors. No contract
or transaction between the Corporation and one or more of
its directors or officers, or between the Corporation and
any other corporation, partnership, association, or other
organization in which one or more of its directors or
officers are directors or officers, or have a financial
interest, shall be void or voidable solely for this
reason, or solely because the director or officer is
present at or participates in the meeting of the Board of
Directors or committee thereof which authorizes the
contract or transaction, or solely because his or their
votes are counted for such purpose if (i) the material
facts as to his or their relationship or interest and as
to the contract or transaction are disclosed or are known
to the Board of Directors or the committee, and the Board
of Directors or committee in good faith authorizes the
contract or transaction by the affirmative votes of a
majority of the disinterested directors, even though the
disinterested directors be less than a quorum; or (ii)
the material facts as to his or their relationship or
interest and as to the contract or transaction are dis-
closed or are known to the stockholders entitled to vote
thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or
(iii) the contract or transaction is fair as to the
Corporation as of the time it is authorized, approved or
ratified, by the Board of Directors, a committee thereof
or the stockholders. Common or interested directors may
be counted in determining the presence of a quorum at a
meeting of the Board of Directors or of a committee which
authorizes the contract or transaction.
ARTICLE IV
OFFICERS
Section 1. General. The officers of the
Corporation shall be chosen by the Board of Directors and
shall be a President, a Secretary and a Treasurer. The
Board of Directors, in its discretion, may also choose a
Chairman of the Board of Directors (who must be a direc-
tor) and one or more Vice Presidents, Assistant Secretar-
ies, Assistant Treasurers and other officers. Any number
of offices may be held by the same person, unless other-
wise prohibited by law, the Certificate of Incorporation
or these By-Laws. The officers of the Corporation need
not be stockholders of the Corporation nor, except in the
case of the Chairman of the Board of Directors, need such
officers be directors of the Corporation.
Section 2. Election. The Board of Directors
at its first meeting held after each Annual Meeting of
Stockholders shall elect the officers of the Corporation
who shall hold their offices for such terms and shall
exercise such powers and perform such duties as shall be
determined from time to time by the Board of Directors;
and all officers of the Corporation shall hold office
until their successors are chosen and qualified, or until
their earlier resignation or removal. Any officer elect-
ed by the Board of Directors may be removed at any time
by the affirmative vote of a majority of the Board of
Directors. Any vacancy occurring in any office of the
Corporation shall be filled by the Board of Directors.
The salaries of all officers of the Corporation shall be
fixed by the Board of Directors.
Section 3. Voting Securities Owned by the
Corporation. Powers of attorney, proxies, waivers of
notice of meeting, consents and other instruments relat-
ing to securities owned by the Corporation may be execut-
ed in the name of and on behalf of the Corporation by the
President or any Vice President and any such officer may,
in the name of and on behalf of the Corporation, take all
such action as any such officer may deem advisable to
vote in person or by proxy at any meeting of security
holders of any corporation in which the Corporation may
own securities and at any such meeting shall possess and
may exercise any and all rights and power incident to the
ownership of such securities and which, as the owner
thereof, the Corporation might have exercised and pos-
sessed if present. The Board of Directors may, by reso-
lution, from time to time confer like powers upon any
other person or persons.
Section 4. Chairman of the Board of Directors.
The Chairman of the Board of Directors, if there be one,
shall preside at all meetings of the stockholders and of
the Board of Directors. He shall be the Chief Executive
Officer of the Corporation, and except where by law the
signature of the President is required, the Chairman of
the Board of Directors shall possess the same power as
the President to sign all contracts, certificates and
other instruments of the Corporation which may be autho-
rized by the Board of Directors. During the absence or
disability of the President, the Chairman of the Board of
Directors shall exercise all the powers and discharge all
the duties of the President. The Chairman of the Board
of Directors shall also perform such other duties and may
exercise such other powers as from time to time may be
assigned to him by these By-Laws or by the Board of
Directors.
Section 5. President. The President shall,
subject to the control of the Board of Directors and, if
there be one, the Chairman of the Board of Directors,
have general supervision of the business of the Corpora-
tion and shall see that all orders and resolutions of the
Board of Directors are carried into effect. He shall
execute all bonds, mortgages, contracts and other instru-
ments of the Corporation requiring a seal, under the seal
of the Corporation, except where required or permitted by
law to be otherwise signed and executed and except that
the other officers of the Corporation may sign and exe-
cute documents when so authorized by these By-Laws, the
Board of Directors or the President. In the absence or
disability of the Chairman of the Board of Directors, or
if there be none, the President shall preside at all
meetings of the stockholders and the Board of Directors.
If there be no Chairman of the Board of Directors, the
President shall be the Chief Executive Officer of the
Corporation. The President shall also perform such other
duties and may exercise such other powers as from time to
time may be assigned to him by these By-Laws or by the
Board of Directors.
Section 6. Vice Presidents. At the request of
the President or in his absence or in the event of his
inability or refusal to act (and if there be no Chairman
of the Board of Directors), the Vice President or the
Vice Presidents if there is more than one (in the order
designated by the Board of Directors) shall perform the
duties of the President, and when so acting, shall have
all the powers of and be subject to all the restrictions
upon the President. Each Vice President shall perform
such other duties and have such other powers as the Board
of Directors from time to time may prescribe. If there
be no Chairman of the Board of Directors and no Vice
President, the Board of Directors shall designate the
officer of the Corporation who, in the absence of the
President or in the event of the inability or refusal of
the President to act, shall perform the duties of the
President, and when so acting, shall have all the powers
of and be subject to all the restrictions upon the Presi-
dent.
Section 7. Secretary. The Secretary shall
attend all meetings of the Board of Directors and all
meetings of stockholders and record all the proceedings
thereat in a book or books to be kept for that purpose;
the Secretary shall also perform like duties for the
standing committees when required. The Secretary shall
give, or cause to be given, notice of all meetings of the
stockholders and special meetings of the Board of Direc-
tors, and shall perform such other duties as may be
prescribed by the Board of Directors or President, under
whose supervision he shall be. If the Secretary shall be
unable or shall refuse to cause to be given notice of all
meetings of the stockholders and special meetings of the
Board of Directors, and if there be no Assistant Secre-
tary, then either the Board of Directors or the President
may choose another officer to cause such notice to be
given. The Secretary shall have custody of the seal of
the Corporation and the Secretary or any Assistant Secre-
tary, if there be one, shall have authority to affix the
same to any instrument requiring it and when so affixed,
it may be attested by the signature of the Secretary or
by the signature of any such Assistant Secretary. The
Board of Directors may give general authority to any
other officer to affix the seal of the Corporation and to
attest the affixing by his signature. The Secretary
shall see that all books, reports, statements, certifi-
cates and other documents and records required by law to
be kept or filed are properly kept or filed, as the case
may be.
Section 8. Treasurer. The Treasurer shall
have the custody of the corporate funds and securities
and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation and
shall deposit all moneys and other valuable effects in
the name and to the credit of the Corporation in such
depositories as may be designated by the Board of Direc-
tors. The Treasurer shall disburse the funds of the
Corporation as may be ordered by the Board of Directors,
taking proper vouchers for such disbursements, and shall
render to the President and the Board of Directors, at
its regular meetings, or when the Board of Directors so
requires, an account of all his transactions as Treasurer
and of the financial condition of the Corporation. If
required by the Board of Directors, the Treasurer shall
give the Corporation a bond in such sum and with such
surety or sureties as shall be satisfactory to the Board
of Directors for the faithful performance of the duties
of his office and for the restoration to the Corporation,
in case of his death, resignation, retirement or removal
from office, of all books, papers, vouchers, money and
other property of whatever kind in his possession or
under his control belonging to the Corporation.
Section 9. Assistant Secretaries. Except as
may be otherwise provided in these By-Laws, Assistant
Secretaries, if there be any, shall perform such duties
and have such powers as from time to time may be assigned
to them by the Board of Directors, the President, any
Vice President, if there be one, or the Secretary, and in
the absence of the Secretary or in the event of his
disability or refusal to act, shall perform the duties of
the Secretary, and when so acting, shall have all the
powers of and be subject to all the restrictions upon the
Secretary.
Section 10. Assistant Treasurers. Assistant
Treasurers, if there be any, shall perform such duties
and have such powers as from time to time may be assigned
to them by the Board of Directors, the President, any
Vice President, if there be one, or the Treasurer, and in
the absence of the Treasurer or in the event of his
disability or refusal to act, shall perform the duties of
the Treasurer, and when so acting, shall have all the
powers of and be subject to all the restrictions upon the
Treasurer. If required by the Board of Directors, an
Assistant Treasurer shall give the Corporation a bond in
such sum and with such surety or sureties as shall be
satisfactory to the Board of Directors for the faithful
performance of the duties of his office and for the
restoration to the Corporation, in case of his death,
resignation, retirement or removal from office, of all
books, papers, vouchers, money and other property of
whatever kind in his possession or under his control
belonging to the Corporation.
Section 11. Other Officers. Such other offi-
cers as the Board of Directors may choose shall perform
such duties and have such powers as from time to time may
be assigned to them by the Board of Directors. The Board
of Directors may delegate to any other officer of the
Corporation the power to choose such other officers and
to prescribe their respective duties and powers.
ARTICLE V
STOCK
Section 1. Form of Certificates. Every holder
of stock in the Corporation shall be entitled to have a
certificate signed, in the name of the Corporation (i) by
the Chairman of the Board of Directors, the President or
a Vice President and (ii) by the Treasurer or an Assis-
tant Treasurer, or the Secretary or an Assistant Secre-
tary of the Corporation, certifying the number of shares
owned by him in the Corporation.
Section 2. Signatures. Any or all of the
signatures on a certificate may be a facsimile. In case
any officer, transfer agent or registrar who has signed
or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, trans-
fer agent or registrar before such certificate is issued,
it may be issued by the Corporation with the same effect
as if he were such officer, transfer agent or registrar
at the date of issue.
Section 3. Lost Certificates. The Board of
Directors may direct a new certificate to be issued in
place of any certificate theretofore issued by the Corpo-
ration alleged to have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the
person claiming the certificate of stock to be lost,
stolen or destroyed. When authorizing such issue of a
new certificate, the Board of Directors may, in its
discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or de-
stroyed certificate, or his legal representative, to
advertise the same in such manner as the Board of Direc-
tors shall require and/or to give the Corporation a bond
in such sum as it may direct as indemnity against any
claim that may be made against the Corporation with
respect to the certificate alleged to have been lost,
stolen or destroyed.
Section 4. Transfers. Stock of the Corpora-
tion shall be transferable in the manner prescribed by
law and in these By-Laws. Transfers of stock shall be
made on the books of the Corporation only by the person
named in the certificate or by his attorney lawfully
constituted in writing and upon the surrender of the
certificate therefor, which shall be cancelled before a
new certificate shall be issued.
Section 5. Record Date. In order that the
Corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders or
any adjournment thereof, or entitled to express consent
to corporate action in writing without a meeting, or
entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion
or exchange of stock, or for the purpose of any other
lawful action, the Board of Directors may fix, in ad-
vance, a record date, which shall not be more than sixty
days nor less than ten days before the date of such
meeting, nor more than sixty days prior to any other
action. A determination of stockholders of record enti-
tled to notice of or to vote at a meeting of stockholders
shall apply to any adjournment of the meeting; provided,
however, that the Board of Directors may fix a new record
date for the adjourned meeting.
Section 6. Beneficial Owners. The Corporation
shall be entitled to recognize the exclusive right of a
person registered on its books as the owner of shares to
receive dividends, and to vote as such owner, and to hold
liable for calls and assessments a person registered on
its books as the owner of shares, and shall not be bound
to recognize any equitable or other claim to or interest
in such share or shares on the part of any other person,
whether or not it shall have express or other notice
thereof, except as otherwise provided by law.
ARTICLE VI
NOTICES
Section 1. Notices. Whenever written notice
is required by law, the Certificate of Incorporation or
these By-Laws, to be given to any director, member of a
committee or stockholder, such notice may be given by
mail, addressed to such director, member of a committee
or stockholder, at his address as it appears on the
records of the Corporation, with postage thereon prepaid,
and such notice shall be deemed to be given at the time
when the same shall be deposited in the United States
mail. Written notice may also be given personally or by
telegram, telex or cable.
Section 2. Waivers of Notice. Whenever any
notice is required by law, the Certificate of Incorpora-
tion or these By-Laws, to be given to any director,
member of a committee or stockholder, a waiver thereof in
writing, signed, by the person or persons entitled to
said notice, whether before or after the time stated
therein, shall be deemed equivalent thereto.
ARTICLE VII
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the
capital stock of the Corporation, subject to the provi-
sions of the Certificate of Incorporation, if any, may be
declared by the Board of Directors at any regular or
special meeting, and may be paid in cash, in property, or
in shares of the capital stock. Before payment of any
dividend, there may be set aside out of any funds of the
Corporation available for dividends such sum or sums as
the Board of Directors from time to time, in its absolute
discretion, deems proper as a reserve or reserves to meet
contingencies, or for equalizing dividends, or for re-
pairing or maintaining any property of the Corporation,
or for any proper purpose, and the Board of Directors may
modify or abolish any such reserve.
Section 2. Disbursements. All checks or
demands for money and notes of the Corporation shall be
signed by such officer or officers or such other person
or persons as the Board of Directors may from time to
time designate.
Section 3. Fiscal Year. The fiscal year of
the Corporation shall be fixed by resolution of the Board
of Directors.
Section 4. Corporate Seal. The corporate seal
shall have inscribed thereon the name of the Corporation,
the year of its organization and the words "Corporate
Seal, Delaware". The seal may be used by causing it or a
facsimile thereof to be impressed or affixed or repro-
duced or otherwise.
ARTICLE VIII
INDEMNIFICATION
Section 1. Power to Indemnify in Actions,
Suits or Proceedings other Than Those by or in the Right
of the Corporation. Subject to Section 3 of this Article
VIII, the Corporation shall indemnify any person who was
or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceed-
ing, whether civil, criminal, administrative or investi-
gative (other than an action by or in the right of the
Corporation) by reason of the fact that he is or was a
director or officer of the Corporation, or is or was a
director or officer of the Corporation serving at the
request of the Corporation as a director or officer,
employee or agent of another corporation, partnership,
joint venture, trust, employee benefit plan or other
enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and
in a manner he reasonably believed to be in or not op-
posed to the best interests of the Corporation, and, with
respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea
of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act
in good faith and in a manner which he reasonably be-
lieved to be in or not opposed to the best interests of
the Corporation, and, with respect to any criminal action
or proceeding, had reasonable cause to believe that his
conduct was unlawful.
Section 2. Power to Indemnify in Actions,
Suits or Proceedings by or in the Right of the Corpora-
tion. Subject to Section 3 of this Article VIII, the
Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threat-
ened, pending or completed action or suit by or in the
right of the Corporation to procure a judgment in its
favor by reason of the fact that he is or was a director
or officer of the Corporation, or is or was a director or
officer of the Corporation serving at the request of the
Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise against expens-
es (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settle-
ment of such action or suit if he acted in good faith and
in a manner he reasonably believed to be in or not op-
posed to the best interests of the Corporation; except
that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have
been adjudged to be liable 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 upon application that, despite the adjudication
of liability but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery
or such other court shall deem proper.
Section 3. Authorization of Indemnification.
Any indemnification under this Article VIII (unless
ordered by a court) shall be made by the Corporation only
as authorized in the specific case upon a determination
that indemnification of the director or officer is proper
in the circumstances because he has met the applicable
standard of conduct set forth in Section 1 or Section 2
of this Article VIII, as the case may be. Such determi-
nation shall be made (i) by a majority vote of the direc-
tors who are not parties to such action, suit or proceed-
ing, even though less than a quorum, or (ii) if such a
quorum is not obtainable, or even if obtainable a quorum
of disinterested directors so direct, by independent
legal counsel in a written opinion, or (iii) by the
stockholders. To the extent, however, that a director or
officer of the Corporation has been successful on the
merits or otherwise in defense of any action, suit or
proceeding described above, or in defense of any claim,
issue or matter therein, he shall be indemnified against
expenses (including attorneys' fees) actually and reason-
ably incurred by him in connection therewith, without the
necessity of authorization in the specific case.
Section 4. Good Faith Defined. For purposes
of any determination under Section 3 of this Article
VIII, a person shall be deemed to have acted in good
faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the Corporation, or,
with respect to any criminal action or proceeding, to
have had no reasonable cause to believe his conduct was
unlawful, if his action is based on the records or books
of account of the Corporation or another enterprise, or
on information supplied to him by the officers of the
Corporation or another enterprise in the course of their
duties, or on the advice of legal counsel for the Corpo-
ration or another enterprise or on information or records
given or reports made to the Corporation or another
enterprise by an independent certified public accountant
or by an appraiser or other expert selected with reason-
able care by the Corporation or another enterprise. The
term "another enterprise" as used in this Section 4 shall
mean any other corporation or any partnership, joint
venture, trust, employee benefit plan or other enterprise
of which such person is or was serving at the request of
the Corporation as a director, officer, employee or
agent. The provisions of this Section 4 shall not be
deemed to be exclusive or to limit in any way the circum-
stances in which a person may be deemed to have met the
applicable standard of conduct set forth in Sections 1 or
2 of this Article VIII, as the case may be.
Section 5. Indemnification by a Court. Not-
withstanding any contrary determination in the specific
case under Section 3 of this Article VIII, and notwith-
standing the absence of any determination thereunder, any
director or officer may apply to any court of competent
jurisdiction in the State of Delaware for indemnification
to the extent otherwise permissible under Sections 1 and
2 of this Article VIII. The basis of such indemnifica-
tion by a court shall be a determination by such court
that indemnification of the director or officer is proper
in the circumstances because he has met the applicable
standards of conduct set forth in Sections 1 or 2 of this
Article VIII, as the case may be. Neither a contrary
determination in the specific case under Section 3 of
this Article VIII nor the absence of any determination
thereunder shall be a defense to such application or
create a presumption that the director or officer seeking
indemnification has not met any applicable standard of
conduct. Notice of any application for indemnification
pursuant to this Section 5 shall be given to the Corpora-
tion promptly upon the filing of such application. If
successful, in whole or in part, the director or officer
seeking indemnification shall also be entitled to be paid
the expense of prosecuting such application.
Section 6. Expenses Payable in Advance.
Expenses incurred by a director or officer in defending
or investigating a threatened or pending action, suit or
proceeding shall be paid by the Corporation in advance of
the final disposition of such action, suit or proceeding
upon receipt of an undertaking by or on behalf of such
director or officer to repay such amount if it shall
ultimately be determined that he is not entitled to be
indemnified by the Corporation as authorized in this Article VIII.
Section 7. Nonexclusivity of Indemnification
and Advancement of Expenses. The indemnification and
advancement of expenses provided by or granted pursuant
to this Article VIII shall not be deemed exclusive of any
other rights to which those seeking indemnification or
advancement of expenses may be entitled under any By-Law,
agreement, contract, vote of stockholders or disinterest-
ed directors or pursuant to the direction (howsoever
embodied) of any court of competent jurisdiction or
otherwise, both as to action in his official capacity and
as to action in another capacity while holding such
office, it being the policy of the Corporation that
indemnification of the persons specified in Sections 1
and 2 of this Article VIII shall be made to the fullest
extent permitted by law. The provisions of this Article
VIII shall not be deemed to preclude the indemnification
of any person who is not specified in Sections 1 or 2 of
this Article VIII but whom the Corporation has the power
or obligation to indemnify under the provisions of the
General Corporation Law of the State of Delaware, or
otherwise.
Section 8. Insurance. The Corporation may
purchase and maintain insurance on behalf of any person
who is or was a director or officer of the Corporation,
or is or was a director or officer of the Corporation
serving at the request of the Corporation as a director,
officer, employee or agent of another corporation, part-
nership, joint venture, trust, employee benefit plan or
other enterprise against any liability asserted against
him and incurred by him in any such capacity, or arising
out of his status as such, whether or not the Corporation
would have the power or the obligation to indemnify him
against such liability under the provisions of this
Article VIII.
Section 9. Certain Definitions. For purposes
of this Article VIII, references to "the Corporation"
shall include, in addition to the resulting corporation,
any constituent corporation (including any constituent of
a constituent) absorbed in a consolidation or merger
which, if its separate existence had continued, would
have had power and authority to indemnify its directors
or officers, so that any person who is or was a director
or officer of such constituent corporation, or is or was
a director or officer of such constituent corporation
serving at the request of such constituent corporation as
a director, officer, employee or agent of another corpo-
ration, partnership, joint venture, trust, employee
benefit plan or other enterprise, shall stand in the same
position under the provisions of this Article VIII with
respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation
if its separate existence had continued. For purposes of
this Article VIII, references to "fines" shall include
any excise taxes assessed on a person with respect to an
employee benefit plan; and references to "serving at the
request of the Corporation" shall include any service as
a director, officer, employee or agent of the Corporation
which imposes duties on, or involves services by, such
director or officer with respect to an employee benefit
plan, its participants or beneficiaries; and a person who
acted in good faith and in a manner he reasonably be-
lieved to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed
to have acted in a manner "not opposed to the best inter-
ests of the Corporation" as referred to in this Article
VIII.
Section 10. Survival of Indemnification and
Advancement of Expenses. The indemnification and ad-
vancement of expenses provided by, or granted pursuant
to, this Article VIII shall, unless otherwise provided
when authorized or ratified, continue as to a person who
has ceased to be a director or officer and shall inure to
the benefit of the heirs, executors and administrators of
such a person.
Section 11. Limitation on Indemnification.
Notwithstanding anything contained in this Article VIII
to the contrary, except for proceedings to enforce rights
to indemnification (which shall be governed by Section 5
hereof), the Corporation shall not be obligated to indem-
nify any director or officer in connection with a pro-
ceeding (or part thereof) initiated by such person unless
such proceeding (or part thereof) was authorized or
consented to by the Board of Directors of the Corporation.
Section 12. Indemnification of Employees and
Agents. The Corporation may, to the extent authorized
from time to time by the Board of Directors, provide
rights to indemnification and to the advancement of
expenses to employees and agents of the Corporation
similar to those conferred in this Article VIII to direc-
tors and officers of the Corporation.
ARTICLE IX
AMENDMENTS
Section 1. Amendments. The By-Laws may be
altered, amended or repealed, in whole or in part, or new
By-Laws may be adopted by the stockholders or by the
Board of Directors, provided, however, that notice of
such alteration, amendment, repeal or adoption of new By-
Laws be contained in the notice of such meeting of stock-
holders or Board of Directors as the case may be. All
such alterations, amendments or repeals must be approved
by an affirmative vote of the holders of at least two-
thirds of the outstanding shares of capital stock enti-
tled to vote thereon or by a majority of the entire Board
of Directors then in office, except that any amendment of
(i) Sections 2 and 6 of Article II, (ii) Sections 1, 2
and 3 of Article III and (iii) Article VIII shall require
the affirmative vote of the holders of at least 80% of
the outstanding shares of capital stock entitled to vote
thereon.
Section 2. Entire Board of Directors. As used
in this Article IX and in these By-Laws generally, the
term "entire Board of Directors" means the total number
of directors which the Corporation would have if there
were no vacancies.
CERTIFICATE OF MERGER
OF
MWC HOLDINGS, INC.
INTO
HAYES WHEELS INTERNATIONAL, INC.
Pursuant to Section 251(c) of the General
Corporation Law of the State of Delaware
Hayes Wheels International, Inc., a Delaware
corporation, does hereby certify to the following facts
relating to the merger of MWC Holdings, Inc. into Hayes
Wheels International, Inc. (the "Merger"):
FIRST: The names and states of incorporation
of the constituent corporations to the Merger are as
follows:
Name State
MWC Holdings, Inc. Delaware
Hayes Wheels International, Inc. Delaware
SECOND: An Agreement and Plan of Merger, dated
as of March 28, 1996 (the "Merger Agreement"), has been
approved, adopted, certified, executed and acknowledged
by each of the constituent corporations in accordance
with Section 251 of the General Corporation Law of the
State of Delaware.
THIRD: The name of the corporation surviving
the Merger is Hayes Wheels International, Inc. (the
"Surviving Corporation").
FOURTH: The text of the Restated Certificate
of Incorporation of the Surviving Corporation as it shall
be amended in its entirety at the effective time of the
Merger is set forth as Exhibit A to this Certificate of
Merger.
FIFTH: An executed copy of the Merger Agree-
ment is on file at the principal place of business of the
Surviving Corporation, 38481 Huron River Drive, Romulus,
Michigan 48174. A copy of the Merger Agreement will be
furnished upon request and without cost to any stockhold-
er of either constituent corporation.
IN WITNESS WHEREOF, Hayes Wheels International,
Inc. has caused this Certificate of Merger to be executed
in its corporate name this 2nd day of July, 1996.
HAYES WHEELS INTERNATIONAL, INC.
By: /s/ Daniel M. Sandberg
Name: Daniel M. Sandberg
Title: Vice President, General
Counsel and Secretary
HAYES WHEELS INTERNATIONAL, INC
THE GUARANTORS
and
COMERICA BANK, as Trustee
INDENTURE
Dated as of July 2, 1996
250,000,000
11% Senior Subordinated Notes due 2006
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
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
N.A. means Not Applicable
NOTE: This Cross-Reference Table shall not, for any purpose,
be deemed to be a part of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions . . . . . . . . . . . . . . . . 1
Section 1.02. Other Definitions . . . . . . . . . . . . . 21
Section 1.03. Incorporation by Reference of Trust
Indenture Act . . . . . . . . . . . . . . 22
Section 1.04. Rules of Construction . . . . . . . . . . . 22
ARTICLE 2
THE NOTES
Section 2.01. Form and Dating . . . . . . . . . . . . . . 23
Section 2.02. Execution and Authentication . . . . . . . . 23
Section 2.03. Registrar and Paying Agent . . . . . . . . . 24
Section 2.04. Paying Agent To Hold Assets in Trust . . . . 24
Section 2.05. Noteholder Lists . . . . . . . . . . . . . . 25
Section 2.06. Transfer and Exchange . . . . . . . . . . . 25
Section 2.07. Replacement Notes . . . . . . . . . . . . . 26
Section 2.08. Outstanding Notes . . . . . . . . . . . . . 26
Section 2.09. Temporary Notes . . . . . . . . . . . . . . 27
Section 2.10. Cancellation . . . . . . . . . . . . . . . . 27
Section 2.11. Defaulted Interest . . . . . . . . . . . . . 27
Section 2.12. Deposit of Moneys . . . . . . . . . . . . . 27
Section 2.13. CUSIP Number . . . . . . . . . . . . . . . . 28
ARTICLE 3
REDEMPTION
Section 3.01. Notices to Trustee . . . . . . . . . . . . . 28
Section 3.02. Selection by Trustee of Notes To Be
Redeemed . . . . . . . . . . . . . . . . . 28
Section 3.03. Notice of Redemption . . . . . . . . . . . . 29
Section 3.04. Effect of Notice of Redemption . . . . . . . 30
Section 3.05. Deposit of Redemption Price . . . . . . . . 30
Section 3.06. Notes Redeemed in Part . . . . . . . . . . . 30
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes . . . . . . . . . . . . . . 31
Section 4.02. SEC Reports . . . . . . . . . . . . . . . . 31
Section 4.03. Waiver of Stay, Extension or Usury
Laws . . . . . . . . . . . . . . . . . . . 31
Section 4.04. Compliance Certificate . . . . . . . . . . . 32
Section 4.05. Payment of Taxes and Other Claims . . . . . 33
Section 4.06. Maintenance of Properties and
Insurance . . . . . . . . . . . . . . . . 33
Section 4.07. Compliance with Laws . . . . . . . . . . . . 34
Section 4.08. Corporate Existence . . . . . . . . . . . . 34
Section 4.09. Maintenance of Office or Agency . . . . . . 34
Section 4.10. Limitation on Additional Indebtedness . . . 35
Section 4.11. Limitation on Foreign Indebtedness . . . . . 36
Section 4.12. Limitation on Common Stock of
Subsidiaries . . . . . . . . . . . . . . . 37
Section 4.13. Limitation on Restricted Payments . . . . . 38
Section 4.14. Limitation on Other Senior
Subordinated Debt . . . . . . . . . . . . 39
Section 4.15. Limitation on Certain Asset Sales . . . . . 40
Section 4.16. Limitation on Transactions with
Affiliates . . . . . . . . . . . . . . . . 42
Section 4.17. Limitations on Liens . . . . . . . . . . . . 43
Section 4.18. Limitations on Creation of
Subsidiaries . . . . . . . . . . . . . . . 44
Section 4.19. Payments for Consent . . . . . . . . . . . . 44
Section 4.20. Change of Control . . . . . . . . . . . . . 44
ARTICLE 5
SUCCESSOR CORPORATION
Section 5.01. Limitation on Consolidation, Merger
and Sale of Assets . . . . . . . . . . . . 47
Section 5.02. Successor Person Substituted . . . . . . . . 48
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default . . . . . . . . . . . . . 49
Section 6.02. Acceleration . . . . . . . . . . . . . . . . 50
Section 6.03. Other Remedies . . . . . . . . . . . . . . . 51
Section 6.04. Waiver of Past Defaults and Events of
Default . . . . . . . . . . . . . . . . . 52
Section 6.05. Control by Majority . . . . . . . . . . . . 52
Section 6.06. Limitation on Suits . . . . . . . . . . . . 52
Section 6.07. Rights of Holders To Receive Payment . . . . 53
Section 6.08. Collection Suit by Trustee . . . . . . . . . 53
Section 6.09. Trustee May File Proofs of Claim . . . . . . 53
Section 6.10. Priorities . . . . . . . . . . . . . . . . . 54
Section 6.11. Undertaking for Costs . . . . . . . . . . . 54
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee . . . . . . . . . . . . . 55
Section 7.02. Rights of Trustee . . . . . . . . . . . . . 56
Section 7.03. Individual Rights of Trustee . . . . . . . . 57
Section 7.04. Trustee's Disclaimer . . . . . . . . . . . . 57
Section 7.05. Notice of Default . . . . . . . . . . . . . 57
Section 7.06. Reports by Trustee to Holders . . . . . . . 58
Section 7.07. Compensation and Indemnity . . . . . . . . . 58
Section 7.08. Replacement of Trustee . . . . . . . . . . . 59
Section 7.09. Successor Trustee by Consolidation,
Merger or Conversion . . . . . . . . . . . 60
Section 7.10. Eligibility; Disqualification . . . . . . . 60
Section 7.11. Preferential Collection of Claims
Against Company . . . . . . . . . . . . . 60
Section 7.12. Paying Agents . . . . . . . . . . . . . . . 60
ARTICLE 8
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 8.01. Without Consent of Holders . . . . . . . . . 61
Section 8.02. With Consent of Holders . . . . . . . . . . 62
Section 8.03. Compliance with Trust Indenture Act . . . . 63
Section 8.04. Revocation and Effect of Consents . . . . . 63
Section 8.05. Notation on or Exchange of Notes . . . . . . 64
Section 8.06. Trustee To Sign Amendments, etc. . . . . . . 64
ARTICLE 9
DISCHARGE OF INDENTURE; DEFEASANCE
Section 9.01. Discharge of Indenture . . . . . . . . . . . 65
Section 9.02. Legal Defeasance . . . . . . . . . . . . . . 65
Section 9.03. Covenant Defeasance . . . . . . . . . . . . 66
Section 9.04. Conditions to Defeasance or Covenant
Defeasance . . . . . . . . . . . . . . . . 66
Section 9.05. Deposited Money and U.S. Government
Obligations To Be Held in Trust;
Other Miscellaneous Provisions . . . . . . 69
Section 9.06. Reinstatement . . . . . . . . . . . . . . . 69
Section 9.07. Moneys Held by Paying Agent . . . . . . . . 70
Section 9.08. Moneys Held by Trustee . . . . . . . . . . . 70
ARTICLE 10
GUARANTEE OF NOTES
Section 10.01. Guarantee . . . . . . . . . . . . . . . . . 71
Section 10.02. Execution and Delivery of Guarantees . . . . 72
Section 10.03. Limitation of Guarantee . . . . . . . . . . 73
Section 10.04. Additional Guarantors . . . . . . . . . . . 73
Section 10.05. Release of Guarantor . . . . . . . . . . . . 73
Section 10.06. Guarantee Obligations Subordinated to
Guarantor Senior Indebtedness . . . . . . 74
Section 10.07. Payment Over of Proceeds upon
Dissolution, etc., of a Guarantor . . . . 74
Section 10.08. Suspension of Guarantee Obligations
When Guarantor Senior Indebtedness in
Default . . . . . . . . . . . . . . . . . 76
Section 10.09. Subrogation to Rights of Holders of
Guarantor Senior Indebtedness . . . . . . 78
Section 10.10. Guarantee Subordination Provisions
Solely To Define Relative Rights . . . . . 79
Section 10.11. Application of Certain Article 11
Provisions . . . . . . . . . . . . . . . . 80
ARTICLE 11
SUBORDINATION OF NOTES
Section 11.01. Notes Subordinate to Senior
Indebtedness . . . . . . . . . . . . . . . 80
Section 11.02. Payment Over of Proceeds upon
Dissolution, etc. . . . . . . . . . . . . 81
Section 11.03. Suspension of Payment When Senior
Indebtedness in Default . . . . . . . . . 82
Section 11.04. Trustee's Relation to Senior
Indebtedness . . . . . . . . . . . . . . . 85
Section 11.05. Subrogation to Rights of Holders of
Senior Indebtedness . . . . . . . . . . . 85
Section 11.06. Provisions Solely To Define Relative
Rights . . . . . . . . . . . . . . . . . . 86
Section 11.07. Trustee To Effectuate Subordination . . . . 86
Section 11.08. No Waiver of Subordination Provisions . . . 87
Section 11.09. Notice to Trustee . . . . . . . . . . . . . 88
Section 11.10. Reliance on Judicial Order or
Certificate of Liquidating Agent . . . . . 88
Section 11.11. Rights of Trustee as a Holder of
Senior Indebtedness; Preservation
of Trustee's Rights . . . . . . . . . . . 89
Section 11.12. Article Applicable to Paying Agents . . . . 89
Section 11.13. No Suspension of Remedies . . . . . . . . . 89
ARTICLE 12
MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls . . . . . . . . 90
Section 12.02. Notices . . . . . . . . . . . . . . . . . . 90
Section 12.03. Communications by Holders with Other
Holders . . . . . . . . . . . . . . . . . 91
Section 12.04. Certificate and Opinion as to
Conditions Precedent . . . . . . . . . . . 91
Section 12.05. Statements Required in Certificate
and Opinion . . . . . . . . . . . . . . . 92
Section 12.06. When Treasury Notes Disregarded . . . . . . 92
Section 12.07. Rules by Trustee and Agents . . . . . . . . 93
Section 12.08. Business Days; Legal Holidays . . . . . . . 93
Section 12.09. Governing Law . . . . . . . . . . . . . . . 93
Section 12.10. No Adverse Interpretation of Other
Agreements . . . . . . . . . . . . . . . . 93
Section 12.11. No Recourse Against Others . . . . . . . . . 93
Section 12.12. Successors . . . . . . . . . . . . . . . . . 94
Section 12.13. Multiple Counterparts . . . . . . . . . . . 94
Section 12.14. Table of Contents, Headings, etc. . . . . . 94
Section 12.15. Separability . . . . . . . . . . . . . . . . 94
EXHIBITS
Exhibit A. Form of Note . . . . . . . . . . . . . . . A-1
INDENTURE, dated as of July 2, 1996, among HAYES WHEELS
INTERNATIONAL, INC., a Delaware corporation, as Issuer (the
"Company"), the GUARANTORS (as hereinafter defined), and COMERICA
BANK, a Michigan 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 11% Senior Subordinated Notes due 2006
(the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.
"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 consoli-
dated 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 liabili-
ties, including, without limitation, contingent liabilities
(after giving effect to all other fixed and contingent liabili-
ties (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 Guaran-
tee), 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 interme-
diaries controls, or is controlled by, or is under common control
with, such specified Person. For the purposes of this defini-
tion, "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, direct-
ly 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.
"Argosy" means CIBC WG Argosy Merchant Fund 2, L.L.C.
"Asset Sale" means the sale, transfer or other disposi-
tion 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 Subsid-
iary, (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 Subsid-
iary from such Asset Sale (including cash received as consider-
ation 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, underwrit-
ing 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 liabil-
ities related to environmental matters or against any indemnifi-
cation 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 Subsid-
iary from such Asset Sale or other disposition upon the liquida-
tion 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 remain-
ing 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 NH, 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) or (iii)(B) of Section 4.15(a) and which have not been
the basis for an Excess Proceeds Offer in accordance with clause
(iii)(C) 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 certi-
fied 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 capital-
ized amount of such obligations determined in accordance with
GAAP.
"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 Ex-
change 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 consol-
idation or merger hold, directly or indirectly, at least a
majority of the Common Stock of the surviving corporation immedi-
ately 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 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 elec-
tion 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 divi-
dends 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 Agree-
ments, (iv) the interest portion of any deferred payment obliga-
tion, (v) amortization of discount or premium, if any, and (vi)
all other non-cash interest expense (other than interest amor-
tized to cost of sales)) plus, all net capitalized interest for
such period and all interest paid under any guarantee of Indebt-
edness (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) of such Person and its Subsidiaries
for such period, on a consolidated basis, determined in accor-
dance 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 transac-
tion for any period prior to the date of such acquisition and (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.
"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 411 W. Lafay-
ette, Detroit, Michigan 48226-3461.
"Credit Agreement" means the Credit Agreement, to be
dated as of a date on or prior to the Issue Date, among the
Company, Canadian Imperial Bank of Commerce, as administrative
agent, Merrill Lynch Capital Corporation, 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 original Credit Agreement or other credit agreements or
otherwise).
"Default" means any event that is, or with the passing
of time or giving of notice or both would be, an Event of De-
fault.
"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 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 (x) which is specifically designated in the instru-
ment evidencing such Senior Indebtedness as "Designated Senior
Indebtedness" by such Person and (y) 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 convert-
ible or for which it is exchangeable at the option of the hold-
er), or upon the happening of any event, matures or is mandatori-
ly redeemable, pursuant to a sinking fund obligation or other-
wise, 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, howev-
er, that Preferred Stock of the Company or any Restricted Subsid-
iary 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 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) amorti-
zation 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 calcula-
tion 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 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.
"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 determina-
tion 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, and
Hayes Wheels International-Michigan, Inc., a Michigan 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" as to any Guarantor,
means the principal of and premium, if any, and interest (includ-
ing, 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 consti-
tutes an allowable claim in such proceeding) on, and any and all
other fees, charges, expense reimbursement obligations, indemni-
ties and other amounts due pursuant to the terms of all agree-
ments, documents and instruments providing for, creating, secur-
ing, guaranteeing or evidencing or otherwise entered into in
connection with, (a) such Guarantor's guarantee of all obliga-
tions, whether outstanding on the Issue Date or thereafter
incurred, of the Company, in each case, owed to lenders under or
in respect of the Credit Agreement, (b) all obligations of such
Guarantor with respect to any Interest Rate Agreement, (c) all
obligations of 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 Indebted-
ness 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 and 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 Guarantees, (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 other-
wise 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 Indebted-
ness.
"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 limita-
tion, 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 accor-
dance with GAAP) and (vii) Attributable Indebtedness. The amount
of Indebtedness of any Person at any date shall be the outstand-
ing 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 accordance 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 Subsidiar-
ies 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.
"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 de-
signed to protect the party indicated therein against fluctua-
tions 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.
"Lien" means, with respect to any Property of any
Person, any mortgage or deed of trust, pledge, hypothecation,
deposit arrangement, security interest, lien, charge, encum-
brance, 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).
"Maturity Date" means July 15, 2006.
"Moody's" means Moody's Investors Service, Inc. and its
successors.
"Motor Wheel" means Motor Wheel Corporation, an Ohio
corporation, and a Wholly Owned Subsidiary of MWC Holdings, Inc.,
a Delaware corporation.
"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 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.
"Notes" means the securities that are issued under this
Indenture, as amended or supplemented from time to time pursuant
to this Indenture.
"Obligations" means, with respect to any Indebtedness,
any principal, premium, interest, penalties, fees, indemnifica-
tions, reimbursements, damages and other expenses payable under
the documentation governing such Indebtedness.
"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 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.
"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 Re-
stricted Subsidiary arising under or in respect of the
Credit Agreement in an aggregate amount not to exceed
$645,000,000, less any mandatory prepayments actually made
thereunder (to the extent, in the case of payments of re-
volving credit Indebtedness, that the corresponding commit-
ments have been permanently reduced) or scheduled payments
actually made thereunder;
(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-
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 Re-
stricted 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 In-
debtedness 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 aggre-
gate principal amount outstanding at any time;
(x) Refinancing Indebtedness; and
(xi) Indebtedness incurred in accordance with Sec-
tion 4.11.
"Permitted Investments" means, for any Person, Invest-
ments 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 substan-
tially all of its assets to, or is liquidated into, the
Company or a Restricted Subsidiary thereof;
(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 para-
graph of Section 4.13;
(vii) Investments received in connection with the bank-
ruptcy 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, partner-
ship, 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 liquida-
tion 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.
"Redemption Date" when used with respect to any Note to
be redeemed means the date fixed for such redemption pursuant to
this Indenture.
"Refinancing Indebtedness" means Indebtedness that
refunds, refinances or extends any Indebtedness of the Company or
its Subsidiaries outstanding on the Issue Date or other Indebted-
ness 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 sched-
uled 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 Indebted-
ness 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 Indebted-
ness 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, refi-
nance or extend Indebtedness of the Company arising under or in
respect of the Credit Agreement in an aggregate amount not to
exceed $20,000,000 outstanding at any time; and provided, fur-
ther, 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 limita-
tion on the payment of dividends or the making of other distribu-
tions then the Refinancing Indebtedness shall not contain any
such limitation or restriction.
"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 offi-
cers 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 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 distribu-
tions 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 Indebt-
edness 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 Subsid-
iary 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 Indebted-
ness) pursuant to Section 4.10.
"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,
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 instru-
ments providing for, creating, securing, guaranteeing or evidenc-
ing or otherwise entered into in connection with (a) all obliga-
tions, whether outstanding on the Issue Date or thereafter
incurred, of the Company owed to lenders under or in respect of
the 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, exten-
sions, 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 and the Guarantees,
(iii) any Indebtedness which by the express terms of the agree-
ment 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 corpora-
tion, 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 state-
ment purposes; provided that Autokola which shall not be consid-
ered a Subsidiary of the Company until such time as the Company
acquires a majority interest therein.
"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 Colum-
bia, 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 Subsid-
iary, Investments: (a) in direct obligations of the sovereign
nation (or any agency thereof) in which such non-Domestic Re-
stricted Subsidiary is organized and is conducting business or in
obligations fully and unconditionally guaranteed by such sover-
eign 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) Invest-
ments 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 SECTIONSECTION 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 Inden-
ture 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 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
Section 4.13 hereof. 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.
"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 jurisdic-
tional 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 Subsid-
iary all of the outstanding voting securities (other than
directors' qualifying shares or similar requirements of law in
respect of non-Domestic Subsidiaries) of which are owned, direct-
ly 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:
Term Defined in Section
"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
"Guarantee Payment Blockage Date" . . . . 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
"Paying Agent" . . . . . . . . . . . . . 2.03
"Payment Blockage Period" . . . . . . . . 11.03
"Purchase Date" . . . . . . . . . . . . . 4.15
"Registrar" . . . . . . . . . . . . . . . 2.03
"Reinvestment Date" . . . . . . . . . . . 4.15
"Representative" . . . . . . . . . . . . 11.03
Section 1.03. Incorporation by Reference of Trust
Indenture Act.
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 Inden-
ture. 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 Compa-
ny, 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.
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. Form and Dating.
The Notes and the Trustee's certificate of authentica-
tion 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, stock
exchange rule or usage. The Company may use "CUSIP" numbers in
issuing the Notes. The Company shall approve the form of the
Notes. 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 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.
The Trustee or an authenticating agent shall authenti-
cate Notes for original issue in the aggregate principal amount
of $250,000,000 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 reason-
ably acceptable to the Company to authenticate Notes. An authen-
ticating 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 or the
City of Detroit, State of Michigan 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 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 forego-
ing 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.
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. If the Trustee is not
the Registrar, the Company shall furnish to the Trustee as of
each Record Date and on or 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.
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 appli-
cable 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 completed form of assign-
ment as provided with such Note or any other written instrument
of transfer in form satisfactory to the Company and the Registrar
duly executed by the Holder thereof or his attorney duly autho-
rized 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 at the
Registrar's 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 Registrar 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 Registrar 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.
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 if the Trustee's requirements are
met. An indemnity bond may be required by the Company or the
Trustee 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 authenti-
cated 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 Maturi-
ty 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 authenticate temporary
Notes. Temporary Notes shall be substantially in the form, and
shall carry all rights, of definitive Notes but may have varia-
tions 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. 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 Busi-
ness 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 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.
ARTICLE 3
REDEMPTION
Section 3.01. Notices to Trustee.
If the Company elects to redeem Notes pursuant to
Paragraph 6 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 equitable
and, if such Notes are listed on any securities exchange, by a
method that complies with the requirements of such exchange.
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, if any) 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 surren-
dered 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;
(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 request, the Trustee shall give the
notice of redemption in the Company's name and at the Company's
sole expense.
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 redemp-
tion 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 inter-
est shall be payable to the Holder of the redeemed Notes regis-
tered 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 accor-
dance with the preceding paragraph, the Notes called for redemp-
tion will cease to accrue interest and the only right of the
Holders of such Notes will be to receive payment of the redemp-
tion price of and, subject to the 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, the
Trustee shall authenticate for a Holder 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 on that date money designated for and suffi-
cient to pay such installment and is not prohibited from paying
such money to the Holders pursuant to the terms of this Inden-
ture.
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 on a timely basis with the SEC,
copies of the quarterly and annual report and of the information
documents and other reports, if any, which the Company is re-
quired to file with the SEC pursuant to Section 13 or 15(d) of
the Exchange Act. Notwithstanding that the Company may not be
subject to the reporting requirements of Section 13 or 15(d) of
the Exchange 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. The Company will also comply with the other
provisions of TIA Section 314(a).
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.
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 knowl-
edge 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 of 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 state-
ments 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 exer-
cise 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, notice 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 withhold-
ing taxes and any penalties, interest and additions to taxes)
levied or imposed upon it or any of its Subsidiaries or proper-
ties 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 equip-
ment 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 opera-
tions 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 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 similar-
ly 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 Subsid-
iaries to, comply with all applicable statutes, rules, regula-
tions, 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 financial condition or results
of operations 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 Subsid-
iaries; provided, however, that the Company shall not be required
to preserve any such right, license or franchise, or the corpo-
rate, 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.
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 presenta-
tions, 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 Ac-
quired 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 Indebt-
edness. For purposes of computing the Fixed Charge Coverage
Ratio, (A) if the Indebtedness which is the subject of a determi-
nation under this provision is Acquired Indebtedness, or Indebt-
edness 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 Indebted-
ness 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 Subsid-
iary, either a fixed or floating rate and (z) was incurred under
a revolving credit facility, the interest expense on such Indebt-
edness shall be computed based upon the average daily balance of
such Indebtedness during the applicable period, (C) for any
quarter prior to the date hereof 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 and (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 calcula-
tion.
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 Indebt-
edness) other than Permitted Indebtedness set forth in clauses
(i) through (x) of the definition thereof unless (i) the Indebt-
edness is incurred, denominated and payable in the local curren-
cies 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 opera-
tions are located in Mexico may also incur Indebtedness denomi-
nated 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 distribu-
tions becomes subject in any manner to any restriction or limita-
tion, the Company will not permit the Restricted Subsidiary to so
amend, modify or supplement such Indebtedness unless such Indebt-
edness 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 calcula-
tions 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 Credit Agree-
ment or under the terms of any Designated Senior Indebtedness and
other than pledges of the Capital Stock of Restricted Subsidiar-
ies that are not Guarantors securing Indebtedness of such Re-
stricted 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 forego-
ing restrictions shall not apply to an Asset Sale made in compli-
ance with Section 4.14.
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 addi-
tional 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 the Issue Date 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 the
Issue Date, plus (3) 100% of the aggregate Net Cash Proceeds
from the issue or sale, after the Issue Date, of Capital
Stock (other than Disqualified Capital Stock or Capital
Stock of the Company issued to any Subsidiary of the Compa-
ny) of the Company or any Indebtedness or other securities
of the Company convertible into or exercisable or exchange-
able for Capital Stock (other than Disqualified Capital
Stock) of the Company which has been so converted or exer-
cised 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 Disquali-
fied Capital Stock, or (v) the making of Investments in Unre-
stricted Subsidiaries and joint ventures, provided that the Net
Investment therein shall not exceed an aggregate of $15,000,000
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 the Issue Date, the amount of Net Investments made
pursuant to clauses (v) and (vi) shall be included in the calcu-
lation.
Not later than the date of making any Restricted
Payment, the Company shall deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment is permitted and
setting forth the basis upon which the calculations required by
this Section 4.13 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) subordi-
nate 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, Indebted-
ness 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 Subsid-
iary 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 the
extent of the balance of Asset Sale Proceeds after application as
described above, to the extent the Company elects, to an invest-
ment in assets used or useful in businesses similar or reason-
ably related to the business of the Company or Restricted Subsid-
iary as conducted on the Issue Date (either directly or indirect-
ly 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 (C) third, 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 instruc-
tions, 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
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 repur-
chase 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 denomina-
tions of $1,000, or integral multiples thereof, shall be
purchased); and
(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 Business
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 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 Pro-
ceeds 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 Transac-
tion") 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 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 obliga-
tions 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 collat-
eral 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 Subsid-
iary 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 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 guaran-
tee 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 consider-
ation, 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.
If the 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 paragraph (b) below, 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 Credit Agreement or offer to repay in full all
obligations under or in respect of the Credit Agreement and repay
the obligations under or in respect of the Credit Agreement of
each lender who has accepted such offer or (ii) obtain the
requisite consent under the Credit Agreement to permit the
repurchase of the Notes pursuant to this Section 4.20. 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 clause (3)
under Section 6.01 hereof if not cured within 60 days after the
notice required by such clause.
(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 prepaid, 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, provid-
ed 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;
(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
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 denomina-
tions of $1,000 and integral multiples thereof.
(c) (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
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 subor-
dinated 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 sub-
stantially 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 Guaran-
tor) 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
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 on the Issue Date 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, redemption
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 maturi-
ty 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 aggre-
gating $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 judg-
ment 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,
(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 Sub-
sidiary, 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, liquida-
tor 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 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 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 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 Credit
Agreement of notice of the acceleration of the Notes; provided,
however, that after such acceleration but before a judgement 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 consti-
tute 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 Inden-
ture or the Notes. Upon any such waiver, such Default shall
cease to exist, and any Event of Default arising therefrom shall
be deemed to have been cured for every purpose of this Indenture;
but no such waiver shall extend to any subsequent or other
Default or 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 indem-
nity 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 re-
quest 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.
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 reason-
able 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 expens-
es 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 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;
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 discre-
tion may require the filing by any party litigant in the suit of
an undertaking to pay the costs of the suit, and the court in
its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having
due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 6.11 does not apply to
a suit by the Trustee, a 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 contin-
uing, 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 Trustee need perform only those duties that
are specifically set forth in this Indenture and no cove-
nants 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 state-
ments 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.
(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 para-
graph (b) of this Section 7.01.
(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 accor-
dance 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
financial liability in the performance of any of its rights or
powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity satisfactory to it
against such risk or liability is not reasonably 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.
(g) The Trustee shall have no responsibility to
examine or review and shall have no liability for the contents of
any documents submitted to or delivered to any Noteholder by the
Company in the nature of an official statement or offering
circular, whether preliminary or final (except to the extent of
any description of the Trustee itself or the location of its
office).
Section 7.02. Rights of Trustee.
Subject to Section 7.01 hereof:
(1) The Trustee may rely on and shall be protected in
acting or refraining from acting upon any document reason-
ably believed by it to be genuine and to have been signed or
presented by the proper person. The Trustee need not inves-
tigate 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.
(3) The Trustee may act through 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 selec-
tion, and the advice or opinion of such counsel as to mat-
ters 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 exer-
cise any of the rights or powers vested in it by this Inden-
ture at the request, order or direction of any of the Hold-
ers 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 lia-
bilities which may be incurred therein or thereby.
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.
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 pursuant to the terms
of this Indenture 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 a Responsible Officer
of the Trustee, the Trustee shall mail to each Noteholder notice
of the Default or the Event of Default, as the case may be,
within 30 days after it is actually known to a Responsible
Officer of the Trustee. 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 if
required that complies with TIA SECTION 313(a). The Trustee also shall
comply with TIA SECTIONSECTION 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 prompt-
ly 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 reasonable compensation for its services. The Trustee'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 upon request for all reasonable disburse-
ments, 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 the Trustee for, and hold
it harmless against, any and all 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 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 indemni-
ty. However, the failure by the Trustee to so notify the Company
shall not relieve the Company of its obligations. Notwithstand-
ing 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 collect-
ed by the Trustee except such money or property held in trust to
pay principal of and interest on particular Notes.
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.
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
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 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 and the payment of all amounts owed to it
under Section 7.07 hereof, transfer all property held by it as
Trustee to the successor Trustee, 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.
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 satis-
fies 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 pub-
lished 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 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 inter-
est 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 ad-
versely 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.
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 supple-
ment 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 Sec-
tion 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 Inden-
ture 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 redemp-
tion 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
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 Inden-
ture, 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 suffi-
cient 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 amendment, supple-
ment, 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 ex-
pressed 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. The Company
or any Guarantor may not 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 thereto-
fore 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, 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 liabili-
ty 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 remain-
der 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 appli-
cable 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 Obli-
gations which through the scheduled payment 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, suffi-
cient, in the opinion of a nationally-recognized firm of
independent public accountants expressed in a written cer-
tification 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 princi-
pal of, premium, if any, and accrued interest on the out-
standing 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 fol-
lowing 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 de-
fault 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 compa-
ny 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 has been a
change in any applicable Federal income tax law with the
effect that, and such opinion shall confirm that, the Hold-
ers 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 Cove-
nant 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 stat-
ing 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 defeat-
ing, 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 Trustee may
determine, to the Holders of such Notes, of all sums due and to
become due thereon in respect of principal, premium, if any, and
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 notwith-
standing, 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, are in excess of the amount thereof
which would then be required to be deposited to effect an equiva-
lent 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 Sec-
tion 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 governmen-
tal 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 Obliga-
tions 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
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 Re-
quest, 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 pub-
lished 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.
ARTICLE 10
GUARANTEE OF NOTES
Section 10.01. Guarantee.
Subject to the provisions of this Article 10, each
Guarantor hereby jointly and severally unconditionally guaran-
tees to each Holder and to the Trustee, on behalf of the Holders,
(i) the due and punctual payment of the principal of, and premi-
um, 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 indul-
gence 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 bankrupt-
cy 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 dis-
charged 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, notwith-
standing 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 acceleration
of such Obligations as provided in Article 6 hereof, such Obliga-
tions (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 contin-
gent 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 the
obligations of such Guarantor under the Guarantee not constitut-
ing a fraudulent conveyance or fraudulent transfer under federal
or state law. Each Guarantor that makes a payment or distribu-
tion 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 obliga-
tions 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, and inter-
est 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 indefeasible payment
and satisfaction in full in cash or, as acceptable to the holders
of Guarantor Senior Indebtedness of such Guarantor, in any other
manner, of all existing and future 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, arrangement,
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 Guaran-
tor, whether voluntary or involuntary and whether or not involv-
ing insolvency or bankruptcy or (c) any general assignment for
the benefit of creditors or any other marshalling 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 and
satisfaction in full in cash or, as acceptable to the hold-
ers 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 enti-
tled to receive or retain, pursuant to the Guarantee of such
Guarantor, any payment or distribution of any kind or char-
acter 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, proper-
ty or securities, by set-off or otherwise, to which the
Holders or the Trustee would be entitled but for the subor-
dination provisions of this Article 10 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 Guarantor Senior Indebtedness of such Guaran-
tor or their representative or representatives or to the
trustee or trustees under any indenture under which any
instruments evidencing any of such Guarantor Senior Indebt-
edness may have been issued, ratably according to the aggre-
gate 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 or, as
acceptable to the Holders of such Guarantor Senior Indebted-
ness 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, wheth-
er 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 and satisfied
in full in cash or such payment and satisfaction in full
thereof in cash is provided for, then and in such event such
payment or distribution upon written notice to the Trustee
or the Holder of such Note, as the case may be, shall be
held by the Trustee or the Holder of such Note, as the case
may be, in trust for the benefit of the holders of such
Guarantor Senior Indebtedness and shall be immediately paid
over or delivered forthwith to the liquidating trustee or
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 or, as acceptable to the hold-
ers of such Guarantor Senior Indebtedness, any other manner,
after giving effect to any concurrent payment or distribu-
tion to or for the holders of such Guarantor Senior Indebt-
edness.
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 transfer of all of its
assets (as an entirety or 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, liquida-
tion, reorganization, assignment for the benefit of creditors or
marshalling of assets and liabilities of such Guarantor for the
purposes of this Article 10 if the Person formed by such consoli-
dation or the surviving entity of such merger or the Person which
acquires by transfer such assets (as an entirety or substantially
as an entirety) shall, as a part of such consolidation, merger or
transfer, 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 securi-
ties of any 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 indi-
rectly 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 Designated Senior Indebtedness
under or in respect of the Credit Agreement, for so long as there
shall exist any Designated Senior Indebtedness under or in
respect of the Credit Agreement, and, thereafter, the holders of
Designated Senior Indebtedness which constitutes Guarantor Senior
Indebtedness (in either such case, the "Guarantor Representa-
tive") to the Trustee of written notice of (i) the occurrence of
a Payment Default on Designated Senior Indebtedness which consti-
tutes Guarantor Senior Indebtedness or (ii) the occurrence of a
Non-Payment Event of Default on Designated Senior Indebtedness
which constitutes Guarantor Senior Indebtedness and the accelera-
tion of the maturity of such Designated Senior Indebtedness in
accordance with its terms, and in any such event, such prohibi-
tion 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 resume making any and all required payments in
respect of its Obligations on its Guarantee.
(b) Unless Section 10.07 hereof shall be applicable,
upon the occurrence of a Non-Payment Event of Default on Desig-
nated Senior Indebtedness which constitutes Guarantor Senior
Indebtedness of any Guarantor), no payment or distribution of any
assets or securities 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 subor-
dinated to its Obligations on its Guarantee) shall be made by
such Guarantor, including, without limitation, by way of set-off
or otherwise, for or 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 indi-
rectly in any manner, payment in respect of all or any portion of
its Obligations on its Guarantee for a period (a "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 paid in full in cash and the Trustee
has been so notified by either the Guarantor Representative or
such Guarantor or (z) such Guarantee Payment Blockage Period
shall have been terminated by written notice to such Guarantor or
the Trustee from the Guarantor Representative, 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 Obliga-
tions on its Guarantee. Notwithstanding any other provisions of
this Indenture, no event of default with respect to Designated
Senior Indebtedness which constitutes Guarantor Senior Indebted-
ness (other than a Payment Default) which existed or was continu-
ing 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 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 upon written notice
to the Trustee or the Holder of such Note, as the case may be,
such payment shall be paid over and delivered forthwith to the
Guarantor Representative, 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 jurisdic-
tion 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 Guaran-
tor, 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 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 indefeasibly
pay in full in cash all amounts payable under or in respect of
such Guarantor Senior Indebtedness in full in cash.
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 Inden-
ture 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 rela-
tive 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 permit-
ted 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
insolvency or bankruptcy case or proceeding, or any receivership,
liquidation, arrangement, reorganization or other similar case or
proceeding in connection therewith, or any liquidation, dissolu-
tion or other winding-up, or any assignment for the benefit of
creditors or other marshalling of assets and liabilities 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
provision 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
indefeasible payment and satisfaction in full in cash or, as
acceptable to the holders of Senior Indebtedness, in any other
manner, of all existing and future 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, 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 (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 marshalling of assets or
liabilities of the Company, then and in any such event:
(1) the holders of Senior Indebtedness shall be enti-
tled to receive payment and satisfaction in full in cash 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 or retain 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 Indebted-
ness held or represented by each, to the extent necessary to
make payment in full in cash or, as acceptable to the hold-
ers of Senior Indebtedness, in any other manner, of all
Senior Indebtedness remaining unpaid, after giving effect to
any concurrent payment or distribution, or provision there-
for, 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 limita-
tion, by way of set-off or otherwise, in respect of princi-
pal of, premium, if any, and interest on the Notes before
all Senior Indebtedness is paid and satisfied in full in
cash or such payment thereof in cash is provided for, then
and in such event such payment or distribution upon written
notice to the Trustee or the Holder of such Note, as the
case may be, shall be held by the Trustee or the Holder of
such Note, as the case may be, in trust for the benefit of
the holders of such Senior Indebtedness and shall be immedi-
ately paid over or delivered forthwith to the liquidating
trustee or agent or other Person making payment or distribu-
tion 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 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 hold-
ers 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 transfer of all of its
assets (as an entirety or substantially as an entirety) to
another Person upon the terms and conditions set forth in Arti-
cle 5 hereof shall not be deemed a dissolution, winding-up,
liquidation, reorganization, assignment for the benefit of
creditors or marshalling 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 transfer such assets (as an entirety or
substantially as an entirety) shall, as a part of such consolida-
tion, merger or transfer, 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 distribu-
tion of any assets or securities of the Company or any Restricted
Subsidiary of any kind or character (including, without limita-
tion, 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 limita-
tion, 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, 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 Notes following the
delivery by the representative of the holders of Designated
Senior Indebtedness under or in respect of the Credit Agreement,
for so long as there shall exist any Designated Senior Indebted-
ness under or in respect of the Credit Agreement, and, thereaf-
ter, 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 preced-
ing sentence shall no longer be in effect, subject to the provi-
sions 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 Desig-
nated 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 subordi-
nated 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, for or on account of any principal
of, premium, if any, or interest on the Notes or for or on
account of the purchase, redemption, defeasance or other acquisi-
tion 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 (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
paid in full in cash and the Trustee has been so notified by
either the Representative or the Company 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 provi-
sions of this Indenture, 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 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 addi-
tional 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 upon written notice to the Trustee
or Holder of such Note, as the case may be, such payment shall be
paid over and delivered forthwith to the Representative, 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 deliver 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 Indebted-
ness in excess of the amount sufficient to indefeasibly pay in
full in cash all amounts payable under or in respect of such
Senior Indebtedness in full in cash.
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 intend-
ed 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 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 permit-
ted by applicable law upon a Default or an Event of Default under
this Indenture, subject to the rights, if any, under this Arti-
cle 11 of the holders of Senior Indebtedness (1) in any insolven-
cy or bankruptcy case or proceeding, or any receivership, liqui-
dation, arrangement, reorganization or other similar case or
proceeding in connection therewith, or any liquidation, dissolu-
tion or other winding-up, or any assignment for the benefit of
creditors or other marshalling of assets and liabilities 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 autho-
rizes and directs the Trustee on his behalf to take such action
as may be necessary or appropriate to effectuate the subordina-
tion 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 reorganiza-
tion of the Company whether in bankruptcy, insolvency, receiver-
ship 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
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 other-
wise securing Senior Indebtedness; (3) release any Person liable
in any manner for the collection or payment of Senior Indebted-
ness; 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
Holders of the Notes to take any action to accelerate the maturi-
ty 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 or other representative
thereof; 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.
(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 repre-
senting itself to be a holder of Senior Indebtedness (or a
trustee, fiduciary or agent therefor or other representative
thereof) to establish that such notice has been given by a holder
of Senior Indebtedness (or a trustee, fiduciary or agent therefor
or other representative thereof); provided, however, that failure
to give such notice to the Company shall not affect in any way
the ability 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 distribu-
tion 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 partici-
pate in such payment or distribution and any other facts perti-
nent 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 certif-
icate of the trustee in bankruptcy, receiver, liquidating trust-
ee, 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 distribu-
tion, 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.
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 enti-
tled 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 commer-
cial 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:
Comerica Bank
Corporate Trust Department/MC 3461
411 W. Lafayette
Detroit, Michigan 48226
Attention: Comerica Bank
Fax Number: (313) 222-2985
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 answered back, if tel-
exed; 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.
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 Trust-
ee, 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, 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 prece-
dent 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 certifi-
cate 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
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
Responsible 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 Compa-
ny, 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.
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 incorpo-
rator, 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 succes-
sors. 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.
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 consid-
ered 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 unenforce-
able, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
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: /s/ William D. Shovers
-----------------------------
Name: William D. Shovers
Title: Vice President and
Chief Financial Officer
ATTEST:
/s/ Daniel M. Sandberg
_________________________
Name: Daniel M. Sandberg
Title: Vice President and
General Counsel
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.
By: /s/ William D. Shovers
-----------------------------
Name: William D. Shovers
Title: Vice President and
Chief Financial Officer
ATTEST:
/s/ Daniel M. Sandberg
__________________________
Name: Daniel M. Sandberg
Title: Vice President and
General Counsel
COMERICA BANK,
as Trustee
By: /s/ Marilyn A. Karam
------------------------------
Name: Marilyn A. Karam
Title: Vice President
ATTEST:
/s/ Susan T. Payne
___________________________
Name: Susan T. Payne
Title: Vice President
EXHIBIT A
CUSIP 420804-AB-2
Number
HAYES WHEELS INTERNATIONAL, INC.
11% SENIOR SUBORDINATED NOTE DUE 2006
Hayes Wheels International, Inc., a Delaware corpo-
ration (the "Company", which term includes any successor corpora-
tion), for value received promises to pay to _______________
______________ or registered assigns the principal sum of
___________________ Dollars, on July 15, 2006.
Interest Payment Dates: January 15 and July 15, commenc-
ing January 15, 1997
Record Dates: January 1 and July 1
Reference is made to the further provisions of this
Security contained herein, which will for all purposes have the
same effect as if set forth at this place.
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:
By:
[SEAL]
Certificate of Authentication:
This is one of the 11% Senior
Subordinated Notes due 2006 referred to in
the within-mentioned Indenture
Dated:
COMERICA BANK,
as Trustee
By: ___________________________________
Authorized Signatory
(REVERSE SIDE)
HAYES WHEELS INTERNATIONAL, INC.
11% SENIOR SUBORDINATED NOTE DUE 2006
1. INTEREST.
Hayes Wheels International, Inc., a Delaware corpo-
ration (the "Company"), promises to pay interest on the principal
amount of this Note semiannually on January 15 and July 15, of
each year (each an "Interest Payment Date"), commencing on
January 15, 1997, at the rate of 11% per annum. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
Interest on the Notes will accrue from the most recent date to
which interest has been paid or, if no interest has been paid,
from the date of the original issuance of the Notes.
The Company shall pay interest on overdue principal,
and on overdue premium, if any, and overdue interest, to the
extent lawful, at a rate equal to the rate of interest otherwise
payable on the Notes.
2. METHOD OF PAYMENT.
The Company will pay interest on this Note provided
for in Paragraph 1 above (except defaulted interest) to the
person who is the registered Holder of this Note at the close of
business on the January 1 or July 1 preceding the Interest
Payment Date. The Holder must surrender this Note to a Paying
Agent to collect principal payments. The Company will pay
principal, premium, if any, and interest in money of the United
States that at the time of payment is legal tender for payment of
public and private debts; provided, however, that the Company may
pay principal, premium, if any, and interest by check payable in
such money. It may mail an interest check to the Holder's
registered address.
3. PAYING AGENT AND REGISTRAR.
Initially, Comerica Bank, a Michigan banking corpo-
ration (the "Trustee"), will act as Paying Agent and Registrar.
The Company may change any Paying Agent or Registrar without
notice to the Holders of the Notes. Neither the Company nor any
of its Subsidiaries or Affiliates may act as Paying Agent but may
act as registrar or co-registrar.
4. INDENTURE; RESTRICTIVE COVENANTS.
The Company issued this Note under an Indenture
dated as of July 2, 1996 (the "Indenture") among the Company, the
Guarantors and the Trustee. The terms of this Note 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 77aaa-77bbbb) as in effect on the date of the Indenture. This
Note is subject to all such terms, and the Holder of this Note is
referred to the Indenture and said Trust Indenture Act for a
statement of them. All capitalized terms in this Note, unless
otherwise defined, have the meanings assigned to them by the
Indenture.
The Notes are general unsecured obligations of the
Company limited to $250,000,000 aggregate principal amount. The
Indenture imposes certain restrictions on, among other things,
the incurrence of indebtedness, the incurrence of liens and the
issuance of common stock by the Company and its subsidiaries,
mergers and sale of assets, the payments of dividends on, or the
repurchase of, capital stock of the Company and its subsidiaries,
certain other restricted payments by the Company and its subsid-
iaries, the creation of subsidiaries, certain transactions with,
and investments in, its affiliates, and a provision regarding
change-of-control transactions.
5. SUBORDINATION.
The Indebtedness evidenced by the Notes is, to the
extent and in the manner provided in the Indenture, subordinated
and subject in right of payment to the prior indefeasible payment
and satisfaction in full in cash of all existing and future
Senior Indebtedness as defined in the Indenture, and this Note is
issued subject to such provisions. Each Holder of this Note, by
accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee, on behalf of
such Holder, to take such action as may be necessary or appropri-
ate to effectuate the subordination as provided in the Indenture
and (c) appoints the Trustee attorney-in-fact of such Holder for
such purpose.
6. 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,
2001 at the following redemption prices (expressed as a percent-
age 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:
Year Percentage
2001 . . . . . . . . . . . . . . 105.500%
2002 . . . . . . . . . . . . . . 103.667%
2003 . . . . . . . . . . . . . . 101.833%
2004 and thereafter . . . . . . 100.000%
Notwithstanding the foregoing, the Company may
redeem in the aggregate up to 35% of the original principal
amount of the Notes at any time and from time to time prior to
July 15, 1999 at a redemption price equal to 110% of the aggre-
gate principal amount so redeemed, plus accrued interest to the
redemption date out of the Net Cash Proceeds of one or more
Equity Offerings where the proceeds to the Company of any such
Equity Offering are at least $35.0 million; provided, that at
least $162.5 million of the principal amount of the Notes origi-
nally issued remain 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.
7. NOTICE OF REDEMPTION.
Notice of redemption will be mailed via first-class
mail at least 30 days but not more than 60 days prior to the
redemption date to each Holder of Notes to be redeemed at its
registered address as it shall appear on the register of the
Notes maintained by the Registrar. 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.
8. OFFERS TO PURCHASE.
The Indenture requires that certain proceeds from
Asset Sales be used, subject to further limitations contained
therein, to make an offer to purchase certain amounts of Notes in
accordance with the procedures set forth in the Indenture. The
Company is also required to make an offer to purchase Notes upon
occurrence of a Change of Control in accordance with procedures
set forth in the Indenture.
9. DENOMINATIONS, TRANSFER, EXCHANGE.
The Notes are in registered form without coupons in
denominations of $1,000 and integral multiples thereof. A Holder
may register the transfer or exchange of Notes in accordance with
the Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer docu-
ments and to pay any taxes and fees required by law or permitted
by the Indenture. The Registrar need not register the transfer
of or exchange any Note selected for redemption or register the
transfer of or exchange any Note for a period of 15 days before a
selection of Notes to be redeemed or any Note after it is called
for redemption in whole or in part, except the unredeemed portion
of any Note being redeemed in part.
10. PERSONS DEEMED OWNERS.
The registered Holder of this Note may be treated as
the owner of it for all purposes.
11. UNCLAIMED MONEY.
If money for the payment of principal, premium or
interest on any Note remains unclaimed for two years, the Trustee
or Paying Agent will pay the money back to the Company at its
request. After that, Holders entitled to money must look to the
Company for payment as general creditors unless an "abandoned
property" law designates another person.
12. AMENDMENT, SUPPLEMENT AND WAIVER.
Subject to certain exceptions, the Indenture or the
Notes may be modified, amended or supplemented by the Company,
the Guarantors and the Trustee with the consent of the Holders of
at least a majority in principal amount of the Notes then out-
standing and any existing default or compliance with any provi-
sion may be waived in a particular instance with the consent of
the Holders of a majority in principal amount of the Notes then
outstanding. Without the consent of Holders, the Company, the
Guarantors and the Trustee may amend the Indenture or the Notes
or supplement the Indenture for certain specified purposes
including providing for uncertificated Notes in addition to
certificated Notes, and curing any ambiguity, defect or inconsis-
tency, or making any other change that does not materially and
adversely affect the rights of any Holder.
13. SUCCESSOR ENTITY.
When a successor corporation assumes all the obliga-
tions of its predecessor under the Notes and the Indenture and
immediately before and thereafter no Default exists and certain
other conditions are satisfied, the predecessor corporation will
be released from those obligations.
14. DEFAULTS AND REMEDIES.
If an Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in aggregate principal
amount of Notes then outstanding may declare all the Notes to be
due and payable immediately in the manner and with the effect
provided in the Indenture. Holders of Notes 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 limita-
tions, Holders of a majority in aggregate principal amount of the
Notes then outstanding may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Holders of
Notes notice of any continuing Default or Event of Default
(except a Default in payment of principal or interest) if it
determines that withholding notice is in their interest.
15. TRUSTEE DEALINGS WITH THE COMPANY.
The Trustee under the Indenture, in its individual
or any other capacity, may make loans to, accept deposits from,
and perform services for the Company, any Guarantor or their
Affiliates, and may otherwise deal with the Company, any Guaran-
tor or their Affiliates, as if it were not Trustee.
16. NO RECOURSE AGAINST OTHERS.
As more fully described in the Indenture, a direc-
tor, officer, employee or stockholder, as such, of the Company or
any Guarantor shall not have any liability for any obligations of
the Company or any Guarantor under the Notes or the Indenture or
for any claim based on, in respect or by reason of, such obliga-
tions or their creation. The Holder of this Note by accepting
this Note waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of this
Note.
17. DEFEASANCE AND COVENANT DEFEASANCE.
The Indenture contains provisions for defeasance of
the entire indebtedness on this Note and for defeasance of
certain covenants in the Indenture upon compliance by the Company
with certain conditions set forth in the Indenture.
18. ABBREVIATIONS.
Customary abbreviations may be used in the name of a
Holder of a Note or an assignee, such as: TEN COM (= tenants in
common), TEN ENT (= tenants by the entireties), JT TEN (joint
tenants with right of survivorship and not as tenants in common),
CUST (= Custodian), and U/G/M/A (Uniform Gifts to Minors Act).
19. CUSIP NUMBERS.
Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the
Company has caused CUSIP Numbers to be printed on the Notes and
has directed the Trustee to use CUSIP numbers in notices of
redemption as a convenience to Holders of the Notes. No repre-
sentation 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.
20. 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 PROCEED-
ING ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE NOTES.
THE COMPANY WILL FURNISH TO ANY HOLDER OF A NOTE
UPON WRITTEN REQUEST AND WITHOUT CHARGE A COPY OF THE INDENTURE.
REQUESTS MAY BE MADE TO: HAYES WHEELS INTERNATIONAL, INC., 38481
Huron River Drive, Romulus, Michigan 48174, Attention: Chief
Financial Officer.
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: ____________________ Your Signature:
(Sign exactly as your name
appears on the other side of
this Note)
Signature Guarantee:
[FORM OF NOTATION ON NOTE RELATING TO GUARANTEE]
GUARANTEE
Each Guarantor (the "Guarantor", which term includes
any successor Person under the Indenture) has unconditionally
guaranteed, on a senior subordinated basis, jointly and several-
ly, to the extent set forth in the Indenture and subject to the
provisions of the Indenture, (a) the due and punctual payment of
the principal of and interest on the Notes, whether at maturity,
by acceleration or otherwise, the due and punctual payment of
interest on overdue principal, 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.
This Guarantee shall, to the extent set forth in the
Indenture, and subject to the provisions of the Indenture, be
subordinated to the prior indefeasible payment and satisfaction
in full in cash of all existing and future Guarantor Senior
Indebtedness.
The obligations of each Guarantor 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
of this Guarantee.
This Guarantee shall not be valid or obligatory for
any purpose until the certificate of authentication on the Note
upon which this Guarantee is noted shall have been executed by
the Trustee under the Indenture by the manual signature of one of
its authorized signatories.
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.
By:
Name:
Title:
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 Sec-
tion 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:
$_________________
Date: ____________
Your Signature:
(Sign exactly as your name appears on the face
of this Note)
___________________________
Signature Guaranteed
HAYES WHEELS INTERNATIONAL, INC
AND
MANUFACTURERS AND TRADERS TRUST COMPANY
AS TRUSTEE
FIRST SUPPLEMENTAL INDENTURE
Dated as of June 20, 1996
Supplementing Indenture dated
as of November 15, 1992
9-1/4% Senior Notes
due 2002
THIS FIRST SUPPLEMENTAL INDENTURE, dated as of
June 20, 1996 (the First Supplemental Indenture ), by
and between Hayes Wheels International, Inc., a Delaware
corporation (the Company ), and Manufacturers and Trad-
ers Trust Company, a New York banking corporation, as
Trustee (the Trustee ). For all purposes of this First
Supplemental Indenture, except as otherwise expressly
provided or unless the context otherwise requires, capi-
talized terms used and not otherwise defined herein shall
have the respective meanings assigned to them in the
Indenture (as defined below).
WHEREAS, the Company has heretofore executed and
delivered to the Trustee an Indenture (the Indenture ),
dated as of November 15, 1992, providing for the creation
and issuance by the Company of up to the aggregate prin-
cipal amount of $100,000,000 of 9-1/4% Senior Notes due
2002 (the Securities ); and
WHEREAS, Section 9.02 of the Indenture provides that
the Company, when authorized by a resolution of its Board
of Directors, and the Trustee, together with the written
consent of the Holders of a majority in aggregate princi-
pal amount of the outstanding Securities, may amend the
Indenture, subject to certain exceptions set forth in
Section 9.02 of the Indenture; and
WHEREAS, the parties hereto are entering into this
First Supplemental Indenture to (i) eliminate certain
definitions set forth in Article 1 of the Indenture and
(ii) amend or eliminate certain provisions set forth in
Articles 4 and 5 of the Indenture, in each case, together
with any and all references in the Indenture thereto
(together, the "Proposed Amendments"); and
WHEREAS, the Holders of a majority in aggregate
principal amount of the outstanding Securities have duly
consented to the Proposed Amendments in the manner set
forth in Section 9.02 of the Indenture; and
WHEREAS, the Company has heretofore delivered or is
delivering contemporaneously herewith to the Trustee (i)
a copy of resolutions of the Company s Board of Directors
authorizing the execution of this First Supplemental
Indenture, (ii) evidence of the written consent of the
Holders of Securities set forth in the immediately pre-
ceding clause and (iii) an Officers Certificate and an
Opinion of Counsel in compliance with and to the effect
set forth in Sections 9.06, 10.04 and 10.05 of the Inden-
ture; and
WHEREAS, all other acts and things necessary to make
this First Supplemental Indenture a valid, binding and
enforceable instrument and all of the conditions and
requirements set forth in Section 9.02 of the Indenture
have been performed and fulfilled and the execution and
delivery of this First Supplemental Indenture have been
in all respects duly authorized by the Company and the
Trustee.
NOW, THEREFORE, in consideration of the premises set
forth herein and notwithstanding any provision of the
Indenture which, absent this First Supplemental Inden-
ture, might operate to limit such action, the parties
hereto have executed and delivered this First Supplemen-
tal Indenture, and the Company does hereby covenant and
agree with the Trustee for the benefit of the other
parties and for the equal and ratable benefit of the
Holders of the Securities as follows:
SECTION 1. Elimination and Amendment of Certain
Provisions of Article 1 of the Indenture.
(a) The following definitions set forth in Sections
1.01 and 1.02, as the case may be, of the Indenture and
any and all references in the Indenture thereto are
hereby deleted in their respective entireties:
(i) Accounts Receivable;
(ii) Acquired Indebtedness;
(iii) Affiliate Transaction;
(iv) Asset Sale;
(v) Asset Sale Offer;
(vi) Asset Sale Offer Date;
(vii) Asset Sale Offer Period;
(viii) Asset Sale Payment Date;
(ix) Attributable Value;
(x) Capitalized Lease Obligations;
(xi) Consolidated Amortization Expense;
(xii) Consolidated Depreciation Expense;
(xiii) Consolidated Fixed Charge Coverage Ratio;
(xiv) Consolidated Income Tax Expense;
(xv) Consolidated Interest Expense;
(xvi) Consolidated Net Income;
(xvii) Consolidated Net Worth;
(xviii) Deficiency Date;
(xix) Existing Indebtedness;
(xx) Foreign Asset Sale;
(xxi) Foreign Subsidiary;
(xxii) Independent Director;
(xxiii) Interest Expense;
(xxiv) Inventory;
(xxv) Minimum Consolidated Net Worth;
(xxvi) Net Worth Offer;
(xxvii) Net Proceeds;
(xxviii) Offer Amount;
(xxix) Offer Period;
(xxx) Payment Date;
(xxxi) Permitted Lien;
(xxxii) Reference Date;
(xxxiii) Refinancing Indebtedness;
(xxxiv) Restricted Inventory;
(xxxv) Restricted Payment;
(xxxvi) Short-Term Indebtedness; and
(xxxvii) Wholly Owned Subsidiaries.
(b) The following cross-reference set forth in
Section 1.02 of the Indenture is hereby amended and
restated to read as follows:
Successor 5.02"
SECTION 2. Elimination of Certain Provisions of
Article 4 of the Indenture.
(a) Sections 4.07, 4.08, 4.09, 4.11, 4.12, 4.13,
4.14, 4.15 and 4.17 of the Indenture and any and all
references in the Indenture thereto are hereby deleted in
their respective entireties.
SECTION 3. Elimination and Amendment of Certain
Provisions of Article 5 of the Indenture.
(a) Section 5.01 of the Indenture and any and
all references in the Indenture thereto are hereby deleted in
their respective entireties.
(b) Section 5.02 is hereby amended and restated in
its entirety to read as follows:
Section 5.02 Successor Corporation Substituted
Upon any consolidation or merger, or
any sale, lease, conveyance or other disposi-
tion of all or substantially all of the assets
of the Company or any assignment of its obliga-
tions under this Indenture or the Securities,
the Successor formed by such consolidation or
into or with which the Company is merged or to
which such sale, lease, conveyance or other
disposition or assignment is made shall succeed
to, and be substituted for, and may exercise
every right and power of, the Company under
this Indenture with the same effect as if such
Successor has been named as the Company herein
and the predecessor Company, in the case of a
sale, lease, conveyance or other disposition or
assignment, shall be released from all obliga-
tions under this Indenture and the Securities.
SECTION 4. Operation of Proposed Amendments.
Upon the execution and delivery of this First
Supplemental Indenture by the Trustee and the Company,
the Proposed Amendments contained herein will become
effective but will not become operative until after the
Notes validly tendered pursuant to the Company s Offer to
Purchase and Consent Solicitation Statement, dated May
[__], 1996, as may be amended from time to time (as so
amended, the Statement ), are accepted for purchase by
the Company in accordance with the terms of such State-
ment.
SECTION 5. Miscellaneous.
(a) Except as expressly modified hereby, the
Indenture is in all respects ratified and confirmed and
all terms, provisions and conditions thereof are and
shall remain in full force and effect.
(b) All agreements of the Company and the
Trustee, respectively, in this First Supplemental Inden-
ture shall bind their respective successors.
(c) This First Supplemental Indenture shall be
governed by and construed in accordance with the laws of
the State of New York, without regard to principles of
conflicts of law.
(d) If any provision of this First Supplemen-
tal Indenture limits, qualifies or conflicts with the
duties imposed by TIA SECTION 318(c), the imposed duties shall
control.
(e) The titles and headings of the sections of
this First Supplemental 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.
(f) The parties may sign any number of copies
of this First Supplemental Indenture. Each signed copy
shall be an original, but all of them together represent
the same agreement.
(g) In case any provision of this First Sup-
plemental Indenture shall be invalid, illegal or unen-
forceable, the validity, legality and enforceability of
the remaining provisions hereof or of the Indenture shall
not in any way be affected or impaired thereby.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have
caused this First Supplemental Indenture to be duly
executed, and their respective corporate seals to be
hereunto affixed, all as of the date first written above.
HAYES WHEELS INTERNATIONAL, INC.
By: /s/ Barry J. Miller
________________________
Name: Barry J. Miller
Title: Assistant Secretary
[Seal]
MANUFACTURERS AND TRADERS TRUST
COMPANY
By: /s/ Russell T. Whitley
_______________________
Name: Russell T. Whitley
Title: Assistant Vice President
[Seal]
________________________________________________________
HAYES WHEELS INTERNATIONAL, INC
AND
MANUFACTURERS AND TRADERS TRUST COMPANY
AS TRUSTEE
SECOND SUPPLEMENTAL INDENTURE
Dated as of June 26, 1996
Supplementing Indenture dated
as of November 15, 1992,
as amended
9-1/4% Senior Notes
due 2002
________________________________________________________
SECOND SUPPLEMENTAL INDENTURE, dated as of
June 26, 1996 (this "Second Supplemental Indenture"), by
and between Hayes Wheels International, Inc., a Delaware
corporation (the "Company"), and Manufacturers and Trad-
ers Trust Company, a New York banking corporation, as
Trustee (the "Trustee"). For all purposes of this Second
Supplemental Indenture, except as otherwise expressly
provided or unless the context otherwise requires, capi-
talized terms used and not otherwise defined herein shall
have the respective meanings assigned to them in the
Indenture (as defined below).
WHEREAS, the Company has heretofore executed
and delivered to the Trustee an Indenture, dated as of
November 15, 1992, as amended by the First Supplemental
Indenture, dated as of June 20, 1996 (as so amended, the
"Indenture"), providing for the creation and issuance by
the Company of up to the aggregate principal amount of
$100,000,000 of 9-1/4% Senior Notes due 2002 (the "Secu-
rities"); and
WHEREAS, Section 9.02 of the Indenture provides
that the Company, when authorized by a resolution of its
Board of Directors, and the Trustee, together with the
written consent of the Holders of at least 66-2/3% in
principal amount of the outstanding Securities, may amend
provisions of the Indenture relating to a Change of
Control; and
WHEREAS, the parties hereto are entering into
this Second Supplemental Indenture to amend the defini-
tion of Change of Control set forth in Article 1 of the
Indenture (the "Proposed Amendment"); and
WHEREAS, the Holders of at least 66-2/3% in
aggregate principal amount of the outstanding Securities
have duly consented to the Proposed Amendment in the
manner set forth in Section 9.02 of the Indenture; and
WHEREAS, the Company has heretofore delivered
or is delivering contemporaneously herewith to the Trust-
ee (i) a copy of resolutions of the Company's Board of
Directors authorizing the execution of this Second Sup-
plemental Indenture, (ii) evidence of the written consent
of the Holders of Securities set forth in the immediately
preceding clause and (iii) an Officers' Certificate and
an Opinion of Counsel in compliance with and to the
effect set forth in Sections 9.06, 10.04 and 10.05 of the
Indenture; and
WHEREAS, all other acts and things necessary to
make this Second Supplemental Indenture a valid, binding
and enforceable instrument and all of the conditions and
requirements set forth in Section 9.02 of the Indenture
have been performed and fulfilled and the execution and
delivery of this Second Supplemental Indenture have been
in all respects duly authorized by the Company and the
Trustee.
NOW, THEREFORE, in consideration of the premis-
es set forth herein and notwithstanding any provision of
the Indenture which, absent this Second Supplemental
Indenture, might operate to limit such action, the par-
ties hereto have executed and delivered this Second
Supplemental Indenture, and the Company does hereby
covenant and agree with the Trustee for the benefit of
the other parties and for the equal and ratable benefit
of the Holders of the Securities as follows:
SECTION 6. Amendment of the Definition of Change
of Control. The following definition set forth in Sec-
tion 1.01 of the Indenture is hereby amended and restated
in its entirety to read as follows:
" Change of Control means any of the
following: (i) the sale, lease, conveyance or other
disposition of all or substantially all of the
Company's assets as an entirety or substantially as
an entirety to any person or group (within the
meaning of Section 13(d)(3) of the Exchange Act) in
one or a series of transactions; (ii) the acquisi-
tion by the Company and/or any of its Subsidiaries
of 50% or more of the aggregate voting power of all
classes of Common Equity of the Company in one
transaction or a series of related transactions;
(iii) the liquidation or dissolution of the Company;
or (iv) any transaction or series of transactions
(as a result of a tender offer, merger, consolida-
tion or otherwise) that results in, or that is in
connection with, (a) any Person, including a group
(within the meaning of Section 13(d)(3) of the
Exchange Act) that includes such Person, acquiring
beneficial ownership (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of
35% or more of the aggregate voting power of all
classes of Common Equity of the Company or Person
that controls the Company at a time when the Company
is not a Subsidiary, direct or indirect, of Varity
(it being understood that Varity shall not be deemed
to have acquired beneficial ownership, directly or
indirectly, or 35% or more of such aggregate voting
power unless, prior thereto, it shall have reduced
such beneficial ownership to less than 35% of such
aggregate voting power), (b) so long as the 9 3/4%
Senior Notes due 1996 of K-H Corporation shall be
outstanding, the Company becoming a Subsidiary (as
defined in the indenture, dated as of December 15,
1985, governing such securities) of K-H Corporation,
or (c) less than 50% (measured by the aggregate
voting power of all classes) of the Company's Common
Equity being registered under Section 12(b) or 12(g)
of the Exchange Act. Any transaction or series of
transactions (as a result of a tender offer, merger,
consolidation or otherwise) that results in, or that
is in connection with, Varity or (subject to clause
(b)) any Subsidiary of Varity, including a group
(within the meaning of Section 13(d)(3) of the
Exchange Act) that includes Varity or (subject to
clause (b)) any Subsidiary of the Parent, increasing
its beneficial ownership (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, to
81% or more of all classes of Common Equity of the
Company shall be treated for purposes hereof as if a
Change of Control had occurred. Notwithstanding the
foregoing or any other provision in the Indenture to
the contrary, for the purposes of Section 4.10
hereof, the consummation of the transactions contem-
plated by the Agreement and Plan of Merger dated as
of March 28, 1996 between the Company and MWC Hold-
ings, Inc., a Delaware corporation, shall not con-
stitute a Change of Control."
SECTION 7. Operation of Proposed Amendments.
Upon the execution and delivery of this Second Supplemen-
tal Indenture by the Trustee and the Company, the Pro-
posed Amendments contained herein will become effective
but will not become operative until after the Notes
validly tendered pursuant to the Company's Offer to
Purchase and Consent Solicitation Statement, dated May
28, 1996, as may be amended from time to time (as so
amended, the "Statement"), are accepted for purchase by
the Company in accordance with the terms of such State-
ment.
SECTION 8. Miscellaneous.
(a) Except as expressly modified hereby, the
Indenture is in all respects ratified and confirmed and
all terms, provisions and conditions thereof are and
shall remain in full force and effect.
(b) All agreements of the Company and the
Trustee, respectively, in this Second Supplemental Inden-
ture shall bind their respective successors.
(c) This Second Supplemental Indenture shall
be governed by and construed in accordance with the laws
of the State of New York, without regard to principles of
conflicts of law.
(d) If any provision of this Second Supplemen-
tal Indenture limits, qualifies or conflicts with the
duties imposed by TIA SECTION 318(c), the imposed duties shall
control.
(e) The titles and headings of the sections of
this Second Supplemental 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.
(f) The parties may sign any number of copies
of this Second Supplemental Indenture. Each signed copy
shall be an original, but all of them together represent
the same agreement.
(g) In case any provision of this Second
Supplemental Indenture shall be invalid, illegal or
unenforceable, the validity, legality and enforceability
of the remaining provisions hereof or of the Indenture
shall not in any way be affected or impaired thereby.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have
caused this Second Supplemental Indenture to be duly
executed, and their respective corporate seals to be
hereunto affixed, all as of the date first written above.
HAYES WHEELS INTERNATIONAL,
INC.
By:________________________
Name: William D. Shovers
Title: Vice President
Finance and Chief
Financial Officer
[Seal]
MANUFACTURERS AND TRADERS
TRUST COMPANY
By:_______________________
Name:
Title:
[Seal]
________________________________________________________
HAYES WHEELS INTERNATIONAL, INC
AND
MANUFACTURERS AND TRADERS TRUST COMPANY
AS TRUSTEE
SECOND SUPPLEMENTAL INDENTURE
Dated as of June 26, 1996
Supplementing Indenture dated
as of November 15, 1992,
as amended
9-1/4% Senior Notes
due 2002
________________________________________________________
SECOND SUPPLEMENTAL INDENTURE, dated as of
June 26, 1996 (this "Second Supplemental Indenture"), by
and between Hayes Wheels International, Inc., a Delaware
corporation (the "Company"), and Manufacturers and Trad-
ers Trust Company, a New York banking corporation, as
Trustee (the "Trustee"). For all purposes of this Second
Supplemental Indenture, except as otherwise expressly
provided or unless the context otherwise requires, capi-
talized terms used and not otherwise defined herein shall
have the respective meanings assigned to them in the
Indenture (as defined below).
WHEREAS, the Company has heretofore executed
and delivered to the Trustee an Indenture, dated as of
November 15, 1992, as amended by the First Supplemental
Indenture, dated as of June 20, 1996 (as so amended, the
"Indenture"), providing for the creation and issuance by
the Company of up to the aggregate principal amount of
$100,000,000 of 9-1/4% Senior Notes due 2002 (the "Secu-
rities"); and
WHEREAS, Section 9.02 of the Indenture provides
that the Company, when authorized by a resolution of its
Board of Directors, and the Trustee, together with the
written consent of the Holders of at least 66-2/3% in
principal amount of the outstanding Securities, may amend
provisions of the Indenture relating to a Change of
Control; and
WHEREAS, the parties hereto are entering into
this Second Supplemental Indenture to amend the defini-
tion of Change of Control set forth in Article 1 of the
Indenture (the "Proposed Amendment"); and
WHEREAS, the Holders of at least 66-2/3% in
aggregate principal amount of the outstanding Securities
have duly consented to the Proposed Amendment in the
manner set forth in Section 9.02 of the Indenture; and
WHEREAS, the Company has heretofore delivered
or is delivering contemporaneously herewith to the Trust-
ee (i) a copy of resolutions of the Company's Board of
Directors authorizing the execution of this Second Sup-
plemental Indenture, (ii) evidence of the written consent
of the Holders of Securities set forth in the immediately
preceding clause and (iii) an Officers' Certificate and
an Opinion of Counsel in compliance with and to the
effect set forth in Sections 9.06, 10.04 and 10.05 of the
Indenture; and
WHEREAS, all other acts and things necessary to
make this Second Supplemental Indenture a valid, binding
and enforceable instrument and all of the conditions and
requirements set forth in Section 9.02 of the Indenture
have been performed and fulfilled and the execution and
delivery of this Second Supplemental Indenture have been
in all respects duly authorized by the Company and the
Trustee.
NOW, THEREFORE, in consideration of the premis-
es set forth herein and notwithstanding any provision of
the Indenture which, absent this Second Supplemental
Indenture, might operate to limit such action, the par-
ties hereto have executed and delivered this Second
Supplemental Indenture, and the Company does hereby
covenant and agree with the Trustee for the benefit of
the other parties and for the equal and ratable benefit
of the Holders of the Securities as follows:
SECTION 1. Amendment of the Definition of Change
of Control. The following definition set forth in Sec-
tion 1.01 of the Indenture is hereby amended and restated
in its entirety to read as follows:
" Change of Control means any of the
following: (i) the sale, lease, conveyance or other
disposition of all or substantially all of the
Company's assets as an entirety or substantially as
an entirety to any person or group (within the
meaning of Section 13(d)(3) of the Exchange Act) in
one or a series of transactions; (ii) the acquisi-
tion by the Company and/or any of its Subsidiaries
of 50% or more of the aggregate voting power of all
classes of Common Equity of the Company in one
transaction or a series of related transactions;
(iii) the liquidation or dissolution of the Company;
or (iv) any transaction or series of transactions
(as a result of a tender offer, merger, consolida-
tion or otherwise) that results in, or that is in
connection with, (a) any Person, including a group
(within the meaning of Section 13(d)(3) of the
Exchange Act) that includes such Person, acquiring
beneficial ownership (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of
35% or more of the aggregate voting power of all
classes of Common Equity of the Company or Person
that controls the Company at a time when the Company
is not a Subsidiary, direct or indirect, of Varity
(it being understood that Varity shall not be deemed
to have acquired beneficial ownership, directly or
indirectly, or 35% or more of such aggregate voting
power unless, prior thereto, it shall have reduced
such beneficial ownership to less than 35% of such
aggregate voting power), (b) so long as the 9 3/4%
Senior Notes due 1996 of K-H Corporation shall be
outstanding, the Company becoming a Subsidiary (as
defined in the indenture, dated as of December 15,
1985, governing such securities) of K-H Corporation,
or (c) less than 50% (measured by the aggregate
voting power of all classes) of the Company's Common
Equity being registered under Section 12(b) or 12(g)
of the Exchange Act. Any transaction or series of
transactions (as a result of a tender offer, merger,
consolidation or otherwise) that results in, or that
is in connection with, Varity or (subject to clause
(b)) any Subsidiary of Varity, including a group
(within the meaning of Section 13(d)(3) of the
Exchange Act) that includes Varity or (subject to
clause (b)) any Subsidiary of the Parent, increasing
its beneficial ownership (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, to
81% or more of all classes of Common Equity of the
Company shall be treated for purposes hereof as if a
Change of Control had occurred. Notwithstanding the
foregoing or any other provision in the Indenture to
the contrary, for the purposes of Section 4.10
hereof, the consummation of the transactions contem-
plated by the Agreement and Plan of Merger dated as
of March 28, 1996 between the Company and MWC Hold-
ings, Inc., a Delaware corporation, shall not con-
stitute a Change of Control."
SECTION 2. Operation of Proposed Amendments.
Upon the execution and delivery of this Second Supplemen-
tal Indenture by the Trustee and the Company, the Pro-
posed Amendments contained herein will become effective
but will not become operative until after the Notes
validly tendered pursuant to the Company's Offer to
Purchase and Consent Solicitation Statement, dated May
28, 1996, as may be amended from time to time (as so
amended, the "Statement"), are accepted for purchase by
the Company in accordance with the terms of such State-
ment.
SECTION 3. Miscellaneous.
(a) Except as expressly modified hereby, the
Indenture is in all respects ratified and confirmed and
all terms, provisions and conditions thereof are and
shall remain in full force and effect.
(b) All agreements of the Company and the
Trustee, respectively, in this Second Supplemental Inden-
ture shall bind their respective successors.
(c) This Second Supplemental Indenture shall
be governed by and construed in accordance with the laws
of the State of New York, without regard to principles of
conflicts of law.
(d) If any provision of this Second Supplemen-
tal Indenture limits, qualifies or conflicts with the
duties imposed by TIA SECTION 318(c), the imposed duties shall
control.
(e) The titles and headings of the sections of
this Second Supplemental 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.
(f) The parties may sign any number of copies
of this Second Supplemental Indenture. Each signed copy
shall be an original, but all of them together represent
the same agreement.
(g) In case any provision of this Second
Supplemental Indenture shall be invalid, illegal or
unenforceable, the validity, legality and enforceability
of the remaining provisions hereof or of the Indenture
shall not in any way be affected or impaired thereby.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have
caused this Second Supplemental Indenture to be duly
executed, and their respective corporate seals to be
hereunto affixed, all as of the date first written above.
HAYES WHEELS INTERNATIONAL,
INC.
By: /s/ William D. Shovers
Name: William D. Shovers
Title: Vice President
Finance and
Chief Financial
Officer
[Seal]
MANUFACTURERS AND TRADERS
TRUST COMPANY
By: /s/ Anita K. Spann
Name: Anita K. Spann
Title: Trust Officer
[Seal]
EXECUTION COPY
CREDIT AGREEMENT
among
HAYES WHEELS INTERNATIONAL, INC.,
The Several Lenders
from Time to Time Parties Hereto,
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent
and
MERRILL LYNCH CAPITAL CORPORATION,
as Documentation Agent
Dated as of June 27, 1996
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . 2
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . 2
1.2 Other Definitional Provisions . . . . . . . . . . . 28
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS . . . . . . . . . 28
2.1 Revolving Credit Commitments . . . . . . . . . . . 28
2.2 Revolving Credit Notes . . . . . . . . . . . . . . 29
2.3 Procedure for Revolving Credit Borrowing . . . . . 29
2.4 Commitment Fees; Other Fees . . . . . . . . . . . . 30
2.5 Termination or Reduction of Revolving Credit Com-
mitments . . . . . . . . . . . . . . . . . . . . . 30
2.6 Swing Line Commitments . . . . . . . . . . . . . . 30
2.7 Term Loans . . . . . . . . . . . . . . . . . . . . 32
2.8 Tranche A Term Notes . . . . . . . . . . . . . . . 33
2.9 Tranche B Term Notes . . . . . . . . . . . . . . . 34
2.10 Tranche C Term Notes . . . . . . . . . . . . . . . 35
2.11 Procedure for Term Loan Borrowing . . . . . . . . 36
2.12 Repayment of Loans . . . . . . . . . . . . . . . . 36
SECTION 3. LETTERS OF CREDIT . . . . . . . . . . . . . . . . 37
3.1 L/C Commitment . . . . . . . . . . . . . . . . . . 37
3.2 Procedure for Issuance of Letters of Credit . . . . 38
3.3 Fees, Commissions and Other Charges . . . . . . . . 39
3.4 L/C Participations . . . . . . . . . . . . . . . . 39
3.5 Reimbursement Obligation of the Borrower . . . . . 40
3.6 Obligations Absolute . . . . . . . . . . . . . . . 41
3.7 Letter of Credit Payments . . . . . . . . . . . . . 41
3.8 Application . . . . . . . . . . . . . . . . . . . . 41
SECTION 4. GENERAL PROVISIONS . . . . . . . . . . . . . . . 42
4.1 Interest Rates and Payment Dates . . . . . . . . . 42
4.2 Optional Prepayments . . . . . . . . . . . . . . . 42
4.3 Mandatory Prepayments and Reduction of Revolving
Credit Commitments . . . . . . . . . . . . . . . . 43
4.4 Conversion and Continuation Options . . . . . . . . 45
4.5 Minimum Amounts and Maximum Number of Tranches . . 46
4.6 Computation of Interest and Fees . . . . . . . . . 46
4.7 Inability to Determine Interest Rate . . . . . . . 46
4.8 Pro Rata Treatment and Payments . . . . . . . . . . 47
4.9 Illegality . . . . . . . . . . . . . . . . . . . . 48
4.10 Requirements of Law . . . . . . . . . . . . . . . 48
4.11 Taxes . . . . . . . . . . . . . . . . . . . . . . 49
4.12 Indemnity . . . . . . . . . . . . . . . . . . . . 51
4.13 Change of Lending Office; Replacement of Lenders . 51
SECTION 5. REPRESENTATIONS AND WARRANTIES . . . . . . . . . 52
5.1 Financial Condition . . . . . . . . . . . . . . . . 52
5.2 No Change; Solvency . . . . . . . . . . . . . . . . 54
5.3 Corporate Existence; Compliance with Law . . . . . 54
5.4 Corporate Power; Authorization; Enforceable Obli-
gations . . . . . . . . . . . . . . . . . . . . . . 54
5.5 No Legal Bar . . . . . . . . . . . . . . . . . . . 55
5.6 No Material Litigation . . . . . . . . . . . . . . 55
5.7 No Default . . . . . . . . . . . . . . . . . . . . 55
5.8 Ownership of Property; Liens . . . . . . . . . . . 55
5.9 Intellectual Property . . . . . . . . . . . . . . . 56
5.10 No Burdensome Restrictions . . . . . . . . . . . . 56
5.11 Taxes . . . . . . . . . . . . . . . . . . . . . . 56
5.12 Federal Regulations . . . . . . . . . . . . . . . 56
5.13 ERISA . . . . . . . . . . . . . . . . . . . . . . 56
5.14 Collateral . . . . . . . . . . . . . . . . . . . . 57
5.15 Investment Company Act; Other Regulations . . . . 57
5.16 Subsidiaries and Joint Ventures . . . . . . . . . 57
5.17 Purpose of Loans . . . . . . . . . . . . . . . . . 58
5.18 Environmental Matters . . . . . . . . . . . . . . 58
5.19 Regulation H . . . . . . . . . . . . . . . . . . . 59
5.20 No Material Misstatements . . . . . . . . . . . . 59
5.21 Delivery of the Transaction Documents . . . . . . 59
5.22 Representations and Warranties Contained in the
Transaction Documents . . . . . . . . . . . . . . . 60
5.23 Labor Matters . . . . . . . . . . . . . . . . . . 60
SECTION 6. CONDITIONS PRECEDENT . . . . . . . . . . . . . . 60
6.1 Conditions to Initial Extension of Credit . . . . . 60
6.2 Conditions to Each Extension of Credit . . . . . . 66
SECTION 7. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . 66
7.1 Financial Statements . . . . . . . . . . . . . . . 67
7.2 Certificates; Other Information . . . . . . . . . . 68
7.3 Payment of Obligations . . . . . . . . . . . . . . 69
7.4 Conduct of Business and Maintenance of Existence . 69
7.5 Maintenance of Property; Insurance . . . . . . . . 69
7.6 Inspection of Property; Books and Records; Discus-
sions . . . . . . . . . . . . . . . . . . . . . . . 69
7.7 Notices . . . . . . . . . . . . . . . . . . . . . . 70
7.8 Environmental Laws . . . . . . . . . . . . . . . . 71
7.9 Further Assurances . . . . . . . . . . . . . . . . 71
7.10 Additional Collateral . . . . . . . . . . . . . . 72
7.11 Interest Rate Protection . . . . . . . . . . . . . 73
7.12 Real Property Matters . . . . . . . . . . . . . . 73
7.13 Foreign Stock Pledge Agreements . . . . . . . . . 74
SECTION 8. NEGATIVE COVENANTS . . . . . . . . . . . . . . . 75
8.1 Financial Condition Covenants . . . . . . . . . . . 75
8.2 Limitation on Indebtedness . . . . . . . . . . . . 77
8.3 Limitation on Liens . . . . . . . . . . . . . . . . 78
8.4 Limitation on Guarantee Obligations . . . . . . . . 80
8.5 Limitation on Fundamental Changes . . . . . . . . . 81
8.6 Limitation on Sale of Assets . . . . . . . . . . . 82
8.7 Limitation on Leases . . . . . . . . . . . . . . . 83
8.8 Limitation on Dividends . . . . . . . . . . . . . . 83
8.9 Limitation on Capital Expenditures . . . . . . . . 83
8.10 Limitation on Investments, Loans and Advances . . 84
8.11 Limitation on Optional Payments and Modifications
of Debt Instruments and Transaction Documents . . . 85
8.12 Limitation on Transactions with Affiliates . . . . 86
8.13 Limitation on Changes in Fiscal Year . . . . . . . 86
8.14 Limitation on Negative Pledge Clauses . . . . . . 86
8.15 Limitation on Lines of Business . . . . . . . . . 86
8.16 Limitations on Currency and Commodity Hedging
Transactions . . . . . . . . . . . . . . . . . . . 86
SECTION 9. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . 87
SECTION 10. THE MANAGING AGENTS . . . . . . . . . . . . . . 90
10.1 Appointment . . . . . . . . . . . . . . . . . . . 90
10.2 Delegation of Duties . . . . . . . . . . . . . . . 91
10.3 Exculpatory Provisions . . . . . . . . . . . . . . 91
10.4 Reliance by Administrative Agent and Documenta-
tion Agent . . . . . . . . . . . . . . . . . . . . 91
10.5 Notice of Default . . . . . . . . . . . . . . . . 92
10.6 Non-Reliance on Administrative Agent, Documenta-
tion Agent and Other Lenders . . . . . . . . . . . 92
10.7 Indemnification . . . . . . . . . . . . . . . . . 92
10.8 Administrative Agent and Documentation Agent in
Their Individual Capacities . . . . . . . . . . . . 93
10.9 Successor Administrative Agent . . . . . . . . . . 93
10.10 Issuing Lender . . . . . . . . . . . . . . . . . 94
10.11 Releases of Guarantees and Collateral . . . . . . 94
SECTION 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . 94
11.1 Amendments and Waivers . . . . . . . . . . . . . . 94
11.2 Notices . . . . . . . . . . . . . . . . . . . . . 96
11.3 No Waiver; Cumulative Remedies . . . . . . . . . . 97
11.4 Survival of Representations and Warranties . . . . 97
11.5 Payment of Expenses and Taxes . . . . . . . . . . 97
11.6 Successors and Assigns; Participations and As-
signments . . . . . . . . . . . . . . . . . . . . . 98
11.7 Adjustments; Set-off . . . . . . . . . . . . . . . 100
11.8 Counterparts . . . . . . . . . . . . . . . . . . . 101
11.9 Severability . . . . . . . . . . . . . . . . . . . 101
11.10 Integration . . . . . . . . . . . . . . . . . . . 101
11.11 GOVERNING LAW . . . . . . . . . . . . . . . . . . 102
11.12 Submission To Jurisdiction; Waivers . . . . . . . 102
11.13 Acknowledgements . . . . . . . . . . . . . . . . 102
11.14 WAIVERS OF JURY TRIAL . . . . . . . . . . . . . . 103
11.15 Confidentiality . . . . . . . . . . . . . . . . . 103
SCHEDULES
A Commitments and Addresses
B Applicable Margin Calculation for Revolving Credit
Loans and Tranche A Term Loans
C Transaction Documents
5.4 Consents
5.14 Equipment and Inventory of Borrower and Subsidiaries
5.16 Subsidiaries and Joint Ventures
6.1(p) Local and Foreign Counsel
8.2(e) Permitted Indebtedness
8.3(h) Permitted Liens
8.4(a) Permitted Guarantee Obligations
EXHIBITS
A-1 Form of Revolving Credit Note
A-2 Form of Tranche A Term Note
A-3 Form of Tranche B Term Note
A-4 Form of Tranche C Term Note
A-5 Form of Swing Line Note
B-1 Form of Guarantee and Collateral Agreement
B-2 Form of Fee Mortgage
B-3 Form of Leasehold Mortgage
B-4 Form of Copyright, Patent and Trademark Security Agreement
C Form of Borrowing Certificate
D-1 Form of Opinion of Skadden, Arps, Slate, Meagher &
Flom
D-2 Form of Opinion of General Counsel to Borrower
E Form of U.S. Tax Compliance Certificate
F Form of Assignment and Acceptance
CREDIT AGREEMENT, dated as of June 27, 1996, among
HAYES WHEELS INTERNATIONAL, INC., a Delaware corporation (the
"Borrower"), the several banks and other financial institutions
from time to time parties to this Agreement (the "Lenders"),
CANADIAN IMPERIAL BANK OF COMMERCE, a Canadian-chartered bank
acting through its New York Agency, as administrative agent for
the Lenders hereunder and MERRILL LYNCH CAPITAL CORPORATION, a
Delaware corporation, as documentation agent for the Lenders
hereunder.
W I T N E S S E T H :
WHEREAS, the Borrower and MWC Holdings, Inc., a Dela-
ware corporation ("Holdings") and the sole shareholder of Motor
Wheel Corporation, an Ohio corporation ("Motor Wheel"), have
entered into an Agreement and Plan of Merger dated as of March
28, 1996 (the "Merger Agreement"), pursuant to which Holdings
will be merged with and into the Borrower (the "Merger"), which
shall be the surviving corporation of the Merger and the sole
shareholder of Motor Wheel, and (i) each outstanding share of
common stock of the Borrower will be converted into $28.80 in
cash (the "Cash Consideration") and one-tenth of one share of
newly issued common stock of the Borrower (the "New Common
Stock"), (ii) each outstanding share of common stock of Holdings
will be converted into approximately 8,232 shares of New Common
Stock and approximately 3,030 warrants (the "Borrower Warrants"),
each Borrower Warrant entitling the holder thereof to purchase
one share of New Common Stock at a price of $48.00 during the
period commencing on the fourth anniversary of the effective time
of the Merger and ending on the seventh anniversary thereof and
(iii) each outstanding share of preferred stock of the Borrower,
with a liquidation value of $1,000 per share (the "Borrower
Preferred Stock"), which shares will be purchased by the New
Borrower Investors (as hereinafter defined) immediately prior to
the Merger as part of the financing of the Merger, will be
converted into 31.25 shares of New Common Stock, on terms and
conditions reasonably satisfactory to the Lenders; and
WHEREAS, pursuant to the Merger Agreement, the Borrower
and Holdings have entered into Subscription Agreements, each
dated as of March 28, 1996 (collectively, the "Subscription
Agreements"), with each of the New Borrower Investors, pursuant
to which the Borrower agreed to issue and sell immediately prior
to the Merger an aggregate of 200,000 shares of Borrower Pre-
ferred Stock and 150,000 Borrower Warrants, which will remain
outstanding upon consummation of the Merger and will result in an
aggregate investment in the Borrower by the New Borrower Inves-
tors of $200,000,000 (the "Equity Investment"), on terms and
conditions reasonably satisfactory to the Lenders; and
WHEREAS, in connection with the Merger, the Borrower
has commenced an offering of not less than $250,000,000 in
aggregate principal amount of Senior Subordinated Notes (as
hereinafter defined), on terms and conditions reasonably satis-
factory to the Lenders; and
WHEREAS, in connection with the Merger, (i) the Borrow-
er has commenced an offer (the "Debt Tender Offer") to purchase
all of the Borrower's $100,000,000 aggregate principal amount of
the Borrower Notes (as hereinafter defined) and a related consent
solicitation to eliminate substantially all of the restrictive
covenants contained in any Borrower Notes that remain outstanding
and (ii) subject to the consummation of the Merger, Holdings
intends to redeem (the "Motor Wheel Redemption") all of Motor
Wheel's $125,000,000 aggregate principal amount of the Motor
Wheel Notes (as hereinafter defined) pursuant to their terms, on
terms and conditions reasonably satisfactory to the Lenders; and
WHEREAS, the Borrower has requested the Lenders to
establish a term loan facility in the amount of $425,000,000 (the
"Term Facility") and a revolving credit facility in the amount of
$220,000,000 (the "Revolving Credit Facility", collectively with
the Term Facility, the "Facilities"), pursuant to which term
loans and revolving credit loans may be made to the Borrower and
Letters of Credit (as hereinafter defined) may be issued under
the Revolving Credit Facility for the account of the Borrower;
and
WHEREAS, the proceeds of the Facilities will be used by
the Borrower (i) to finance a portion of the Cash Consideration
in connection with the Merger, (ii) to refinance certain existing
indebtedness of the Borrower and Motor Wheel in connection with
the Merger, (iii) to pay for the cancellation of management
options in connection with the Merger, (iv) to pay related fees
and expenses and (v) in the case of the Revolving Credit Loans,
for the general corporate purposes of the Borrower and its
Subsidiaries (as hereinafter defined) after the Merger; and
WHEREAS, the Administrative Agent and the Lenders are
willing to provide the Facilities to the Borrower upon the terms
and subject to the conditions set forth herein;
NOW THEREFORE, in consideration of the premises and the
mutual covenants contained herein, the parties hereto hereby
agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such terms to
be equally applicable to the singular and plural forms thereof):
"ABR Loans": Loans the rate of interest applicable to
which is based upon the CIBC Alternate Base Rate.
"Administrative Agent": CIBC, together with its affil-
iates, as the arranger of the Commitments and as the admin-
istrative agent for the Lenders under this Agreement and the
other Loan Documents.
"Adjustment Date": each date on or after January 31,
1997, that is the second Business Day following receipt by
the Lenders of both (i) the financial statements required to
be delivered pursuant to subsection 7.1(a) or 7.1(b), as
applicable, for the most recently completed fiscal period
and (ii) the related Compliance Certificate required to be
delivered pursuant to subsection 7.2(b) with respect to such
fiscal period.
"Affiliate": as to any Person, any other Person (other
than a Subsidiary) which, directly or indirectly, is in
control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "con-
trol" of a Person means the power, directly or indirectly,
either to (a) vote 10% or more of the securities having
ordinary voting power for the election of directors of such
Person or (b) direct or cause the direction of the manage-
ment and policies of such Person, whether by contract or
otherwise.
"Aggregate Outstanding Revolving Credit": as to any
Revolving Credit Lender at any time, an amount equal to the
sum of (a) the aggregate principal amount of all Revolving
Credit Loans made by such Revolving Credit Lender then
outstanding, (b) such Revolving Credit Lender's Revolving
Credit Commitment Percentage of the L/C Obligations then
outstanding and (c) such Revolving Credit Lender's Revolving
Credit Commitment Percentage of the Swing Line Loans then
outstanding.
"Agreement": this Credit Agreement, as amended, sup-
plemented or otherwise modified from time to time.
"Applicable Margin": (a) as applied to a given Type of
Tranche B Term Loan, the rate per annum set forth under the
relevant column heading below:
ABR Loans Eurodollar Loans
2.00% 3.00%;
(b) as applied to a given Type of Tranche C Term
Loan, the rate per annum set forth under the relevant column
heading below:
ABR Loans Eurodollar Loans
2.50% 3.50%;
and (c) as applied to a given Type of Revolving Credit Loan
or Tranche A Term Loan, the rate per annum determined as
follows: during the period from the Closing Date until the
first Adjustment Date, the Applicable Margin in respect of
Revolving Credit Loans and Tranche A Term Loans shall equal
(i) with respect to ABR Loans, 1.50% per annum and (ii) with
respect to Eurodollar Loans, 2.50% per annum; provided such
Applicable Margin will be adjusted on each Adjustment Date
to the applicable rate per annum set forth under the heading
"ABR Loans Applicable Margin" or "Eurodollar Loans Applica-
ble Margin" on Schedule B which corresponds to the Leverage
Ratio determined from the financial statements and Compli-
ance Certificate relating to the end of the fiscal quarter
immediately preceding such Adjustment Date; provided, fur-
ther that in the event that the financial statements re-
quired to be delivered pursuant to subsection 7.1(a) or
7.1(b), as applicable, and the related Compliance Certifi-
cate required to be delivered pursuant to subsection 7.2(b),
are not delivered when due, then
(a) if such financial statements and Compliance
Certificate are delivered after the date such financial
statements and Compliance Certificate were required to
be delivered (without giving effect to any applicable
cure period) and the Applicable Margin increases from
that previously in effect as a result of the delivery
of such financial statements and Compliance Certifi-
cate, then the Applicable Margin in respect of Revolv-
ing Credit Loans and Tranche A Term Loans during the
period from the date upon which such financial state-
ments and Compliance Certificate were required to be
delivered (without giving effect to any applicable cure
period) until the date upon which they actually are
delivered shall, except as otherwise provided in clause
(c) below, be the Applicable Margin as so increased;
(b) if such financial statements and Compliance
Certificate are delivered after the date such financial
statements and Compliance Certificate were required to
be delivered and the Applicable Margin decreases from
that previously in effect as a result of the delivery
of such financial statements and Compliance Certifi-
cate, then such decrease in the Applicable Margin shall
not become applicable until the date upon which such
financial statements and Compliance Certificate actual-
ly are delivered; and
(c) if such financial statements and Compliance
Certificate are not delivered prior to the expiration
of the applicable cure period, then, effective upon
such expiration, for the period from the date upon
which such financial statements and Compliance Certifi-
cate were required to be delivered (after the expira-
tion of the applicable cure period) until two Business
Days following the date upon which such financial
statements and Compliance Certificate actually are
delivered, the Applicable Margin in respect of Revolv-
ing Credit Loans and Tranche A Term Loans shall be
1.50% per annum, in the case of ABR Loans, and 2.50%
per annum, in the case of Eurodollar Loans.
"Assignee": as defined in subsection 11.6(c).
"Autokola": Hayes Wheels Autokola NH, a.s., a joint
stock company organized and existing under the laws of the
Czech Republic.
"Available Revolving Credit Commitment": as to any
Revolving Credit Lender at any time, an amount equal to the
excess, if any, of (a) the amount of such Revolving Credit
Lender's Revolving Credit Commitment at such time over (b)
the sum of (i) the aggregate unpaid principal amount at such
time of all Revolving Credit Loans made by such Revolving
Credit Lender, and (ii) an amount equal to such Revolving
Credit Lender's Revolving Credit Commitment Percentage of
the aggregate unpaid principal amount at such time of all
Swing Line Loans, provided that for purposes of calculating
Available Revolving Credit Commitments pursuant to subsec-
tion 2.4 (a) such amount shall be zero, and (iii) an amount
equal to such Revolving Credit Lender's Revolving Credit
Commitment Percentage of the outstanding L/C Obligations at
such time; collectively, as to all the Lenders, the "Avail-
able Revolving Credit Commitments".
"Borrower": as defined in the preamble hereto.
"Borrower Notes": the 9-1/4% Senior Notes due November
15, 2002, in an original aggregate principal amount of
$100,000,000, of the Borrower, as the same have been amend-
ed, supplemented or otherwise modified from time to time,
and, following the Closing Date, as the same may be amended,
supplemented or otherwise modified from time to time in
accordance with subsection 8.11.
"Borrower Preferred Stock": as defined in the recitals
hereto.
"Borrower Warrants": as defined in the recitals here-
to.
"Borrowing Date": any Business Day specified in a
notice pursuant to subsection 2.3, 2.6 or 3.2 as a date on
which the Borrower requests the Lenders to make Loans here-
under or the Issuing Lender to issue Letters of Credit
hereunder.
"Business Day": a day other than a Saturday, Sunday or
other day on which commercial banks in New York City are
authorized or required by law to close, except that, when
used in connection with a Eurodollar Loan, "Business Day"
shall mean any Business Day on which dealings in Dollars
between banks may be carried on in London, England and New
York, New York.
"Capital Expenditure": as defined in subsection 8.9.
"Capital Stock": any and all shares, interests,
participations or other equivalents (however designated) of
capital stock of a corporation, any and all equivalent
ownership interests in a Person (other than a corporation)
and any and all warrants or options to purchase any of the
foregoing.
"Cash Consideration": as defined in the recitals
hereto.
"Cash Equivalents": (a) securities with maturities of
one year or less from the date of acquisition issued or
fully guaranteed or insured by the United States Government
or any agency thereof, (b) certificates of deposit and
eurodollar time deposits with maturities of one year or less
from the date of acquisition and overnight bank deposits and
demand deposits of any Lender or of any commercial bank
having capital and surplus in excess of $500,000,000, (c)
repurchase obligations of any Lender or of any commercial
bank satisfying the requirements of clause (b) of this
definition, having a term of not more than 30 days with
respect to securities issued or fully guaranteed or insured
by the United States Government, (d) commercial paper of a
domestic issuer rated at least A-2 by Standard and Poor's
Ratings Services ("S&P") or P-2 by Moody's Investors Ser-
vice, Inc. ("Moody's"), (e) securities with maturities of
one year or less from the date of acquisition issued or
fully guaranteed by any state, commonwealth or territory of
the United States, by any political subdivision or taxing
authority of any such state, commonwealth or territory or by
any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing
authority or foreign government (as the case may be) are
rated at least A by S&P or A by Moody's, (f) securities with
maturities of one year or less from the date of acquisition
backed by standby letters of credit issued by any Lender or
any commercial bank satisfying the requirements of clause
(b) of this definition, (g) in the case of any Foreign
Subsidiary, (i) direct obligations of the sovereign nation
(or any agency thereof) in which such Foreign Subsidiary is
organized or is conducting business or in obligations fully
and unconditionally guaranteed by such sovereign nation (or
any agency thereof), (ii) deposits, obligations or securi-
ties of the type and maturity described in clauses (b)
through (f) above of foreign obligors, which deposits,
obligations or securities or obligors (or the parent enti-
ties of such obligors) have ratings described in such claus-
es or equivalent ratings from comparable foreign rating
agencies or (iii) deposits, obligations or securities of the
type and maturity described in clauses (b) through (f) above
of foreign obligors (or the parent entities of such
obligors), which deposits, obligations or securities or
obligors (or the parent entities of such obligors) do not
have the ratings described in such clauses or in clause
(g)(ii) but which are comparable in investment quality to
such deposits, obligations or securities or obligors (or the
parent entities of such obligors), as the case may be, or
(h) shares of money market mutual or similar funds which
invest exclusively in assets satisfying the requirements of
clauses (a) through (f) of this definition.
"C/D Published Moving Rate": on any particular date,
the latest three-week moving average of daily secondary
market morning offering rates in the United States for
three-month certificates of deposit of major United States
money market lenders, such three-week moving average (ad-
justed to the basis of a year of 360 days) being determined
weekly for the three-week period ending on the previous
Friday by the Administrative Agent on the basis of:
(a) such rates reported by certificate of deposit
dealers to and published by the Federal Reserve Bank of
New York (as adjusted for reserves and assessments in
the same manner as the C/D Quoted Rate); or
(b) if such publication shall be suspended or
terminated, the C/D Quoted Rate determined by the
Administrative Agent on the basis of quotations for
such rates by the Administrative Agent.
"C/D Quoted Rate": relative to any determination of
the C/D Published Moving Rate in circumstances when publica-
tion of the rates referred to in clause (a) of the defini-
tion thereof has been suspended or terminated, the rate of
interest per annum determined by the Administrative Agent to
be the sum (rounded upward to the nearest 1/16th of 1%) of:
(a) the rate obtained by dividing (i) the average
(rounded upward to the nearest 1/16th of 1%) of the bid
rates quoted to the Administrative Agent, in CIBC's
secondary market at approximately 10:00 A.M., New York
City time (or as soon thereafter as practicable), from
time to time by three certificate of deposit dealers of
recognized standing selected by the Administrative
Agent in its reasonable discretion for the purchase at
face value of three-month certificates of deposit of
CIBC in an amount approximately equal or comparable to
the amount of CIBC's portion of the Loans outstanding
hereunder with respect to which the C/D Quoted Rate is
being determined by (ii) a percentage equal to 100%
minus the average of the daily percentages specified
during such period by the Board of Governors of the
Federal Reserve System (or any successor) for determin-
ing the maximum reserve requirement (including, but not
limited to, any marginal reserve requirement) for a
member bank of the Federal Reserve System in respect of
liabilities consisting of or including (among other
liabilities) three-month Dollar nonpersonal time depos-
its in the United States; and
(b) the daily average during such period of the
net annual assessment rates estimated by the Adminis-
trative Agent for determining the then current annual
assessment payable by CIBC to the Federal Deposit
Insurance Corporation for insuring Dollar deposits of
CIBC in the United States.
"Change of Control": any of the following events: (a)
at any time prior to the occurrence of (i) the "senior
secured bank loan rating" of the Borrower achieving a rating
of an equivalent of at least BBB- by S&P and a rating of an
equivalent of at least Baa3 by Moody's, (ii) the Leverage
Ratio as of the end of the most recently ended fiscal quar-
ter of the Borrower not being greater than 3.25 to 1.00, as
determined from the financial statements and shown on the
Compliance Certificate delivered for such fiscal quarter
pursuant to subsection 7.1(a) or 7.1(b), as applicable, and
subsection 7.2(b), respectively, or (iii) the Borrower
having completed a primary, underwritten public offering of
its common stock pursuant to which at least 15% of its
outstanding common stock, determined on a fully diluted
basis, shall have been sold to the public pursuant to an
effective registration statement under the Securities Act
(other than the registration of common stock or options or
other rights in respect thereof solely on Form S-4 or S-8 or
any successor form), JLL and its Affiliates are the benefi-
cial owners (as defined under Rule 13d-3 or any successor
rule or regulation promulgated under the Exchange Act) of
less than 20% of the outstanding common stock of the Borrow-
er, determined on a fully diluted basis; (b) at any time,
any Person (including such Person's Affiliates and associ-
ates), other than the New Borrower Investors and their
respective Affiliates ("NBI"), is the beneficial owner of
more than 30% of the total voting power of the outstanding
common stock of the Borrower, determined on a fully diluted
basis, and either (i) NBI is the beneficial owner of a
lesser percentage of the total voting power of the outstand-
ing common stock of the Borrower, determined on a fully
diluted basis, than such other Person and does 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 Borrower or (ii) JLL is the beneficial
owner of less than 20% of the total voting power of the
outstanding common stock of the Borrower, determined on a
fully diluted basis; (c) during any period of two consecu-
tive years, individuals who at the beginning of such period
constituted the board of directors of the Borrower (together
with any new directors whose election by such board of
directors or whose nomination for election by the sharehold-
ers of the Borrower 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 recommen-
dation for election was previously so approved) cease to
constitute a majority of the board of directors of the
Borrower; or (d) a "Change of Control" as defined in the
Senior Subordinated Notes Indenture shall have occurred.
"CIBC": Canadian Imperial Bank of Commerce, a Canadi-
an-chartered bank, acting through its New York Agency.
"CIBC Alternate Base Rate": on any particular date, a
rate of interest per annum equal to the highest of:
(a) the rate of interest most recently announced
by CIBC as its base rate (the "CIBC Prime Rate");
(b) the Federal Funds Rate for such date plus 1/2
of 1%; and
(c) the CD Published Moving Rate most recently
determined by CIBC plus 1%.
The CIBC Alternate Base Rate is not necessarily intended to
be the lowest rate of interest charged by CIBC in connection
with extensions of credit.
"Clean-Down Amount": $115,000,000.
"Closing Date": the date on which the conditions
precedent set forth in subsection 6.1 shall be satisfied.
"Code": the Internal Revenue Code of 1986, as amended
from time to time.
"Collateral": all assets (including assets constitut-
ing shares of Capital Stock) of the Loan Parties, now owned
or hereinafter acquired, upon which a Lien is purported to
be created by any Security Document.
"Commitment Letter": the Commitment Letter dated March
28, 1996 among CIBC, Merrill Lynch, the Borrower and Hold-
ings, as the same may be amended, supplemented or otherwise
modified from time to time.
"Commitments": the collective reference to the Revolv-
ing Credit Commitments, the Swing Line Commitment, the Term
Loan Commitments and the L/C Commitment; individually, a
"Commitment".
"Commitment Percentage": as to any Lender, the per-
centage of the aggregate Revolving Credit Commitments and
Term Loan Commitments constituted by such Lender's Revolving
Credit Commitment and Term Loan Commitment, or following the
Closing Date, the percentage representing a fraction the
numerator of which is the sum of (i) the aggregate principal
amount of such Lender's Term Loans then outstanding plus
(ii) the Revolving Credit Commitment of such Lender (or,
following the termination or expiration of the Revolving
Credit Commitments, the sum of (x) the aggregate principal
amount of such Lender's Revolving Credit Loans then out-
standing plus (y) such Lender's Revolving Commitment Per-
centage of all L/C Obligations and Swing Line Loans then
outstanding), and the denominator of which is the sum of (i)
the aggregate principal amount of Term Loans of all Lenders
then outstanding plus (ii) the aggregate Revolving Credit
Commitments of all Lenders (or, following the termination or
expiration of the Revolving Credit Commitments, the sum of
(x) the aggregate principal amount of all Revolving Credit
Loans then outstanding plus (y) the aggregate principal
amount of all L/C Obligations and Swing Line Loans then
outstanding).
"Commonly Controlled Entity": an entity, whether or
not incorporated, which is under common control with the
Borrower within the meaning of Section 4001 of ERISA or is
part of a group which includes the Borrower and which is
treated as a single employer under Section 414 of the Code.
"Compliance Certificate": as defined in subsection
7.2(b).
"Consolidated": when used in connection with any
financial statements required to be delivered pursuant to
subsection 7.1, means such term as it applies to the Borrow-
er and its Subsidiaries on a consolidated basis, after
eliminating all intercompany items.
"Consolidating": when used in connection with any
financial statements required to be delivered pursuant to
subsection 7.1, means such term as it applies to the indi-
vidual business segments of the Borrower and its Subsidiar-
ies on a stand-alone basis.
"Contractual Obligation": as to any Person, any provi-
sion of any security issued by such Person or of any agree-
ment, instrument or other undertaking to which such Person
is a party or by which it or any of its property is bound.
"Copyright, Patent and Trademark Security Agreement":
the Copyright, Patent and Trademark Security Agreement to be
executed and delivered by the Borrower, Motor Wheel and
certain other Domestic Subsidiaries of the Borrower, sub-
stantially in the form of Exhibit B-4, as the same may be
amended, supplemented or otherwise modified from time to
time.
"Current Assets": on any date, with respect to the
Borrower and its Subsidiaries on a consolidated basis, all
assets of the Borrower and its Subsidiaries on such date
which would, in accordance with GAAP, be classified on a
consolidated balance sheet of the Borrower as "current
assets".
"Current Liabilities": on any date, with respect to
the Borrower and its Subsidiaries on a consolidated basis,
all liabilities of the Borrower and its Subsidiaries on such
date which, in accordance with GAAP, would be classified on
a consolidated balance sheet of the Borrower as "current
liabilities".
"Debt Tender Offer": as defined in the recitals here-
to.
"Default": any of the events specified in Section 9,
whether or not any requirement for the giving of notice, the
lapse of time, or both, or any other condition, has been
satisfied.
"Documentation Agent": Merrill Lynch, as documentation
agent for the Lenders under this Agreement and the other
Loan Documents.
"Dollars" and "$": dollars in lawful currency of the
United States of America.
"Domestic Subsidiary": any Subsidiary of the Borrower
organized under the laws of any jurisdiction within the
United States.
"EBITDA": for any period, with respect to the Borrower
and its Subsidiaries on a consolidated basis, determined in
accordance with GAAP, an amount equal to the sum of (a) Net
Income for such period, plus (b) income taxes, excluding
income taxes (either positive or negative) attributable to
extraordinary and non-recurring gains or losses or sales or
other dispositions of assets permitted under subsection 8.6,
plus (c) Interest Expense for such period, plus (d) depreci-
ation for such period, plus (e) amortization for such peri-
od, plus (f) any other non-cash items (including minority
interests) reducing Net Income for such period, plus (g)
restructuring charges and costs (whether cash or non-cash)
for such period to the extent not added back to Net Income,
plus (h) amortization of deferred financing costs and ex-
penses for such period, minus (i) all non-cash items in-
creasing Net Income for such period.
"Environmental Costs": any and all costs or expenses
(including, without limitation, attorney's and consultant's
fees, investigation and laboratory fees, response costs,
court costs and litigation expenses, fines, penalties,
damages, settlement payments, judgments and awards), of
whatever kind or nature, contingent or otherwise, arising
out of, or in any way relating to, any violation of, noncom-
pliance with or liability under any Environmental Laws or
any orders, requirements, demands, or investigations of any
person related to any Environmental Laws. Environmental
Costs include any and all of the foregoing, without regard
to whether they arise out of or are related to any past,
pending or threatened proceeding of any kind.
"Environmental Laws": any and all laws, rules, orders,
regulations, statutes, ordinances, codes, decrees, or other
legally enforceable requirements (including, without limita-
tion, common law) of any foreign government, the United
States, or any state, local, municipal or other Governmental
Authority, regulating, relating to or imposing liability or
standards of conduct concerning protection of the environ-
ment or of human health, or employee health and safety, as
has been, is now, or may at any time hereafter be, in ef-
fect.
"Environmental Permits": any and all permits, licens-
es, registrations, notifications, exemptions and any other
authorization required under any Environmental Law.
"Equity Investment": as defined in the recitals here-
to.
"ERISA": the Employee Retirement Income Security Act
of 1974, as amended from time to time.
"Eurocurrency Reserve Requirements": for any day as
applied to a Eurodollar Loan, the aggregate (without dupli-
cation) of the rates (expressed as a decimal fraction) of
reserve requirements in effect on such day (including,
without limitation, basic, supplemental, marginal and emer-
gency reserves under any regulations of the Board of Gover-
nors of the Federal Reserve System or other Governmental
Authority having jurisdiction with respect thereto) dealing
with reserve requirements prescribed for eurocurrency fund-
ing (currently referred to as "Eurocurrency Liabilities" in
Regulation D of such Board) maintained by a member bank of
such System.
"Eurodollar Base Rate": with respect to each day
during each Interest Period pertaining to a Eurodollar Loan,
the rate per annum determined by the Administrative Agent to
be the arithmetic mean (rounded to the nearest 1/100th of
1%) of the offered rates for deposits in Dollars with a term
comparable to such Interest Period that appears on the
Telerate British Bankers Assoc. Interest Settlement Rates
Page (as defined below) at approximately 11:00 A.M., London
time, on the second full Business Day preceding the first
day of such Interest Period; provided, however, that if
there shall at any time no longer exist a Telerate British
Bankers Assoc. Interest Settlement Rates Page, "Eurodollar
Base Rate" shall mean, with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate
per annum equal to the rate at which CIBC is offered Dollar
deposits at or about 10:00 A.M., New York City time, two
Business Days prior to the beginning of such Interest Period
in the interbank eurodollar market where the eurodollar and
foreign currency and exchange operations in respect of its
Eurodollar Loans are then being conducted for delivery on
the first day of such Interest Period for the number of days
comprised therein and in an amount comparable to the amount
of its Eurodollar Loan to be outstanding during such Inter-
est Period. "Telerate British Bankers Assoc. Interest
Settlement Rates Page" shall mean the display designated as
Page 3750 on the Telerate System Incorporated Service (or
such other page as may replace such page on such service for
the purpose of displaying the rates at which Dollar deposits
are offered by leading banks in the London interbank deposit
market).
"Eurodollar Loans": Loans the rate of interest appli-
cable to which is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during
each Interest Period pertaining to a Eurodollar Loan, a rate
per annum determined for such day in accordance with the
following formula (rounded upward to the nearest 1/100th
of 1%):
____________________________________
Eurodollar Base Rate
1.00 - Eurocurrency Reserve Requirements
"Event of Default": any of the events specified in
Section 9, provided that any requirement for the giving of
notice, the lapse of time, or both, or any other condition,
has been satisfied.
"Excess Cash Flow": with respect to any fiscal year of
the Borrower and its Subsidiaries, on a consolidated basis,
an amount equal to (a) Net Income for such fiscal year, plus
(b) amortization and depreciation for such fiscal year, plus
(c) extraordinary or non-recurring losses for such fiscal
year, minus (d) extraordinary or non-recurring gains for
such fiscal year, minus (e) Capital Expenditures made in
accordance with subsection 8.9 during such fiscal year,
minus (f) payments of principal on Indebtedness resulting in
a permanent reduction of such Indebtedness made during such
fiscal year, minus (g) amounts arising from sales of assets
permitted by subsection 8.6 during such fiscal year to the
extent included in Net Income and paid to the Lenders as a
mandatory prepayment pursuant to subsection 4.3(c), minus
(h) Investments made in accordance with subsections 8.10 (c)
and (g) during such fiscal year, minus (i) plant closing and
restructuring costs and charges during such fiscal year,
minus (j) pension plan expense to the extent not reducing
Net Income for such fiscal year, minus (k) increases in
Working Capital for such fiscal year, plus (l) decreases in
Working Capital for such fiscal year in excess of
$15,000,000.
"Exchange Act": the Securities Exchange Act of 1934,
as amended from time to time.
"Existing Borrower Credit Agreement": the Credit
Agreement dated as of December 15, 1992, as amended and
restated as of November 30, 1993, June 10, 1994 and March
24, 1995, among the Borrower, The Chase Manhattan Bank,
N.A., as agent, The Bank of Nova Scotia, as co-agent, and
the banks party thereto.
"Existing Credit Agreements": the collective reference
to the Existing Borrower Credit Agreement and the Existing
Motor Wheel Credit Agreement.
"Existing Letters of Credit": the collective reference
to the following letters of credit (a) issued by The Chase
Manhattan Bank, N.A. for the account of the Borrower: (i)
the letter of credit, number PG 752196, issued for the
benefit of Sentry Insurance Company with a face amount equal
to $1,300,000 and an expiration date of November 10, 1996,
(ii) the letter of credit, number PG 752200, issued for the
benefit of Comerica Bank with a face amount equal to
$1,000,000 and an expiration date of November 10, 1996, and
(iii) the letter of credit, number PG 752199, issued for the
benefit of United Pacific Insurance Company with a face
amount equal to $557,000 and an expiration date of November
10, 1996, and (b) issued by Core States Bank, N.A. for the
account of Motor Wheel: (i) the letter of credit, number
514272P, issued for the benefit of Safeco Insurance Co. with
a face amount equal to $300,000 and an expiration date of
March 31, 1997, (ii) the letter of credit, number 5974812P,
issued for the benefit of The Mitsubishi Bank Ltd. with a
face amount equal to $4,000,000 and an expiration date of
June 30, 1999, (iii) the letter of credit, number 597481P,
issued for the benefit of The Mitsubishi Bank Ltd. with a
face amount equal to $2,666,666 and an expiration date of
June 30, 1999, (iv) the letter of credit, number 597407P,
issued for the benefit of the Bureau of Worker's Disability
Compensation (State of Michigan) with a face amount equal to
$4,000,000 and an expiration date of June 30, 1999, (v) the
letter of credit, number 99588P, issued for the benefit of
The Travelers Companies with a face amount equal to $65,000
and an expiration date of March 31, 1997 and (vi) the letter
of credit, number 511156P, issued for the benefit of the
Kentucky Economic Development Finance Authority with a face
amount equal to $1,500,000 and an expiration date of March
31, 1997, as the same may be amended, supplemented or other-
wise modified from time to time.
"Existing Motor Wheel Credit Agreement": the Amended
and Restated Loan and Security Agreement, dated as of March
1, 1993, as amended as of November 7, 1995, between Motor
Wheel and Congress Financial Corporation (Central).
"Federal Funds Rate": for any particular date, an
interest rate per annum equal to the interest rate (rounded
upwards, if necessary, to the nearest 1/16th of 1%) offered
in the interbank market to the Administrative Agent as the
overnight Federal Funds Rate at or about 10:00 A.M. New York
City time, on such day (or if such day is not a Business
Day, for the next preceding Business Day).
"Fee Mortgages": the Fee Mortgages to be executed and
delivered by the Borrower, Motor Wheel and certain other
Domestic Subsidiaries of the Borrower, substantially in the
form of Exhibit B-2, as the same may be amended, supplement-
ed or otherwise modified from time to time.
"Financing Lease": any lease of property, real or
personal, the obligations of the lessee in respect of which
are required in accordance with GAAP to be capitalized on a
balance sheet of the lessee.
"Fixed Charge Coverage Ratio": as of the end of each
fiscal quarter of the Borrower, for the twelve month period
ending on such date, with respect to the Borrower and its
Subsidiaries on a consolidated basis, the ratio of (a)
EBITDA for the applicable period (after giving effect to the
Interim Adjustments for the calculations occurring on Octo-
ber 31, 1996, January 31, 1997 and April 30, 1997), minus an
amount equal to the excess of (i) Capital Expenditures for
the applicable period (after giving effect to the Interim
Adjustments for the calculations occurring on October 31,
1996, January 31, 1997 and April 30, 1997) over (ii) the sum
of (x) $20,000,000 (which amount approximates Capital Expen-
ditures relating to normal replacement and maintenance
programs) and (y) an amount, for the twelve month periods
ending on October 31, 1996 and January 31, 1997, equal to
$27,000,000 and, for the twelve month periods ending on
April 30, 1997, July 31, 1997, October 31, 1997 and Janu-
ary 31, 1998, equal to $23,000,000 (which amounts relate to
Capital Expenditures expected to be made in connection with
the Ford Ranger program) to (b) the sum of (i) cash Interest
Expense for the applicable period (after giving effect to
the Interim Adjustments for the calculations occurring on
October 31, 1996, January 31, 1997 and April 30, 1997), plus
(ii) scheduled payments of principal on the Term Loans for
the applicable period.
"Foreign Stock Pledge Agreements": the collective
reference to the Stock Pledge Agreements to be executed and
delivered by the Borrower and certain of its Domestic Sub-
sidiaries, in form and substance reasonably satisfactory to
the Administrative Agent, pursuant to which 65% of the
Capital Stock of the Borrower's and its Domestic
Subsidiaries' direct Foreign Subsidiaries (other than Motor
Wheel Corporation of Canada Ltd., a corporation organized
and existing under the laws of Canada), including, without
limitation, Hayes Wheels, S.p.A., a company organized and
existing under the laws of Italy ("Hayes Wheels Italy"),
Hayes Wheels de Espana, S.A., a company organized and exist-
ing under the laws of Spain ("Hayes Wheels Spain"), and
Motor Wheel de Mexico S.A. de C.V., a company organized and
existing under the laws of Mexico ("Motor Wheel Mexico"),
shall be pledged, to the extent such Capital Stock shall not
be pledged as collateral security pursuant to the Guarantee
and Collateral Agreement, as collateral security to secure
the obligations and liabilities of the Borrower and such
Domestic Subsidiaries of the Borrower hereunder and under
any of the other Loan Documents, as the same may be amended,
supplemented or otherwise modified from time to time.
"Foreign Subsidiary": any Subsidiary of the Borrower
organized under the laws of any jurisdiction outside the
United States of America.
"GAAP": generally accepted accounting principles in
the United States of America consistent with those utilized
in preparing the audited financial statements referred to in
subsection 5.1; provided, however, that, for purposes of
subsection 7.1, GAAP shall mean generally accepted account-
ing principles in the United States of America as in effect
at the time of the applicable financial statements.
"Governmental Authority": any nation or government,
any state or other political subdivision thereof and any
entity (including, without limitation, any central bank)
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
For purposes of subsections 4.9, 4.10 and 11.15, the term
"Governmental Authority" shall be deemed to include, without
limitation, the National Association of Insurance Commis-
sioners.
"Guarantee": as defined in the definition of "Guaran-
tor."
"Guarantee and Collateral Agreement": the Guarantee
and Collateral Agreement to be executed and delivered by the
Borrower and each of its Domestic Subsidiaries, substantial-
ly in the form of Exhibit B-1, as the same may be amended,
supplemented or otherwise modified from time to time.
"Guarantee Obligation": as to any Person (the "guaran-
teeing person"), any obligation of (a) the guaranteeing
person or (b) another Person (including, without limitation,
any bank under any letter of credit) to induce the creation
of which the guaranteeing person has issued a reimbursement,
counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness,
leases, dividends or other obligations (the "primary obliga-
tions") of any other third Person (the "primary obligor") in
any manner, whether directly or indirectly, including,
without limitation, any obligation of the guaranteeing
person, whether or not contingent, (i) to purchase any such
primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds
(1) for the purchase or payment of any such primary obliga-
tion or (2) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth
or solvency of the primary obligor, (iii) to purchase prop-
erty, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold
harmless the owner of any such primary obligation against
loss in respect thereof; provided, however, that the term
Guarantee Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course
of business. The amount of any Guarantee Obligation of any
guaranteeing person shall be deemed to be the lower of (a)
an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Guarantee Obli-
gation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of
the instrument embodying such Guarantee Obligation, unless
such primary obligation and the maximum amount for which
such guaranteeing person may be liable are not stated or
determinable, in which case the amount of such Guarantee
Obligation shall be such guaranteeing person's maximum
reasonably anticipated liability in respect thereof as
determined by the Borrower in good faith.
"Guarantor": any Person which is now or hereafter a
party to (a) the Guarantee and Collateral Agreement or (b)
any other guarantee (a "Guarantee") hereafter delivered to
the Administrative Agent guaranteeing the obligations and
liabilities of each of the Loan Parties hereunder or under
any other Loan Documents, including, without limitations,
any guarantee delivered pursuant to subsection 7.10.
"Hayes Wheels Italy": as defined in the definition of
"Foreign Stock Pledge Agreements."
"Hayes Wheels Spain": as defined in the definition of
"Foreign Stock Pledge Agreements."
"Holdings": as defined in the recitals hereto.
"Indebtedness": at any date, an amount equal to (a)
all indebtedness of such Person for borrowed money or for
the deferred purchase price of property or services (other
than current trade liabilities incurred in the ordinary
course of business and payable in accordance with customary
practices), (b) any other indebtedness of such Person which
is evidenced by a note, bond, debenture or similar instru-
ment, (c) all obligations of such Person under Financing
Leases, (d) all obligations of such Person in respect of
acceptances issued or created for the account of such Per-
son, (e) for purposes of subsection 8.2 and Section 9(e),
all obligations of such Person in respect of interest rate
protection agreements, interest rate futures, interest rate
options, interest rate caps and any other interest rate,
currency, commodity or other hedging arrangement and (f) all
liabilities of another Person secured by any Lien on any
property owned by such Person whether or not such Person has
assumed or otherwise become liable for the payment thereof.
"Insolvency": with respect to any Multiemployer Plan,
the condition that such Plan is insolvent within the meaning
of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Interest Coverage Ratio": as of the end of each
fiscal quarter of the Borrower, for the twelve month period
ending on such date, with respect to the Borrower and its
Subsidiaries on a consolidated basis, the ratio of (a)
EBITDA for the applicable period to (b) cash Interest Ex-
pense for the applicable period (in each case, after giving
effect to the Interim Adjustments for the calculations
occurring on October 31, 1996, January 31, 1997 and April
30, 1997).
"Interest Expense": for any period and without dupli-
cation, with respect to the Borrower and its Subsidiaries on
a consolidated basis, (a) the aggregate amount of interest
which would be set forth opposite the caption "interest
expense" or any like caption on an income statement for the
Borrower and its Subsidiaries on a consolidated basis,
determined in accordance with GAAP, for such period plus, to
the extent not included in such interest, (i) imputed inter-
est included in Financing Leases for such period, (ii) all
commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financ-
ing permitted by subsection 8.2 for such period; (iii) the
net payments made in connection with Interest Rate Protec-
tion Agreements for such period, (iv) the interest portion
of any deferred payment obligation for such period, (v)
amortization of discount or premium, if any, for such peri-
od, (vi) all other non-cash interest expense (other than
interest amortized to cost of sales) for such period, (vii)
all net capitalized interest for such period and (viii) all
interest paid under any Guarantee Obligation, minus (b) net
payments received in connection with Interest Rate Protec-
tion Agreements for such period, minus (c) amortization of
deferred financing costs and expenses for such period.
"Interest Payment Date": (a) as to any ABR Loan, the
last day of each April, July, October and January, (b) as to
any Eurodollar Loan having an Interest Period of three
months or less, the last day of such Interest Period, and
(c) as to any Eurodollar Loan having an Interest Period
longer than three months each day which is three months, or
a whole multiple thereof, after the first day of such Inter-
est Period and the last day of such Interest Period.
"Interest Period": (d) with respect to any Eurodollar
Loan:
(i) initially, the period commencing on the
borrowing or conversion date, as the case may be, with
respect to such Eurodollar Loan and ending one, two,
three or six months thereafter, as selected by the
Borrower in its notice of borrowing or notice of con-
version, as the case may be, given with respect there-
to; and
(ii) thereafter, each period commencing on the
last day of the next preceding Interest Period applica-
ble to such Eurodollar Loan and ending one, two, three
or six months thereafter, as selected by the Borrower
by irrevocable notice to the Administrative Agent not
less than three Business Days prior to the last day of
the then current Interest Period with respect thereto;
provided that, all of the foregoing provisions relating to
Interest Periods are subject to the following:
(1) if any Interest Period pertaining to a Euro-
dollar Loan would otherwise end on a day that is not a
Business Day, such Interest Period shall be extended to
the next succeeding Business Day unless the result of
such extension would be to carry such Interest Period
into another calendar month in which event such Inter-
est Period shall end on the immediately preceding
Business Day;
(2) any Interest Period that would otherwise
extend beyond (a) the Revolving Credit Commitment
Termination Date (in the case of Revolving Credit
Loans) would end on the Revolving Credit Commitment
Termination Date, (b) the Tranche A Maturity Date (in
the case of the Tranche A Term Loans) would end on the
Tranche A Maturity Date, (c) the Tranche B Maturity
Date (in the case of the Tranche B Term Loans) would
end on the Tranche B Maturity Date, or (d) the Tranche
C Maturity Date (in the case of the Tranche C Term
Loans) would end on the Tranche C Maturity Date;
(3) any Interest Period pertaining to a Eurodollar
Loan that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Business
Day of a calendar month; and
(4) the Borrower shall select Interest Periods so
as not to require a payment or prepayment of any Euro-
dollar Loan during an Interest Period for such Loan.
"Interest Rate Protection Agreement": any interest
rate protection agreement, interest rate future, interest
rate option, interest rate cap or collar or other interest
rate hedge arrangement, to or under which the Borrower or
any of its Subsidiaries is a party or a beneficiary on the
Closing Date or becomes a party or a beneficiary after the
Closing Date.
"Interim Adjustments": for the first three full fiscal
quarters of the Borrower following the Closing Date (or, in
the case of the Leverage Ratio, the third full fiscal quar-
ter of the Borrower following the Closing Date), the Fixed
Charge Coverage Ratio, the Interest Coverage Ratio and the
Leverage Ratio shall be calculated using the adjustments and
assumptions set forth below:
(a) for the three full fiscal quarters ending on
October 31, 1996, January 31, 1997 and April 30, 1997,
Interest Expense for the twelve month period for which
the Fixed Charge Coverage Ratio and the Interest Cover-
age Ratio are being calculated shall be deemed to be
the result obtained by multiplying (i) the actual
Interest Expense for the period from the Closing Date
through the last day of such fiscal quarter times (ii)
a ratio equal to (x) 365 divided by (y) the number of
days elapsed from the Closing Date until the last day
of such fiscal quarter;
(b) for the fiscal quarter ending on July 31,
1997 and each fiscal quarter thereafter, Interest
Expense shall be the actual Interest Expense for the
twelve month period ending on such date;
(c) for the three full fiscal quarters ending on
October 31, 1996, January 31, 1997 and April 30, 1997
(or, in the case of the Leverage Ratio, the full fiscal
quarter ending on April 30, 1997), EBITDA and Capital
Expenditures for the twelve month period for which the
Fixed Charge Coverage Ratio and (in the case of EBITDA
only) the Interest Coverage Ratio and the Leverage
Ratio are being calculated shall be the actual EBITDA
and Capital Expenditures of the Borrower and Motor
Wheel on a pro forma basis as if the Merger had been
consummated on the first day of such period; and
(d) for the fiscal quarter ending on July 31,
1997 and each fiscal quarter thereafter, EBITDA and
Capital Expenditures shall be the actual EBITDA and
Capital Expenditures for the twelve month period ending
on such date.
"Investment": as defined in subsection 8.10.
"Issuing Lender": CIBC or any of its affiliates.
"JLL": Joseph Littlejohn & Levy Fund II, L.P., a
Delaware limited partnership, or any other fund controlled
by Joseph, Littlejohn & Levy.
"L/C Commitment": $75,000,000.
"L/C Fee Payment Date": the last day of each April,
July, October and January.
"L/C Obligations": at any date, the sum of (a) the
aggregate amount then available to be drawn under all out-
standing Letters of Credit and (b) the aggregate amount of
drawings under Letters of Credit which have not then been
reimbursed by the Borrower pursuant to subsection 3.5.
"L/C Participants": the collective reference to all
the Revolving Credit Lenders other than the Issuing Lender.
"L/C Participating Interest": with respect to any
Letter of Credit (a) in the case of the Issuing Lender with
respect thereto, its interest in such Letter of Credit and
any Letter of Credit Application relating thereto after
giving effect to the granting of participating interests
therein, if any, pursuant hereto and (b) in the case of each
L/C Participant, its undivided participating interest in
such Letter of Credit and any Letter of Credit Application
relating thereto.
"Lease Expense": for any period, the aggregate amount
of fixed and contingent rentals payable by the Borrower and
its Subsidiaries for such period, determined on a consoli-
dated basis in accordance with GAAP, with respect to leases
(other than Financing Leases) of real and personal property.
"Leasehold Mortgages": the Leasehold Mortgages to be
executed and delivered by the Borrower, Motor Wheel and
certain other Domestic Subsidiaries of the Borrower, sub-
stantially in the form of Exhibit B-3, as the same may be
amended, supplemented or otherwise modified from time to
time.
"Lenders": as defined in the preamble hereto and
including, without limitation, the Swing Line Lender and the
Issuing Lender.
"Letters of Credit": as defined in subsection 3.1.
"Letter of Credit Application": an application in such
form as the Issuing Lender may specify from time to time,
requesting the Issuing Lender to open a Letter of Credit.
"Leverage Ratio": as of the end of each fiscal quarter
of the Borrower, with respect to the Borrower and its Sub-
sidiaries on a consolidated basis, the ratio of (a) Total
Indebtedness on such date to (b) EBITDA for the twelve month
period ending on such date (after giving effect to the
Interim Adjustments for the calculations occurring on April
30, 1997).
"Lien": any mortgage, pledge, hypothecation, deposit
arrangement, encumbrance, lien (statutory or other), charge
or other security interest or any preference, priority or
other security agreement or preferential arrangement of any
kind or nature whatsoever (including, without limitation,
any conditional sale or other title retention agreement and
any Financing Lease having substantially the same economic
effect as any of the foregoing).
"Loan": any loan made by any Lender pursuant to this
Agreement.
"Loan Documents": this Agreement, any Notes, any
Letter of Credit Applications, any Letters of Credit, the
Security Documents and any Guarantees.
"Loan Parties": the Borrower, Motor Wheel and each
Subsidiary of the Borrower which is a party to a Loan Docu-
ment, individually, a "Loan Party".
"Majority Lenders": at any time, Lenders the Commit-
ment Percentages of which aggregate more than 50%.
"Managing Agents": the collective reference to the
Administrative Agent and the Documentation Agent.
"Material Adverse Effect": a material adverse effect
on (a) the business, operations, property, condition (finan-
cial or otherwise) or prospects of, prior to the consumma-
tion of the Merger, the Borrower, Holdings and their respec-
tive Subsidiaries taken as a whole and, following the con-
summation of the Merger, the Borrower and its Subsidiaries
taken as a whole or (b) the validity or enforceability of
this Agreement or any of the other Loan Documents or the
rights or remedies of the Administrative Agent or the Lend-
ers hereunder or thereunder.
"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or
petroleum products, polychlorinated biphenyls, urea-formal-
dehyde insulation, asbestos or asbestos-containing materi-
als, pollutants, contaminants, radioactivity, and any other
substances of any kind, whether or not any such substance is
defined as hazardous or toxic under any Environmental Law,
that is regulated pursuant to or could give rise to liabili-
ty under any Environmental Law.
"Merger": as defined in the recitals hereto.
"Merger Agreement": as defined in the recitals hereto.
"Merrill Lynch": Merrill Lynch Capital Corporation.
"Moody's": as defined in the definition of "Cash
Equivalents."
"Mortgages": the collective reference to the Fee
Mortgages and the Leasehold Mortgages.
"Motor Wheel": as defined in the recitals hereto.
"Motor Wheel Mexico": as defined in the definition of
"Foreign Stock Pledge Agreements."
"Motor Wheel Notes": the 11-1/2% Senior Notes due March
1, 2000, in an original aggregate principal amount of
$125,000,000, of Motor Wheel, as the same have been amended,
supplemented or otherwise modified from time to time.
"Motor Wheel Redemption": as defined in the recitals
hereto.
"Multiemployer Plan": a Plan which is a multiemployer
plan as defined in Section 4001(a)(3) of ERISA.
"NBI": as defined in the definition of "Change of
Control."
"Net Cash Proceeds": (a) with respect to any sale or
other disposition of assets by the Borrower or any of its
Subsidiaries, the net amount equal to the aggregate amount
received in cash (including any cash received by way of
deferred payment pursuant to a note receivable, other non-
cash consideration or otherwise, but only as and when such
cash is so received) minus the sum of (i) the reasonable
fees, commissions and other out-of-pocket expenses incurred
by the Borrower or such Subsidiary in connection with such
sale or other disposition, (ii) federal, state and local
taxes incurred in connection with such sale or other dispo-
sition, whether payable at such time or thereafter and (iii)
in the case of any such sale or other disposition of assets
subject to a Lien securing any Indebtedness (which Lien and
Indebtedness are permitted by this Agreement), any amounts
required to be repaid by the Borrower or such Subsidiary in
respect of such Indebtedness (other than Indebtedness under
this Agreement and any Notes) in connection with such sale
or other disposition; and
(b) with respect to any issuance, sale or other dispo-
sition of any debt security by the Borrower or any of its
Subsidiaries (other than to the Borrower or any of its
Subsidiaries), the net amount equal to the aggregate amount
received in cash in connection with such issuance, sale or
other disposition minus the sum of (i) the reasonable fees,
commissions and other out-of-pocket expenses incurred by the
Borrower or such Subsidiary in connection with such issu-
ance, sale or other disposition and (ii) federal, state and
local taxes incurred in connection with such issuance, sale
or other disposition, whether payable at such time or there-
after.
"Net Income": for any period, the aggregate of the net
income of the Borrower and its Subsidiaries for such period
on a consolidated basis, determined in accordance with GAAP,
for such period; provided, however, that there shall be
excluded from Net Income (a) the net income of a Person
whose net income is not consolidated with the Borrower's
under GAAP (other than the amount of dividends and other
distributions paid or made by such Person to the Borrower or
any of its Subsidiaries during such period), (b) the net
income of any Person for such period acquired in a pooling
of interests transaction for any period prior to the date of
such acquisition, (c) any net gain or loss for such period
(net of the related tax effect thereof) resulting from any
sale or other disposition of assets or any sale or other
disposition of any Capital Stock of any Person by the Bor-
rower or any of its Subsidiaries, in each case, other than
in the ordinary course of business and permitted by subsec-
tion 8.6, (d) extraordinary gains and losses for such period
(net of the related tax effect thereof), (e) non-recurring
gains and losses for such period (net of the related tax
effect thereof) and (f) cash returns on or on account of
Investments permitted under subsection 8.10(g); provided
that there shall be added back to Net Income non-cash re-
structuring charges deducted in calculating Net Income for
such period.
"New Borrower Investors": JLL, CIBC WG Argosy Merchant
Fund 2, L.L.C., TSG Capital Fund II, L.P., Nomura Holding
America, Inc. and Chase Equity Associates, L.P. and their
respective Affiliates.
"New Common Stock": as defined in the recitals hereto.
"Non-Excluded Taxes": as defined in subsection 4.11.
"Notes": the collective reference to the Revolving
Credit Notes, the Swing Line Note and the Term Notes, if
any.
"Outstanding Amount": as defined in subsection 2.8(c).
"Participant": as defined in subsection 11.6(b).
"PBGC": the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA.
"PBGC Term Sheet": the Hayes Wheels Int'l Inc. - PBGC
Term Sheet dated June 25, 1996 between the Borrower and the
PBGC with respect to, among other things, the funding levels
of certain pension plans of the Borrower and Motor Wheel.
"Permitted Hedging Arrangement": as defined in subsec-
tion 8.16.
"Person": an individual, partnership, corporation,
limited liability company, business trust, joint stock
company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit
plan which is covered by ERISA and in respect of which the
Borrower or a Commonly Controlled Entity is (or, if such
plan were terminated at such time, would under Section 4069
of ERISA be deemed to be) an "employer" as defined in Sec-
tion 3(5) of ERISA.
"Register": as defined in subsection 11.6(d).
"Regulation U": Regulation U of the Board of Governors
of the Federal Reserve System as in effect from time to
time.
"Reimbursement Obligations": the obligation of the
Borrower to reimburse the Issuing Lender pursuant to subsec-
tion 3.5 for amounts drawn under Letters of Credit.
"Reorganization": with respect to any Multiemployer
Plan, the condition that such plan is in reorganization
within the meaning of Section 4241 of ERISA.
"Reportable Event": any of the events set forth in
Section 4043 of ERISA, other than those events as to which
the thirty day notice period is waived under subsections
.13, .14, .16, .18, .19 or .20 of PBGC Reg. SECTION 2615.
"Requirement of Law": as to any Person, the Certifi-
cate of Incorporation and By-Laws or other organizational or
governing documents of such Person, and any law, treaty,
rule or regulation or determination of an arbitrator or a
court or other Governmental Authority, in each case applica-
ble to or binding upon such Person or any of its property or
to which such Person or any of its property is subject.
"Responsible Officer": the chief executive officer,
the president and the general counsel of the Borrower or,
with respect to financial matters, the chief financial
officer and the treasurer of the Borrower.
"Revolving Credit Commitment": as to any Revolving
Credit Lender, its obligation to make Revolving Credit Loans
to, and/or make or participate in Swing Line Loans made to,
and/or issue or participate in Letters of Credit issued on
behalf of, the Borrower in an aggregate amount not to exceed
at any one time outstanding the amount set forth under such
Revolving Credit Lender's name in Schedule A opposite the
heading "Revolving Credit Commitment" or, in the case of any
Lender that is an Assignee, the amount of the assigning
Lender's Revolving Credit Commitment assigned to such As-
signee pursuant to subsection 11.6 (in each case as such
amount may be adjusted from time to time as provided here-
in).
"Revolving Credit Commitment Percentage": as to any
Revolving Credit Lender, the percentage of the aggregate
Revolving Credit Commitments constituted by its Revolving
Credit Commitment (or, if the Revolving Credit Commitments
have terminated or expired, the percentage which (i) the sum
of (a) such Lender's then outstanding Revolving Credit Loans
plus (b) such Lender's interests in the aggregate L/C Obli-
gations and Swing Line Loans then outstanding then consti-
tutes of (ii) the sum of (a) the aggregate Revolving Credit
Loans of all the Revolving Credit Lenders then outstanding
plus (b) the aggregate L/C Obligations and Swing Line Loans
then outstanding).
"Revolving Credit Commitment Period": the period from
and including the Closing Date to but not including the
Revolving Credit Commitment Termination Date.
"Revolving Credit Commitment Termination Date": the
earlier of (a) July 31, 2002 or, if such date is not a
Business Day, the Business Day next preceding such date and
(b) the date upon which the Revolving Credit Commitments
shall be terminated pursuant hereto.
"Revolving Credit Facility": as defined in the recit-
als to this Agreement.
"Revolving Credit Lender": any Lender having a Revolv-
ing Credit Commitment or that holds outstanding Revolving
Credit Loans or L/C Participating Interests hereunder.
"Revolving Credit Loans": as defined in subsection
2.1.
"Revolving Credit Note": as defined in subsection 2.2.
"Securities Act": the Securities Act of 1933, as
amended from time to time.
"Security Documents": the collective reference to the
Guarantee and Collateral Agreement, the Foreign Stock Pledge
Agreements, the Copyright, Patent and Trademark Security
Agreement, the Fee Mortgages and the Leasehold Mortgages and
all other security documents hereafter delivered to the
Administrative Agent granting a Lien on any asset or assets
of any Person to secure the obligations and liabilities of
the Borrower hereunder or under any of the other Loan Docu-
ments or to secure any guarantee of any such obligations and
liabilities, including, without limitation, any security
document delivered pursuant to subsection 7.10.
"Senior Subordinated Notes": the Senior Subordinated
Notes due 2006 of the Borrower in an aggregate principal
amount of $250,000,000 issued pursuant to the Senior Subor-
dinated Notes Indenture, as the same may be amended, supple-
mented or otherwise modified from time to time in accordance
with subsection 8.11.
"Senior Subordinated Notes Indenture": the Indenture
to be dated as of the Closing Date between the Borrower and
Comerica Bank, as trustee, as the same may be amended,
supplemented or otherwise modified from time to time in
accordance with subsection 8.11.
"Single Employer Plan": any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan.
"S&P": as defined in the definition of "Cash Equiva-
lents."
"Subscription Agreements": as defined in the recitals
hereto.
"Subsidiary": as to any Person, a corporation, part-
nership, limited liability company or other entity of which
shares of stock or other ownership interests having ordinary
voting power (other than stock or such other ownership
interests having such power only by reason of the happening
of a contingency) to elect a majority of the board of direc-
tors or other managers of such corporation, partnership or
other entity ("Voting Stock") are at the time owned, or the
management of which is otherwise controlled, directly or
indirectly through one or more intermediaries, or both, by
such Person. Unless otherwise qualified, all references to
a "Subsidiary" or to "Subsidiaries" in this Agreement shall
refer to a Subsidiary or Subsidiaries of the Borrower. For
purposes of this Agreement, Autokola shall not be deemed a
Subsidiary of the Borrower until such time as the Borrower
owns a majority of the Voting Stock thereof.
"Swing Line Commitment": the Swing Line Lender's
obligation to make Swing Line Loans pursuant to subsection
2.6.
"Swing Line Lender": CIBC in its capacity as provider
of the Swing Line Loans.
"Swing Line Loans": as defined in subsection 2.6.
"Swing Line Note": as defined in subsection 2.6(b).
"Term Facility": as defined in the recitals to this
Agreement.
"Term Loan": as defined in subsection 2.7.
"Term Loan Commitments": the collective reference to
the Tranche A Term Loan Commitments, the Tranche B Term Loan
Commitments and the Tranche C Term Loan Commitments; collec-
tively, as to all the Term Loan Lenders, the "Term Commit-
ments."
"Term Loan Lenders": the collective reference to the
Tranche A Term Loan Lenders, the Tranche B Term Loan Lenders
and the Tranche C Term Loan Lenders.
"Term Note" and "Term Notes": as defined in subsection
2.10.
"Total Indebtedness": on any date, with respect to the
Borrower and its Subsidiaries on a consolidated basis, all
Indebtedness of the Borrower and its Subsidiaries on such
date.
"Tranche": the collective reference to Eurodollar
Loans the then current Interest Periods with respect to all
of which begin on the same date and end on the same later
date (whether or not such Loans shall originally have been
made on the same day).
"Tranche A Maturity Date": July 31, 2002.
"Tranche A Term Loan Commitment": as to any Tranche A
Term Loan Lender, its obligation to make a Tranche A Term
Loan to the Borrower pursuant to subsection 2.7 in an aggre-
gate amount equal to the amount set forth under such Tranche
A Term Loan Lender's name in Schedule A opposite the heading
"Tranche A Term Loan Commitment", subject to reduction as
provided for in subsection 2.8(c), collectively, the
"Tranche A Term Loan Commitments".
"Tranche A Term Loan Commitment Percentage": as to any
Tranche A Term Loan Lender, the percentage of the aggregate
Tranche A Term Loan Commitments constituted by its Tranche A
Term Loan Commitment or, following the Closing Date, the
percentage of the aggregate outstanding Tranche A Term Loans
constituted by its Tranche A Term Loan.
"Tranche A Term Loan Lender": any Lender having a
Tranche A Term Loan Commitment hereunder or that holds
outstanding Tranche A Term Loans.
"Tranche A Term Loan": as defined in subsection 2.7.
"Tranche A Term Note": as defined in subsection
2.8(a).
"Tranche B Maturity Date": July 31, 2003.
"Tranche B Term Loan Commitment": as to any Tranche B
Term Loan Lender, its obligation to make a Tranche B Term
Loan to the Borrower pursuant to subsection 2.7 in an aggre-
gate amount equal to the amount set forth under such Tranche
B Term Loan Lender's name in Schedule A opposite the heading
"Tranche B Term Loan Commitment" collectively, the "Tranche
B Term Loan Commitments".
"Tranche B Term Loan Commitment Percentage": as to any
Tranche B Term Loan Lender, the percentage of the aggregate
Tranche B Term Loan Commitments constituted by its Tranche B
Term Loan Commitment or, following the Closing Date, the
percentage of the aggregate outstanding Tranche B Term Loans
constituted by its Tranche B Term Loan.
"Tranche B Term Loan Lender": any Lender having a
Tranche B Term Loan Commitment hereunder or that holds
outstanding Tranche B Term Loans.
"Tranche B Term Loan": as defined in subsection 2.7.
"Tranche B Term Note": as defined in subsection
2.9(a).
"Tranche C Maturity Date": July 31, 2004.
"Tranche C Term Loan Commitment": as to any Tranche C
Term Loan Lender, its obligation to make a Tranche C Term
Loan to the Borrower pursuant to subsection 2.7 in an aggre-
gate amount equal to the amount set forth under such Tranche
C Term Loan Lender's name in Schedule A opposite the heading
"Tranche C Term Loan Commitment"; collectively, the "Tranche
C Term Loan Commitments".
"Tranche C Term Loan Commitment Percentage": as to any
Tranche C Term Loan Lender, the percentage of the aggregate
Tranche C Term Loan Commitments constituted by its Tranche C
Term Loan Commitment or, following the Closing Date, the
percentage of the aggregate outstanding Tranche C Term Loans
constituted by its Tranche C Term Loan.
"Tranche C Term Loan Lender": any Lender having a
Tranche C Term Loan Commitment hereunder or that holds
outstanding Tranche C Term Loans.
"Tranche C Term Loan": as defined in subsection 2.7.
"Tranche C Term Note": as defined in subsection
2.10(a).
"Transactions": the collective reference to the Merg-
er, the Equity Investment, the Debt Tender Offer, the Motor
Wheel Redemption and the issuance of the Senior Subordinated
Notes.
"Transaction Documents": the collective reference to
the Merger Agreement, the Senior Subordinated Notes Inden-
ture, the Subscription Agreements and the other documents
listed on Schedule C, as the same may be amended, supple-
mented or otherwise modified from time to time in accordance
with subsection 8.11.
"Transferee": as defined in subsection 11.6(f).
"Type": as to any Loan, its nature as an ABR Loan or a
Eurodollar Loan.
"Uniform Customs": the Uniform Customs and Practice
for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500, as the same may be
amended from time to time.
"Wholly Owned Subsidiary": means any Subsidiary, all
of the outstanding voting securities (other than directors'
qualifying shares or shares held pursuant to similar re-
quirements of law in respect of Foreign Subsidiaries) of
which are owned, directly or indirectly, by the Borrower.
"Working Capital": on any date, with respect to the
Borrower and its Subsidiaries on a consolidated basis, the
Current Assets (other than cash and Cash Equivalents) of the
Borrower and its Subsidiaries on such date, minus the Cur-
rent Liabilities (other than the current portion of long
term Indebtedness and short term Indebtedness of Foreign
Subsidiaries) of the Borrower and its Subsidiaries on such
date.
1.2 Other Definitional Provisions. (a) Unless
otherwise specified therein, all terms defined in this Agreement
shall have the defined meanings when used in any Notes, any other
Loan Documents or any certificate or other document made or
delivered pursuant hereto.
(b) As used herein and in any Notes, any other Loan
Documents and any certificate or other document made or delivered
pursuant hereto, accounting terms relating to the Borrower and
its Subsidiaries not defined in subsection 1.1 and accounting
terms partly defined in subsection 1.1, to the extent not de-
fined, shall have the respective meanings given to them under
GAAP.
(c) The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision
of this Agreement, and Section, subsection, Schedule and Exhibit
references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall
be equally applicable to both the singular and plural forms of
such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Revolving Credit Commitments. (a) Subject to the
terms and conditions hereof, each Revolving Credit Lender sever-
ally agrees to make revolving credit loans (each a "Revolving
Credit Loan", collectively, "Revolving Credit Loans") to the
Borrower from time to time during the Revolving Credit Commitment
Period in an aggregate principal amount at any one time outstand-
ing which, when added to such Revolving Credit Lender's Commit-
ment Percentage of the then outstanding L/C Obligations and Swing
Line Loans, does not exceed the amount of such Lender's Revolving
Credit Commitment. During the Revolving Credit Commitment
Period, the Borrower may use the Revolving Credit Commitments by
borrowing, prepaying the Revolving Credit Loans in whole or in
part, and reborrowing, all in accordance with the terms and
conditions hereof, provided, however, that (i) not more than
$100,000,000 in aggregate principal amount of the Revolving
Credit Loans may be borrowed on the Closing Date and (ii) the
Aggregate Outstanding Revolving Credit (other than in respect of
the undrawn portion of any Letters of Credit) with respect to all
Revolving Credit Lenders (including the Swing Line Lender) at any
time during any consecutive thirty day period during each fiscal
year of the Borrower (such thirty day period during each fiscal
year to be selected by the Borrower) may in no event exceed the
Clean-Down Amount.
(b) The Revolving Credit Loans may from time to time
be (i) Eurodollar Loans, (ii) ABR Loans or (iii) a combination
thereof, as determined by the Borrower and notified to the
Administrative Agent in accordance with subsections 2.3 and 4.4,
provided that no Revolving Credit Loan shall be made as a Euro-
dollar Loan after the day that is one month prior to the Revolv-
ing Credit Commitment Termination Date.
2.2 Revolving Credit Notes. The Borrower agrees that,
upon the request to the Administrative Agent by any Revolving
Credit Lender made on or prior to the Closing Date or in connec-
tion with any assignment pursuant to subsection 11.6, to evidence
such Lender's Revolving Credit Loans the Borrower will execute
and deliver to such Lender a promissory note substantially in the
form of Exhibit A-1, with appropriate insertions as to payee,
date and principal amount (each, as amended, supplemented,
replaced or otherwise modified from time to time, a "Revolving
Credit Note"), payable to the order of such Lender and in a
principal amount equal to the lesser of (a) the amount set forth
under such Lender's name in Schedule A opposite the heading
"Revolving Credit Commitment" and (b) the aggregate unpaid
principal amount of all Revolving Credit Loans made by such
Lender to such Borrower. Each Revolving Credit Note shall (x) be
dated the Closing Date, (y) be stated to mature on the Revolving
Credit Commitment Termination Date and (z) provide for the
payment of interest in accordance with subsection 4.1.
2.3 Procedure for Revolving Credit Borrowing. The
Borrower may borrow under the Revolving Credit Commitments during
the Revolving Credit Commitment Period on any Business Day,
provided that the Borrower shall give the Administrative Agent
irrevocable notice (which notice must be received by the Adminis-
trative Agent prior to 11:00 A.M., New York City time, (a) three
Business Days prior to the requested Borrowing Date, if all or
any part of the requested Revolving Credit Loans are to be
initially Eurodollar Loans or (b) on the requested Borrowing
Date, otherwise), specifying (i) the amount to be borrowed, (ii)
the requested Borrowing Date, (iii) whether the borrowing is to
be of Eurodollar Loans, ABR Loans or a combination thereof and
(iv) if the borrowing is to be entirely or partly of Eurodollar
Loans, the respective amount of such Type of Loan and the respec-
tive length of the initial Interest Period therefor. Each
borrowing under the Revolving Credit Commitments shall be in an
amount equal to (x) in the case of ABR Loans, $1,000,000 or a
whole multiple thereof (or, if the aggregate Available Revolving
Credit Commitments then in effect are less than $1,000,000, such
lesser amount) and (y) in the case of Eurodollar Loans,
$5,000,000 or a whole multiple of $1,000,000 in excess thereof.
Upon receipt of any such notice from the Borrower, the Adminis-
trative Agent shall promptly notify each Revolving Credit Lender
thereof. Each Revolving Credit Lender will make the amount of
its pro rata share of each borrowing available to the Administra-
tive Agent for the account of the Borrower at the office of the
Administrative Agent specified in subsection 11.2 prior to 1:00
P.M., New York City time, on the Borrowing Date requested by the
Borrower in funds immediately available to the Administrative
Agent. Such borrowing will then be made available to the Borrow-
er by the Administrative Agent crediting the account of the
Borrower on the books of such office with the aggregate of the
amounts made available to the Administrative Agent by the Revolv-
ing Credit Lenders and in like funds as received by the Adminis-
trative Agent.
2.4 Commitment Fees; Other Fees. (a) The Borrower
agrees to pay to the Administrative Agent for the account of each
Revolving Credit Lender, a commitment fee for the period from and
including the first day of the Revolving Credit Commitment Period
to the Revolving Credit Commitment Termination Date, computed at
the rate of 1/2 of 1% per annum (or, in the event that the
Applicable Margin applicable to Revolving Credit Loans is, in the
case of Eurodollar Loans, equal to or less than 1.75%, and, in
the case of ABR Loans, equal to or less than 0.75%, 3/8 of 1% per
annum) on the average daily amount of the Available Revolving
Credit Commitment of such Lender during the period for which
payment is made, payable quarterly in arrears on the last day of
each April, July, October and January and on the Revolving Credit
Commitment Termination Date, commencing on the first of such days
to occur after the Closing Date.
(b) The Borrower shall pay to CIBC, Merrill Lynch and
the Lenders the amounts set forth in the Fee Letter dated March
28, 1996 among CIBC, Merrill Lynch, Holdings and the Borrower on
the dates set forth therein.
2.5 Termination or Reduction of Revolving Credit
Commitments. (a) The Borrower shall have the right, upon not
less than three Business Days' notice to the Administrative Agent
(which will promptly notify the Lenders thereof), to terminate
the Revolving Credit Commitments or, from time to time, to reduce
the amount of the Revolving Credit Commitments; provided that no
such termination or reduction shall be permitted if, after giving
effect thereto and to any prepayments of the Revolving Credit
Loans and Swing Line Loans made on the effective date thereof,
the aggregate principal amount of the Revolving Credit Loans then
outstanding when added to the sum of the then outstanding L/C
Obligations and the then outstanding Swing Line Loans, would
exceed the Revolving Credit Commitments then in effect. Any such
reduction shall be in an amount equal to $1,000,000 or a whole
multiple of $500,000 in excess thereof and shall reduce perma-
nently the Revolving Credit Commitments then in effect.
(b) The Revolving Credit Commitments shall be automat-
ically reduced in connection with any reductions of the Revolving
Credit Commitments in accordance with subsection 4.3(e). Any
such reduction shall reduce permanently the Revolving Credit
Commitments then in effect.
2.6 Swing Line Commitments. (a) Subject to the terms
and conditions hereof, the Swing Line Lender agrees to make swing
line loans (individually, a "Swing Line Loan"; collectively, the
"Swing Line Loans") to the Borrower from time to time during the
Revolving Credit Commitment Period in an aggregate principal
amount at any one time outstanding not to exceed $15,000,000,
provided that at no time may the sum of the then outstanding
Swing Line Loans, Revolving Credit Loans and L/C Obligations
exceed the Revolving Credit Commitments then in effect. Amounts
borrowed by the Borrower under this subsection 2.6 may be repaid
and, through but excluding the Revolving Credit Commitment
Termination Date, reborrowed. All Swing Line Loans shall be made
as ABR Loans and shall not be entitled to be converted into
Eurodollar Loans. The Borrower shall give the Swing Line Lender
irrevocable notice (which notice must be received by the Swing
Line Lender prior to 12:00 Noon, New York City time) on the
requested Borrowing Date specifying the amount of the requested
Swing Line Loan which shall be in an amount equal to $500,000 or
a whole multiple of $100,000 in excess thereof. The proceeds of
the Swing Line Loan will be made available by the Swing Line
Lender to the Borrower at the office of the Swing Line Lender by
crediting the account of the Borrower at such office with such
proceeds in Dollars.
(b) The Borrower agrees that, upon the request to the
Administrative Agent by the Swing Line Lender made on or prior to
the Closing Date or in connection with any assignment pursuant to
subsection 11.6, to evidence the Swing Line Loans the Borrower
will execute and deliver to the Swing Line Lender a promissory
note substantially in the form of Exhibit A-5, with appropriate
insertions (as the same may be amended, supplemented, replaced or
otherwise modified from time to time, the "Swing Line Note"),
payable to the order of the Swing Line Lender and representing
the obligation of the Borrower to pay the amount of the Swing
Line Commitment or, if less, the unpaid principal amount of the
Swing Line Loans made to the Borrower, with interest thereon as
prescribed in subsection 4.1. The Swing Line Note shall (a) be
dated the Closing Date, (b) be stated to mature on the Revolving
Credit Commitment Termination Date and (c) provide for the
payment of interest in accordance with subsection 4.1.
(c) The Swing Line Lender, at any time in its sole and
absolute discretion may, and, at any time as there shall be a
Swing Line Loan outstanding for more than seven Business Days,
the Swing Line Lender shall, on behalf of the Borrower (which
hereby irrevocably directs and authorizes the Swing Line Lender
to act on its behalf), request each Revolving Credit Lender,
including the Swing Line Lender, to make a Revolving Credit Loan
as an ABR Loan in an amount equal to such Revolving Credit
Lender's Revolving Credit Commitment Percentage of the principal
amount of all of the Swing Line Loans (the "Refunded Swing Line
Loans") outstanding on the date such notice is given; provided
that the provisions of this subsection shall not affect the
obligations of the Borrower to prepay Swing Line Loans in accor-
dance with the provisions of subsection 4.2. Unless the Revolv-
ing Credit Commitments shall have expired or terminated for any
reason, including but not limited to, the occurrence of any of
the events described in paragraph (f) of Section 9 hereto with
respect to the Borrower (in which event the procedures of para-
graph (d) of this subsection 2.6 shall apply), each Revolving
Credit Lender will make the proceeds of its Revolving Credit Loan
available to the Administrative Agent for the account of the
Swing Line Lender at the office of the Administrative Agent prior
to 12:00 Noon, New York City time, in funds immediately available
on the Business Day next succeeding the date such notice is
given. The proceeds of such Revolving Credit Loans shall be
immediately applied to repay the Refunded Swing Line Loans.
(d) If the Revolving Credit Commitments shall expire
or terminate (for any reason, including but not limited to the
occurrence of any of the events described in paragraph (f) of
Section 9 hereto with respect to the Borrower) at any time while
Swing Line Loans are outstanding, each Revolving Credit Lender
shall, at the option of the Swing Line Lender exercised reason-
ably, either (i) notwithstanding the expiration or termination of
the Revolving Credit Commitments, make a Revolving Credit Loan as
an ABR Loan (which Revolving Credit Loan shall be deemed a
"Revolving Credit Loan" for all purposes of this Agreement and
the other Loan Documents) or (ii) purchase an undivided partici-
pating interest in such Swing Line Loans, in either case in an
amount equal to such Revolving Credit Lender's Revolving Credit
Commitment Percentage determined on the date of, and immediately
prior to, expiration or termination of the Revolving Credit
Commitments of the aggregate principal amount of such Swing Line
Loans. Each Revolving Credit Lender will make the proceeds of
any Revolving Credit Loan made pursuant to the immediately
preceding sentence available to the Administrative Agent for the
account of the Swing Line Lender at the office of the Administra-
tive Agent prior to 12:00 Noon, New York City time, in funds
immediately available on the Business Day next succeeding the
date on which the Revolving Credit Commitments expire or termi-
nate. The proceeds of such Revolving Credit Loans shall be
immediately applied to repay the Swing Line Loans outstanding on
the date of termination or expiration of the Revolving Credit
Commitments. In the event that the Revolving Credit Lenders
purchase undivided participating interests pursuant to the first
sentence of this paragraph (d), each Revolving Credit Lender
shall immediately transfer to the Swing Line Lender, in immedi-
ately available funds, the amount of its participation.
(e) Whenever, at any time after the Swing Line Lender
has received from any Revolving Credit Lender such Revolving
Credit Lender's participating interest in a Swing Line Loan and
the Swing Line Lender receives any payment on account thereof,
the Swing Line Lender will distribute to such Revolving Credit
Lender its participating interest in such amount (appropriately
adjusted, in the case of interest payments, to reflect the period
of time during which such Revolving Credit Lender's participating
interest was outstanding and funded); provided, however, that in
the event that such payment received by the Swing Line Lender is
required to be returned, such Revolving Credit Lender will return
to the Swing Line Lender any portion thereof previously distrib-
uted by the Swing Line Lender to it.
(f) Notwithstanding anything herein to the contrary,
the Swing Line Lender shall not be obligated to make any Swing
Line Loan if the conditions set forth in subsection 6.2 have not
been satisfied.
2.7 Term Loans. Subject to the terms and conditions
hereof, each Term Loan Lender severally agrees to make (a) a term
loan (a "Tranche A Term Loan") on the Closing Date in the princi-
pal amount set forth under such Lender's name in Schedule A
opposite the heading "Tranche A Term Loan Commitment", subject to
reduction as provided for in subsection 2.8(c), (b) a term loan
(a "Tranche B Term Loan") on the Closing Date in the principal
amount set forth under such Lender's name in Schedule A opposite
the heading "Tranche B Term Loan Commitment", and/or (c) a term
loan (a "Tranche C Term Loan", and together with the Tranche A
Term Loans and the Tranche B Term Loans, the "Term Loans") on the
Closing Date in the principal amount set forth under such
Lender's name in Schedule A opposite the heading "Tranche C Term
Loan Commitment". The Term Loans may from time to time be (a)
Eurodollar Loans, (b) ABR Loans or (c) a combination thereof, as
determined by the Borrower and notified to the Administrative
Agent in accordance with subsection 4.4. Amounts paid on account
of the Term Loans pursuant to subsections 2.8, 2.9 or 2.10 may
not be reborrowed.
2.8 Tranche A Term Notes. (a) The Borrower agrees
that, upon the request to the Administrative Agent by any Tranche
A Term Loan Lender made on or prior to the Closing Date or in
connection with any assignment pursuant to subsection 11.6, to
evidence such Lender's Tranche A Term Loan the Borrower will
execute and deliver to such Lender a promissory note substantial-
ly in the form of Exhibit A-2 (each, as amended, supplemented,
replaced or otherwise modified from time to time, a "Tranche A
Term Note"), with appropriate insertions therein as to payee,
date and principal amount, payable to the order of such Tranche A
Term Loan Lender and in a principal amount equal to the amount
set forth under such Tranche A Term Loan Lender's name on Sched-
ule A opposite the heading "Tranche A Term Loan Commitment." Any
Tranche A Term Note shall (i) be dated the Closing Date, (ii) be
payable as provided in subsection 2.8(b) and (iii) provide for
the payment of interest in accordance with subsection 4.1.
(b) The Tranche A Term Loans shall be payable in 22
consecutive quarterly installments, commencing on April 30, 1997,
on the dates and in the aggregate principal amount, subject to
adjustment as provided for in subsection 2.8(c), set forth below
(together with all accrued interest thereon) opposite the appli-
cable installment date (or, if less, the aggregate amount of the
Tranche A Term Loans then outstanding):
Installment Amount
April 30, 1997 $2,500,000
July 31, 1997 2,500,000
October 31, 1997 5,000,000
January 31, 1998 5,000,000
April 30, 1998 7,500,000
July 31, 1998 7,500,000
October 31, 1998 7,500,000
January 31, 1999 7,500,000
April 30, 1999 10,000,000
July 31, 1999 10,000,000
October 31, 1999 10,000,000
January 31, 2000 10,000,000
April 30, 2000 10,000,000
July 31, 2000 10,000,000
October 31, 2000 10,000,000
January 31, 2001 10,000,000
April 30, 2001 12,500,000
July 31, 2001 12,500,000
October 31, 2001 12,500,000
January 31, 2002 12,500,000
April 30, 2002 12,500,000
July 31, 2002 12,500,000
(c) In the event that the aggregate principal amount
of Borrower Notes outstanding (the "Outstanding Amount") on the
Closing Date (after giving effect to the consummation of the Debt
Tender Offer) exceeds $1,000,000, then, on the Closing Date, (i)
the required principal payments for each fiscal year set forth
above shall be reduced ratably (among each quarterly payment in
such fiscal year on the basis of the aggregate amounts thereof)
by an amount equal to the required principal payments under such
outstanding Borrower Notes during such fiscal year (other than
payments due on such outstanding Borrower Notes after July 31,
2002) and (ii) the required principal payments set forth above
(as reduced pursuant to clause (i) above) shall be reduced in the
inverse order of their scheduled maturity by the aggregate amount
of payments, if any, due on such outstanding Borrower Notes after
July 31, 2002. In such event, the aggregate Tranche A Term Loan
Commitments shall, on the Closing Date, be correspondingly
reduced by an amount equal to the Outstanding Amount.
2.9 Tranche B Term Notes. (a) The Borrower agrees that,
upon the request to the Administrative Agent by any Tranche B
Term Loan Lender made on or prior to the Closing Date or in
connection with any assignment pursuant to subsection 11.6, to
evidence such Lender's Tranche B Term Loan the Borrower will
execute and deliver to such Lender a promissory note substantial-
ly in the form of Exhibit A-3 (each, as amended, supplemented,
replaced or otherwise modified from time to time, a "Tranche B
Term Note"), with appropriate insertions therein as to payee,
date and principal amount, payable to the order of such Tranche B
Term Loan Lender and in a principal amount equal to the amount
set forth under such Tranche B Term Loan Lender's name on Sched-
ule A opposite the heading "Tranche B Term Loan Commitment." Any
Tranche B Term Note shall (i) be dated the Closing Date, (ii) be
payable as provided in subsection 2.9(b) and (iii) provide for
the payment of interest in accordance with subsection 4.1.
(b) The Tranche B Term Loans shall be payable in 26 consec-
utive quarterly installments, commencing on April 30, 1997, on
the dates and in the aggregate principal amount set forth below
(together with all accrued interest thereon) opposite the appli-
cable installment date (or, if less, the aggregate amount of the
Tranche B Term Loans then outstanding):
Installment Amount
April 30, 1997 $ 312,500
July 31, 1997 312,500
October 31, 1997 312,500
January 31, 1998 312,500
April 30, 1998 312,500
July 31, 1998 312,500
October 31, 1998 312,500
January 31, 1999 312,500
April 30, 1999 312,500
July 31, 1999 312,500
October 31, 1999 312,500
January 31, 2000 312,500
April 30, 2000 312,500
July 31, 2000 312,500
October 31, 2000 312,500
January 31, 2001 312,500
April 30, 2001 312,500
July 31, 2001 312,500
October 31, 2001 312,500
January 31, 2002 312,500
April 30, 2002 12,500,000
July 31, 2002 12,500,000
October 31, 2002 12,500,000
January 31, 2003 12,500,000
April 30, 2003 34,375,000
July 31, 2003 34,375,000
2.10 Tranche C Term Notes. (a) The Borrower agrees
that, upon the request to the Administrative Agent by any Tranche
C Term Loan Lender made on or prior to the Closing Date or in
connection with any assignment pursuant to subsection 11.6, to
evidence such Lender's Tranche C Term Loan the Borrower will
execute and deliver to such Lender a promissory note substantial-
ly in the form of Exhibit A-4 (each, as amended, supplemented,
replaced or otherwise modified from time to time, a "Tranche C
Term Note"; and together with the Tranche A Term Notes and the
Tranche B Term Notes, the "Term Notes"), with appropriate inser-
tions therein as to payee, date and principal amount, payable to
the order of such Tranche C Term Loan Lender and in a principal
amount equal to the amount set forth under such Tranche C Term
Loan Lender's name on Schedule A opposite the heading "Tranche C
Term Loan Commitment." Any Tranche C Term Note shall (i) be
dated the Closing Date, (ii) be payable as provided in subsection
2.10(b) and (iii) provide for the payment of interest in accor-
dance with subsection 4.1.
(b) The Tranche C Term Loans shall be payable in 30
consecutive quarterly installments, commencing on April 30, 1997,
on the dates and in the aggregate principal amount set forth
below (together with all accrued interest thereon) opposite the
applicable installment date (or, if less, the aggregate amount of
the Tranche C Term Loans then outstanding):
Installment Amount
April 30, 1997 $ 250,000
July 31, 1997 250,000
October 31, 1997 250,000
January 31, 1998 250,000
April 30, 1998 250,000
July 31, 1998 250,000
October 31, 1998 250,000
January 31, 1999 250,000
April 30, 1999 250,000
July 31, 1999 250,000
October 31, 1999 250,000
January 31, 2000 250,000
April 30, 2000 250,000
July 31, 2000 250,000
October 31, 2000 250,000
January 31, 2001 250,000
April 30, 2001 250,000
July 31, 2001 250,000
October 31, 2001 250,000
January 31, 2002 250,000
April 30, 2002 250,000
July 31, 2002 250,000
October 31, 2002 250,000
January 31, 2003 250,000
April 30, 2003 2,500,000
July 31, 2003 2,500,000
October 31, 2003 2,500,000
January 31, 2004 2,500,000
April 30, 2004 42,000,000
July 31, 2004 42,000,000
2.11 Procedure for Term Loan Borrowing. The Borrower
shall give the Administrative Agent irrevocable notice (which
notice must be received by the Administrative Agent prior to
10:00 A.M., New York City time, (a) three Business Days prior to
the Closing Date, if all or any part of the Term Loans are to be
initially Eurodollar Loans or (b) on the Closing Date, otherwise)
requesting that the Term Loan Lenders make the Term Loans on the
Closing Date and specifying (i) whether the Term Loans are to be
initially Eurodollar Loans, ABR Loans or a combination thereof,
and (ii) if the Term Loans are to be entirely or partly Eurodol-
lar Loans the amount of such Type of Loan and the length of the
initial Interest Periods therefor. Upon receipt of such notice
the Administrative Agent shall promptly notify each Term Loan
Lender thereof. On the Closing Date each Term Loan Lender shall
make available to the Administrative Agent at its office speci-
fied in subsection 11.2 the amount in immediately available funds
equal to the Term Loan to be made by such Term Loan Lender. The
Administrative Agent shall on such date credit the account of the
Borrower on the books of such office of the Administrative Agent
with the aggregate of the amounts made available to the Adminis-
trative Agent by the Term Loan Lenders.
2.12 Repayment of Loans. (a) The Borrower hereby
unconditionally promises to pay to the Administrative Agent for
the account of: (i) each Revolving Credit Lender, the then
unpaid principal amount of each Revolving Credit Loan of such
Lender made to the Borrower, on the Revolving Credit Commitment
Termination Date (or such earlier date on which the Revolving
Credit Loans become due and payable pursuant to Section 9); (ii)
the Swing Line Lender, the then unpaid principal amount of the
Swing Line Loans made to the Borrower, on the Revolving Credit
Commitment Termination Date (or such earlier date on which the
Swing Line Loans become due and payable pursuant to Section 9);
(iii) each Tranche A Term Loan Lender, the amounts specified in
subsection 2.8(b) on the dates specified in subsection 2.8(b) (or
such earlier date on which the Tranche A Term Loans become due
and payable pursuant to Section 9); (iv) each Tranche B Term Loan
Lender, the amounts specified in subsection 2.9(b) on the dates
specified in subsection 2.9(b) (or such earlier date on which the
Tranche B Term Loans become due and payable pursuant to Section
9); and (v) each Tranche C Term Loan Lender, the amounts speci-
fied in subsection 2.10(b) on the dates specified in subsection
2.10(b) (or such earlier date on which the Tranche C Term Loans
become due and payable pursuant to Section 9). The Borrower
hereby further agrees to pay interest on the unpaid principal
amount of the Loans from time to time outstanding from the date
of the making of the Loans until payment in full thereof at the
rates per annum, and on the dates, set forth in subsection 4.1.
(b) Each Lender (including the Swing Line Lender)
shall maintain in accordance with its usual practice an account
or accounts evidencing indebtedness of the Borrower to such
Lender resulting from each Loan of such Lender from time to time,
including, without limitation, the amounts of principal and
interest payable and paid to such Lender from time to time under
this Agreement.
(c) The Administrative Agent shall maintain the
Register pursuant to subsection 11.6(d), and a subaccount therein
for each Lender, in which shall be recorded (i) the amount of
each Loan made hereunder, the Type thereof and each Interest
Period, if any, applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and
payable from the Borrower to each Lender hereunder and (iii) both
the amount of any sum received by the Administrative Agent
hereunder from the Borrower and each Lender's share thereof.
(d) The entries made in the Register and the accounts
of each Lender maintained pursuant to subsection 2.12(c) shall,
to the extent permitted by applicable law, be prima facie evi-
dence of the existence and amounts of the obligations of the
Borrower therein recorded; provided, however, that the failure of
any Lender or the Administrative Agent to maintain the Register
or any such account, or any error therein, shall not in any
manner affect the obligation of the Borrower to repay (with
applicable interest) the Loans made to the Borrower by such
Lender in accordance with the terms of this Agreement.
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Subject to the terms and
conditions hereof, the Issuing Lender, in reliance on the agree-
ments of the other Revolving Credit Lenders set forth in subsec-
tion 3.4(a), agrees to issue letters of credit ("Letters of
Credit") for the account of the Borrower on any Business Day
during the Revolving Credit Commitment Period in such form as may
be approved from time to time by the Issuing Lender; provided
that the Issuing Lender shall have no obligation to issue any
Letter of Credit if, after giving effect to such issuance, (i)
the L/C Obligations would exceed the L/C Commitment or (ii) the
Available Revolving Credit Commitment of all Revolving Credit
Lenders would be less than zero. In the event that prior to the
Closing Date, the Issuing Lender issues a letter of credit or
letters of credit which are intended to replace any or all of the
Existing Letters of Credit, such letter of credit or letters of
credit shall, at all times on and after the Closing Date, be
deemed to be a "Letter of Credit" or "Letters of Credit" for all
purposes of this Agreement and the other Loan Documents.
(b) Each Letter of Credit shall (i) be denominated in
Dollars, (ii) be either (x) a standby letter of credit issued to
support obligations of the Borrower or any of its Subsidiaries,
contingent or otherwise, to finance the working capital and
business needs of the Borrower or any of its Subsidiaries in the
ordinary course of business (provided that, upon receipt by the
Lenders of definitive documentation with respect to the PBGC Term
Sheet which is consistent with the terms and conditions thereof,
a Letter of Credit or Letters of Credit may be issued in an
aggregate amount not to exceed $22,000,000 at any one time to
support obligations of the Borrower and Motor Wheel to the PBGC
in connection with the PBGC Term Sheet) or (y) a commercial
letter of credit issued in respect of the purchase of goods or
services by the Borrower or any of its Subsidiaries in the
ordinary course of business and (iii) expire no later than the
earlier of (x) the date that is 12 months after the date of its
issuance and (y) the fifth Business Day prior to the Revolving
Credit Commitment Termination Date.
(c) Each Letter of Credit shall be subject to the
Uniform Customs and, to the extent not inconsistent therewith,
the laws of the State of New York.
(d) The Issuing Lender shall not at any time be
obligated to issue any Letter of Credit hereunder if such issu-
ance would conflict with, or cause the Issuing Lender or any L/C
Participant to exceed any limits imposed by, any applicable
Requirement of Law.
3.2 Procedure for Issuance of Letters of Credit. The
Borrower may request that the Issuing Lender issue a Letter of
Credit at any time prior to the fifth Business Day prior to the
Revolving Credit Commitment Termination Date by delivering to the
Issuing Lender at its address for notices specified herein a
Letter of Credit Application therefor, completed to the satisfac-
tion of the Issuing Lender, and such other certificates, docu-
ments and other papers and information as the Issuing Lender may
request. Upon receipt of any Letter of Credit Application, the
Issuing Lender will process such Letter of Credit Application and
the certificates, documents and other papers and information
delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of
Credit requested thereby (but in no event shall the Issuing
Lender be required to issue any Letter of Credit earlier than
three Business Days after its receipt of the Letter of Credit
Application therefor and all such other certificates, documents
and other papers and information relating thereto) by issuing the
original of such Letter of Credit to the beneficiary thereof or
as otherwise may be agreed by the Issuing Lender and the Borrow-
er. The Issuing Lender shall furnish a copy of such Letter of
Credit to the Borrower promptly following the issuance thereof.
3.3 Fees, Commissions and Other Charges. (a) The
Borrower shall pay to the Administrative Agent, for the account
of the Issuing Lender and the L/C Participants, a letter of
credit fee with respect to each Letter of Credit, computed for
the period from and including the date of issuance of such Letter
of Credit to the expiration date of such Letter of Credit,
computed at a rate per annum equal to the Applicable Margin then
in effect for Eurodollar Loans that are Revolving Credit Loans
calculated on the basis of the actual number of days elapsed over
a 360-day year, of the aggregate face amount of Letters of Credit
outstanding, payable in arrears on each L/C Fee Payment Date and
on the Revolving Credit Commitment Termination Date. Such fee
shall be payable to the Administrative Agent to be shared ratably
among the Revolving Credit Lenders in accordance with their
respective Revolving Credit Commitment Percentages. In addition,
the Borrower shall pay to the Issuing Lender, for its own account
a fee equal to 0.25% per annum of the aggregate face amount of
outstanding Letters of Credit, payable quarterly in arrears on
each L/C Fee Payment Date and on the Revolving Credit Commitment
Termination Date and calculated on the basis of the actual number
of days elapsed over a 360-day year.
(b) In addition to the foregoing fees and commissions,
the Borrower shall pay or reimburse the Issuing Lender for such
normal and customary costs and expenses as are incurred or
charged by the Issuing Lender in issuing, effecting payment
under, amending or otherwise administering any Letter of Credit.
(c) The Administrative Agent shall, promptly following
its receipt thereof, distribute to the Issuing Lender and the L/C
Participants all fees and commissions received by the Administra-
tive Agent for their respective accounts pursuant to this subsec-
tion.
3.4 L/C Participations. (a) The Issuing Lender
irrevocably agrees to grant and hereby grants to each L/C Partic-
ipant, and, to induce the Issuing Lender to issue Letters of
Credit hereunder, each L/C Participant irrevocably agrees to
accept and purchase and hereby accepts and purchases from the
Issuing Lender, on the terms and conditions hereinafter stated,
for such L/C Participant's own account and risk an undivided
interest equal to such L/C Participant's Revolving Credit Commit-
ment Percentage from time to time in effect in the Issuing
Lender's obligations and rights under each Letter of Credit
issued hereunder and the amount of each draft paid by the Issuing
Lender thereunder. Each L/C Participant unconditionally and
irrevocably agrees with the Issuing Lender that, if a draft is
paid under any Letter of Credit for which the Issuing Lender is
not reimbursed in full by the Borrower in accordance with the
terms of this Agreement, such L/C Participant shall pay to the
Issuing Lender upon demand at the Issuing Lender's address for
notices specified herein an amount equal to such L/C
Participant's then Revolving Credit Commitment Percentage of the
amount of such draft, or any part thereof, which is not so
reimbursed; provided that, if such demand is made prior to 12:00
Noon, New York City time, on a Business Day, such L/C Participant
shall make such payment to the Issuing Lender prior to the end of
such Business Day and otherwise such L/C Participant shall make
such payment on the next succeeding Business Day.
(b) If any amount required to be paid by any L/C
Participant to the Issuing Lender pursuant to paragraph 3.4(a) in
respect of any unreimbursed portion of any payment made by the
Issuing Lender under any Letter of Credit is paid to the Issuing
Lender within three Business Days after the date such payment is
due, such L/C Participant shall pay to the Issuing Lender on
demand an amount equal to the product of (i) such amount, times
(ii) the daily average Federal funds rate, as quoted by the
Issuing Lender, during the period from and including the date
such payment is required to the date on which such payment is
immediately available to the Issuing Lender, times (iii) a
fraction the numerator of which is the number of days that elapse
during such period and the denominator of which is 360. If any
such amount required to be paid by any L/C Participant pursuant
to paragraph 3.4(a) is not in fact made available to the Issuing
Lender by such L/C Participant within three Business Days after
the date such payment is due, the Issuing Lender shall be enti-
tled to recover from such L/C Participant, on demand, such amount
with interest thereon calculated from such due date at the rate
per annum applicable to ABR Loans hereunder. A certificate of
the Issuing Lender submitted to any L/C Participant with respect
to any amounts owing under this subsection shall be conclusive in
the absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has
made payment under any Letter of Credit and has received from any
L/C Participant its pro rata share of such payment in accordance
with subsection 3.4(a), the Issuing Lender receives any payment
related to such Letter of Credit (whether directly from the
Borrower or otherwise, including proceeds of collateral applied
thereto by the Issuing Lender), or any payment of interest on
account thereof, the Issuing Lender will, if such payment is
received prior to 12:00 Noon, New York City time, on a Business
Day, distribute to such L/C Participant its pro rata share
thereof prior to the end of such Business Day and otherwise the
Issuing Lender will distribute such payment on the next succeed-
ing Business Day; provided, however, that in the event that any
such payment received by the Issuing Lender shall be required to
be returned by the Issuing Lender, such L/C Participant shall
return to the Issuing Lender the portion thereof previously
distributed by the Issuing Lender to it.
3.5 Reimbursement Obligation of the Borrower. (a)
The Borrower agrees to reimburse the Issuing Lender on the same
Business Day on which a draft is presented under any Letter of
Credit and paid by the Issuing Lender, provided that the Issuing
Lender provides notice to the Borrower prior to 12:00 Noon, New
York City time, on such Business Day and otherwise the Borrower
will reimburse the Issuing Lender on the next succeeding Business
Day; provided, further, that the failure to provide such notice
shall not affect the Borrower's absolute and unconditional
obligation to reimburse the Issuing Lender for any draft paid
under any Letter of Credit. The Issuing Lender shall provide
notice to the Borrower on such Business Day as a draft is pre-
sented and paid by the Issuing Lender indicating the amount of
(i) such draft so paid and (ii) any taxes, fees, charges or other
costs or expenses incurred by the Issuing Lender in connection
with such payment. Each such payment shall be made to the
Issuing Lender at its address for notices specified herein in
lawful money of the United States of America and in immediately
available funds.
(b) Interest shall be payable on any and all amounts
remaining unpaid by the Borrower under this subsection from the
date such amounts become payable (whether at stated maturity, by
acceleration or otherwise) until payment in full at the rate
which would be payable on any outstanding Revolving Credit Loans
that are ABR Loans which were then overdue.
(c) Each drawing under any Letter of Credit shall
constitute a request by the Borrower to the Administrative Agent
for a borrowing pursuant to subsection 2.3 of ABR Loans in the
amount of such drawing. The Borrowing Date with respect to such
borrowing shall be the date of such drawing.
3.6 Obligations Absolute. (a) The Borrower's obliga-
tions under this Section 3 shall be absolute and unconditional
under any and all circumstances and irrespective of any set-off,
counterclaim or defense to payment which the Borrower may have or
have had against the Issuing Lender, any L/C Participant or any
beneficiary of a Letter of Credit.
(b) The Borrower also agrees with the Issuing Lender
that the Issuing Lender shall not be responsible for, and the
Borrower's Reimbursement Obligations under subsection 3.5(a)
shall not be affected by, among other things, (i) the validity or
genuineness of documents or of any endorsements thereon, even
though such documents shall in fact prove to be invalid, fraudu-
lent or forged, or (ii) any dispute between or among the Borrower
and any beneficiary of any Letter of Credit or any other party to
which such Letter of Credit may be transferred or (iii) any
claims whatsoever of the Borrower against any beneficiary of such
Letter of Credit or any such transferee.
(c) Neither the Issuing Lender nor any L/C Participant
shall be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice,
however transmitted, in connection with any Letter of Credit,
except for errors or omissions caused by the Issuing Lender's
gross negligence or willful misconduct.
(d) The Borrower agrees that any action taken or
omitted by the Issuing Lender under or in connection with any
Letter of Credit or the related drafts or documents, if done in
the absence of gross negligence or willful misconduct and in
accordance with the standards of care specified in the Uniform
Commercial Code of the State of New York, shall be binding on the
Borrower and shall not result in any liability of the Issuing
Lender or any L/C Participant to the Borrower.
3.7 Letter of Credit Payments. If any draft shall be
presented for payment under any Letter of Credit, the responsi-
bility of the Issuing Lender to the Borrower in connection with
such draft shall, in addition to any payment obligation expressly
provided for in such Letter of Credit, be limited to determining
that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment are in
conformity with such Letter of Credit.
3.8 Application. To the extent that any provision of
any Letter of Credit Application related to any Letter of Credit
is inconsistent with the provisions of this Section 3, the
provisions of this Section 3 shall apply.
SECTION 4. GENERAL PROVISIONS
4.1 Interest Rates and Payment Dates. (a) Each
Eurodollar Loan shall bear interest for each day during each
Interest Period with respect thereto at a rate per annum equal to
the Eurodollar Rate determined for such day plus the Applicable
Margin.
(b) Each ABR Loan shall bear interest at a rate per
annum equal to the CIBC Alternate Base Rate plus the Applicable
Margin.
(c) If all or a portion of (i) any principal of any
Loan, (ii) any interest payable thereon, (iii) any commitment fee
or (iv) any other amount payable hereunder shall not be paid when
due (whether at the stated maturity, by acceleration or other-
wise), the principal of the Loans and any such overdue interest,
commitment fee or other amount shall bear interest at a rate per
annum which is (x) in the case of principal, the rate that would
otherwise be applicable thereto pursuant to the foregoing provi-
sions of this subsection plus 2% or (y) in the case of any such
overdue interest, commitment fee or other amount, the rate
described in paragraph (b) of this subsection plus 2%, in each
case from the date of such non-payment until such overdue princi-
pal, interest, commitment fee or other amount is paid in full (as
well after as before judgment).
(d) Interest shall be payable in arrears on each
Interest Payment Date, provided that interest accruing pursuant
to paragraph (c) of this subsection shall be payable from time to
time on demand.
4.2 Optional Prepayments. The Borrower may at any
time and from time to time prepay the Loans made to it in whole
or in part, without premium or penalty on any Business Day,
provided that (i) the Borrower shall have given (x) at least
three Business Days' irrevocable notice to the Administrative
Agent (in the case of Eurodollar Loans) or (y) same-day irrevoca-
ble notice to the Administrative Agent (in the case of ABR Loans,
including Swing Line Loans), (ii) such notice specifies, in the
case of any prepayment of Loans, the date and amount of prepay-
ment and whether the prepayment is (x) of Term Loans, Revolving
Credit Loans or Swing Line Loans, or a combination thereof, and
in each case if a combination thereof, the amount allocable to
each, (y) of Eurodollar Loans, ABR Loans or a combination there-
of, and, in each case if a combination thereof, the principal
amount allocable to each and (iii) each prepayment is in a
minimum principal amount of $1,000,000 and a multiple of $100,000
in excess thereof. Upon the receipt of any such notice the
Administrative Agent shall promptly notify each of the Lenders
thereof. If any such notice is given, the amount specified in
such notice shall be due and payable on the date specified
therein, together with any amounts payable pursuant to subsection
4.12 and, in the case of prepayments of the Term Loans only,
accrued interest to such date on the amount prepaid. Partial
prepayments of (i) the Term Loans pursuant to this subsection
shall be applied (x) pro rata (based on outstanding principal
amount) to the Tranche A Term Loans, the Tranche B Term Loans and
the Tranche C Term Loans and (y) pro rata to the respective
installments of principal thereof and (ii) the Revolving Credit
Loans and the Letters of Credit pursuant to this subsection shall
be applied, first, to payment of the Swing Line Loans then
outstanding, second, to payment of the Revolving Credit Loans
then outstanding and, last, to cash collateralize any outstanding
L/C Obligation upon terms reasonably satisfactory to the Adminis-
trative Agent.
4.3 Mandatory Prepayments and Reduction of Revolving
Credit Commitments. (a) If, in any fiscal year, commencing with
the fiscal year ending January 31, 1998, there shall be Excess
Cash Flow for such fiscal year, then on the date that is the
earlier of (i) the date on which the audited financial statements
for such fiscal year are required to be delivered pursuant to
subsection 7.1(a) and (ii) the date two Business Days after the
delivery of such financial statements, 75% of such Excess Cash
Flow shall be applied toward the prepayment of the Loans and the
permanent reduction of the Revolving Credit Commitments in
accordance with subsection 4.3(e).
(b) If, subsequent to the Closing Date, the Borrower
or any of its Subsidiaries shall issue any debt obligations
(other than in respect of Indebtedness permitted by subsection
8.2 to the extent not otherwise required by subsection 8.2 to be
applied pursuant to this subsection 4.3(b)), then 100% of the Net
Cash Proceeds thereof shall, on the first Business Day after
receipt thereof, be applied toward the prepayment of the Loans
and the permanent reduction of the Revolving Credit Commitments
in accordance with subsection 4.3(e).
(c) If, subsequent to the Closing Date, the Borrower
or any of its Subsidiaries shall receive Net Cash Proceeds from
any asset sales or other dispositions permitted by subsection
8.6(b) or (g), then 100% of the portion of such Net Cash Proceeds
required by subsection 8.6(b) or (g), as the case may be, to be
so applied shall on the first Business Day after receipt thereof,
be applied toward the prepayment of the Loans and the permanent
reduction of the Revolving Credit Commitments in accordance with
subsection 4.3(e); provided that (i) such Net Cash Proceeds from
any such asset sales or other dispositions shall not be required
to be so applied until the amount of such unapplied Net Cash
Proceeds exceeds $5,000,000 in the aggregate, at which time 100%
of such unapplied Net Cash Proceeds shall be applied immediately
toward the prepayment of the Loans and the permanent reduction of
the Revolving Credit Commitments in accordance with subsection
4.3(e) and (ii) to the extent that such Net Cash Proceeds from
any such asset sales or other dispositions may be used by the
Borrower and its Subsidiaries to acquire fixed or capital assets
or may be used by Foreign Subsidiaries to prepay, repay or
repurchase Indebtedness of Foreign Subsidiaries or acquire assets
used or useful in the businesses of Foreign Subsidiaries, in each
case, within 180 days of receipt thereof and otherwise in accor-
dance with subsection 8.6(b), but such Net Cash Proceeds are not
so used, such Net Cash Proceeds shall be applied toward the
repayment of the Loans and the permanent reduction of the Revolv-
ing Credit Commitments in accordance with subsection 4.3(e) on
the earlier of (x) the 180th day after receipt of such Net Cash
Proceeds and (y) the date on which the Borrower has reasonably
determined that such Net Cash proceeds shall not be so used.
(d) If, at any time during the Revolving Credit
Commitment Period, the Aggregate Outstanding Revolving Credit
with respect to all Revolving Credit Lenders (including the Swing
Line Lender) exceeds the aggregate Revolving Credit Commitments
then in effect, the Borrower shall, without notice or demand,
immediately repay the Revolving Credit Loans and/or the Swing
Line Loans in an aggregate principal amount equal to such excess,
together with interest accrued to the date of such payment or
prepayment and any amounts payable under subsection 4.12. To the
extent that after giving effect to any prepayment of the Loans
required by the preceding sentence, the Aggregate Outstanding
Revolving Credit with respect to all Revolving Credit Lenders
(including the Swing Line Lender) exceeds the aggregate Revolving
Credit Commitments then in effect, the Borrower shall, without
notice or demand, immediately cash collateralize the then out-
standing L/C Obligations in an amount equal to such excess upon
terms reasonably satisfactory to the Administrative Agent. On
the Business Day next succeeding the date on which a payment has
caused the Aggregate Outstanding Revolving Credit with respect to
all Revolving Credit Lenders (including the Swing Line Lender) to
be equal to or less than the Revolving Credit Commitments then in
effect, the Administrative Agent shall return to the Borrower the
cash used to cash collateralize the then outstanding L/C Obliga-
tions pursuant to the preceding sentence.
(e) Prepayments of the Loans and permanent reductions
of the Revolving Credit Commitments pursuant to subsections
4.3(a), (b), (c) and (h) shall be applied, first, to payment of
the Term Loans then outstanding and, second, (to the extent that
there are no Term Loans then outstanding) to permanent reduction
of the Revolving Credit Commitments then in effect. Prepayments
of the Term Loans pursuant to subsections 4.3(a), (b), (c) and
(h) shall be applied (x) pro rata (based on outstanding principal
amount) to the Tranche A Term Loans, the Tranche B Term Loans and
the Tranche C Term Loans and (y) pro rata to the respective
installments of principal thereof. Notwithstanding the forego-
ing, so long as any amounts remain outstanding under the Tranche
A Term Loans, any Lender having a Tranche B Term Loan or a
Tranche C Term Loan outstanding may decline receipt of its share
of any such prepayment, and, if such Lender so declines, such
share shall be applied as an additional prepayment of the Tranche
A Term Loans in accordance with clause (y) of the immediately
preceding sentence. Any such Lender that wishes to decline
receipt of its share of any such prepayment shall promptly, and
in any event no later than the date specified for such prepay-
ment, notify the Administrative Agent.
(f) Amounts prepaid on account of Term Loans pursuant
to subsection 4.3(a), (b), (c) or (h) may not be reborrowed.
(g) If, at any time during the Revolving Credit
Commitment Period, the Aggregate Outstanding Revolving Credit
(other than in respect of the undrawn portion of any Letters of
Credit) with respect to all Revolving Credit Lenders (including
the Swing Line Lender) is not less than the Clean-Down Amount for
at least a consecutive thirty day period during each fiscal year
of the Borrower, the Borrower shall, without notice or demand,
immediately repay the Revolving Credit Loans and/or the Swing
Line Loans in an aggregate principal amount equal to such excess,
together with interest accrued to the date of such payment or
prepayment and any amounts payable under subsection 4.12, and any
borrowings of Revolving Credit Loans during such thirty day
period shall be subject to clause (ii) of the proviso to subsec-
tion 2.1(a). To the extent that after giving effect to any
prepayment of the Loans required by the preceding sentence, such
Aggregate Outstanding Revolving Credit with respect to all
Revolving Credit Lenders (including the Swing Line Lender)
exceeds the Clean-Down Amount, the Borrower shall, without notice
or demand, immediately cash collateralize the then outstanding
L/C Obligations in an amount equal to such excess upon terms
reasonably satisfactory to the Administrative Agent. On the
Business Day next succeeding the date on which the thirty day
period described above has expired, the Administrative Agent
shall return to the Borrower the cash, if any, used to cash
collateralize the then outstanding L/C Obligations pursuant to
the preceding sentence.
(h) If, subsequent to the Closing Date, the Borrower
or any of its Subsidiaries shall receive any cash proceeds of any
casualty or condemnation permitted by subsection 8.6(h), then
100% of the portion of such proceeds required by subsection
8.6(h) to be so deposited shall on the first Business Day after
receipt thereof be deposited with the Administrative Agent who
shall hold such proceeds in a cash collateral account upon terms
reasonably satisfactory to it. From time to time upon the
request of the Borrower, the Administrative Agent shall release
such proceeds to the Borrower or such Subsidiary, as necessary,
to pay for replacement or rebuilding of the property lost or
condemned. If such property is not replaced or rebuilt within
one year (subject to reasonable extension for force majeure or
weather delays) following the condemnation or casualty or if the
Borrower fails to notify the Administrative Agent in writing on
or before 180 days after such casualty or condemnation that the
Borrower shall commence the replacement or rebuilding of such
property, then, in either case, the Administrative Agent shall
apply any amounts in the cash collateral account toward the
prepayment of the Loans and the permanent reduction of the
Revolving Credit Commitments in accordance with subsection
4.3(e).
4.4 Conversion and Continuation Options. (a) The
Borrower may elect from time to time to convert Eurodollar Loans
to ABR Loans by giving the Administrative Agent at least three
Business Days' prior irrevocable notice of such election, provid-
ed that any such conversion of Eurodollar Loans may only be made
on the last day of an Interest Period with respect thereto. The
Borrower may elect from time to time to convert ABR Loans to
Eurodollar Loans by giving the Administrative Agent at least
three Business Days' prior irrevocable notice of such election.
Any such notice of conversion to Eurodollar Loans shall specify
the length of the initial Interest Period or Interest Periods
therefor. Upon receipt of any such notice the Administrative
Agent shall promptly notify each Lender thereof. All or any part
of outstanding Eurodollar Loans and ABR Loans may be converted as
provided herein, provided that (i) unless the Majority Lenders
otherwise consent, no Loan may be converted into a Eurodollar
Loan when any Event of Default has occurred and is continuing and
(ii) no Loan may be converted into a Eurodollar Loan after the
date that is one month or 30 days, respectively, prior to the
Revolving Credit Commitment Termination Date (in the case of
conversions of Revolving Credit Loans) or the date of the final
installment of principal of the Term Loans.
(b) Any Eurodollar Loans may be continued as such upon
the expiration of the then current Interest Period with respect
thereto by the Borrower giving notice to the Administrative
Agent, in accordance with the applicable provisions of the term
"Interest Period" set forth in subsection 1.1, of the length of
the next Interest Period to be applicable to such Loans, provided
that no Eurodollar Loan may be continued as such (i) unless the
Majority Lenders otherwise consent, when any Event of Default has
occurred and is continuing or (ii) after the date that is one
month prior to the Revolving Credit Commitment Termination Date
(in the case of continuations of Revolving Credit Loans) or the
date of the final installment of principal of the Term Loans and
provided, further, that if the Borrower shall fail to give such
notice or if such continuation is not permitted such Loans shall
be automatically converted to ABR Loans on the last day of such
then expiring Interest Period.
4.5 Minimum Amounts and Maximum Number of Tranches.
All borrowings, conversions and continuations of Loans hereunder
and all selections of Interest Periods hereunder shall be in such
amounts and be made pursuant to such elections so that, after
giving effect thereto, the aggregate principal amount of the
Loans comprising each Tranche shall be equal to $5,000,000 or a
whole multiple of $1,000,000 in excess thereof. In no event
shall there be more than (a) 20 Tranches outstanding at any time
or (b) 10 Tranches in respect of Revolving Credit Loans, 10
Tranches in respect of Tranche A Term Loans, 10 Tranches in
respect of Tranche B Term Loans or 10 Tranches in respect of
Tranche C Term Loans outstanding at any time.
4.6 Computation of Interest and Fees. (a) Interest
(other than interest based on the CIBC Prime Rate) on all Loans
and commitment fees payable pursuant hereto shall be calculated
on the basis of a year of 360 days for the actual days elapsed;
interest based on the CIBC Prime Rate shall be calculated on the
basis of a 365-(or 366-, as the case may be) day year for the
actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrower and the Lenders of each determi-
nation of a Eurodollar Rate. Any change in the interest rate on
the Loans resulting from a change in the CIBC Alternate Base Rate
or the Eurocurrency Reserve Requirements shall become effective
as of the opening of business on the day on which such change
shall become effective, provided that such change becomes effec-
tive prior to 5:00 P.M., New York City time, on such day. The
Administrative Agent shall as soon as practicable notify the
Borrower and each Lender of the effective date and the amount of
each such change.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement
shall be conclusive and binding on the Borrower and the Lenders
in the absence of manifest error. The Administrative Agent
shall, at the request of the Borrower, deliver to the Borrower a
statement showing the quotations used by the Administrative Agent
in determining any interest rate pursuant to subsection 4.1.
4.7 Inability to Determine Interest Rate. If prior to
the first day of any Interest Period: (a) the Administrative
Agent shall have determined (which determination shall be conclu-
sive and binding upon the Borrower) that, by reason of circum-
stances affecting the relevant market, adequate and reasonable
means do not exist for ascertaining the Eurodollar Rate for such
Interest Period, or (b) the Administrative Agent shall have
received notice from the Majority Lenders that the Eurodollar
Rate determined or to be determined for such Interest Period will
not adequately and fairly reflect the cost to such Lenders (or
any affiliate of any such Lender from which such Lender custom-
arily obtains funds) (as conclusively certified by such Lenders)
of making or maintaining their affected Loans during such Inter-
est Period, then the Administrative Agent shall give telecopy or
telephonic notice thereof to the Borrower and the Lenders as soon
as practicable thereafter. If such notice is given (x) any
Eurodollar Loans requested to be made on the first day of such
Interest Period shall be made as ABR Loans, (y) any Loans that
were to have been converted on the first day of such Interest
Period to Eurodollar Loans shall be converted to or continued as
ABR Loans and (z) any outstanding Eurodollar Loans shall be
converted, on the first day of such Interest Period, to ABR
Loans. Until such notice has been withdrawn by the Administra-
tive Agent, no further Eurodollar Loans shall be made or contin-
ued as such, nor shall the Borrower have the right to convert
Loans to Eurodollar Loans.
4.8 Pro Rata Treatment and Payments. (a) Each
borrowing of Revolving Credit Loans (other than Swing Line Loans)
by the Borrower from the Revolving Credit Lenders hereunder shall
be made, each payment by the Borrower on account of any commit-
ment fee in respect of the Revolving Credit Commitments hereunder
shall be allocated by the Administrative Agent, and any reduction
of the Revolving Credit Commitments of the Revolving Credit
Lenders shall be allocated by the Administrative Agent, pro rata
according to the Revolving Credit Commitment Percentages of the
Revolving Credit Lenders. Each payment (including each prepay-
ment) by the Borrower on account of principal of and interest on
any Revolving Credit Loan shall be allocated by the Administra-
tive Agent pro rata according to the respective outstanding
principal amounts of such Revolving Credit Loans then held by the
Revolving Credit Lenders. Each payment (including each prepay-
ment) by the Borrower on account of principal of and interest on
any Tranche A Term Loans, Tranche B Term Loans or Tranche C Term
Loans shall be allocated by the Administrative Agent pro rata
according to the respective outstanding principal amounts of such
Tranche A Term Loans, Tranche B Term Loans or Tranche C Term
Loans then held by the Term Loan Lenders. All payments (includ-
ing prepayments) to be made by the Borrower hereunder and under
any Notes, whether on account of principal, interest, fees,
Reimbursement Obligations or otherwise, shall be made without
set-off or counterclaim and shall be made prior to 12:00 Noon,
New York City time, on the due date thereof to the Administrative
Agent, for the account of the Lenders holding the relevant Loans
or the L/C Participants, as the case may be, at the Administra-
tive Agent's office specified in subsection 11.2, in Dollars and
in immediately available funds. Payments received by the Admin-
istrative Agent after such time shall be deemed to have been
received on the next Business Day. If any payment hereunder
(other than payments on Eurodollar Loans) becomes due and payable
on a day other than a Business Day, the maturity of such payment
shall be extended to the next succeeding Business Day, and, with
respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension. If
any payment on a Eurodollar Loan becomes due and payable on a day
other than a Business Day, the maturity of such payment shall be
extended to the next succeeding Business Day (and, with respect
to payments of principal, interest thereon shall be payable at
the then applicable rate during such extension) unless the result
of such extension would be to extend such payment into another
calendar month, in which event such payment shall be made on the
immediately preceding Business Day.
(b) Unless the Administrative Agent shall have been
notified in writing by any Lender prior to a borrowing that such
Lender will not make the amount that would constitute its Commit-
ment Percentage of such borrowing available to the Administrative
Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the
Administrative Agent may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. If such amount
is not made available to the Administrative Agent by the required
time on the Borrowing Date therefor, such Lender shall pay to the
Administrative Agent, on demand, such amount with interest
thereon at a rate equal to the daily average Federal Funds Rate
for the period until such Lender makes such amount immediately
available to the Administrative Agent. A certificate of the
Administrative Agent submitted to any Lender with respect to any
amounts owing under this subsection shall be conclusive in the
absence of manifest error. If such Lender's Commitment Percent-
age of such borrowing is not made available to the Administrative
Agent by such Lender within three Business Days of such Borrowing
Date, the Administrative Agent shall also be entitled to recover
such amount with interest thereon at the rate per annum applica-
ble to ABR Loans hereunder, on demand, from the Borrower.
4.9 Illegality. Notwithstanding any other provision
herein, if the adoption of or any change in any Requirement of
Law or in the interpretation or application thereof shall make it
unlawful for any Lender (or any affiliate of such Lender from
which such Lender customarily obtains funds) to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the
commitment of such Lender hereunder to make Eurodollar Loans,
continue Eurodollar Loans as such and convert ABR Loans to
Eurodollar Loans shall forthwith be cancelled and (b) such
Lender's Loans then outstanding as Eurodollar Loans, if any,
shall be converted automatically to ABR Loans on the respective
last days of the then current Interest Periods with respect to
such Loans or within such earlier period as required by law. If
any such conversion of a Eurodollar Loan occurs on a day which is
not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if
any, as may be required pursuant to subsection 4.12.
4.10 Requirements of Law. (a) If the adoption of or
any change in any Requirement of Law or in the interpretation or
application thereof or compliance by any Lender with any request
or directive (whether or not having the force of law) from any
central bank or other Governmental Authority made subsequent to
the date hereof:
(i) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Note, any
Letter of Credit, any Letter of Credit Application or any
Eurodollar Loan made by it, or change the basis of taxation
of payments to such Lender in respect thereof (except for
Non-Excluded Taxes covered by subsection 4.11 and changes in
the rate of tax on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any re-
serve, special deposit, compulsory loan or similar require-
ment against assets held by, deposits or other liabilities
in or for the account of, advances, loans or other exten-
sions of credit by, or any other acquisition of funds by,
any office of such Lender (or any affiliate of such Lender
from which such Lender customarily obtains funds) which is
not otherwise included in the determination of the Eurodol-
lar Rate hereunder; or
(iii) shall impose on such Lender (or such affiliate)
any other condition;
and the result of any of the foregoing is to increase the cost to
such Lender, by an amount which such Lender deems to be material,
of making, converting into, continuing or maintaining Eurodollar
Loans or issuing or participating in Letters of Credit or to
reduce any amount receivable hereunder in respect thereof, then,
in any such case, the Borrower shall promptly pay such Lender
such additional amount or amounts as will compensate such Lender
for such increased cost or reduced amount receivable.
(b) If any Lender shall have determined that the
adoption of or any change in any Requirement of Law regarding
capital adequacy or in the interpretation or application thereof
or compliance by such Lender or any corporation controlling such
Lender with any request or directive regarding capital adequacy
(whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the
effect of reducing the rate of return on such Lender's or such
corporation's capital as a consequence of its obligations hereun-
der or under any Letter of Credit to a level below that which
such Lender or such corporation could have achieved but for such
adoption, change or compliance (taking into consideration such
Lender's or such corporation's policies with respect to capital
adequacy) by an amount deemed by such Lender to be material, then
from time to time, the Borrower shall promptly pay to such Lender
such additional amount or amounts as will compensate such Lender
or such corporation for such reduction.
(c) If any Lender becomes entitled to claim any addi-
tional amounts pursuant to this subsection, such Lender shall
promptly notify the Borrower (with a copy to the Administrative
Agent) of the event by reason of which it has become so entitled.
A certificate as to any additional amounts payable pursuant to
this subsection submitted by such Lender to the Borrower (with a
copy to the Administrative Agent) shall be conclusive in the
absence of manifest error. The agreements in this subsection
shall survive the termination of this Agreement and the payment
of the Loans and all other amounts payable hereunder.
4.11 Taxes. (a) All payments made by the Borrower
under this Agreement, any Notes, any Letters of Credit or any
Letter of Credit Applications shall be made free and clear of,
and without deduction or withholding for or on account of, any
present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereaf-
ter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes and franchise
taxes (imposed in lieu of net income taxes) imposed on the
Administrative Agent or any Lender as a result of a present or
former connection between the Administrative Agent or such Lender
and the jurisdiction of the Governmental Authority imposing such
tax or any political subdivision or taxing authority thereof or
therein (other than any such connection arising solely from the
Administrative Agent or such Lender having executed, delivered or
performed its obligations or received a payment under, or en-
forced, this Agreement or any Note). If any such non-excluded
taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld
from any amounts payable to the Administrative Agent or any
Lender hereunder or under any Note, any Letters of Credit or any
Letter of Credit Applications, the amounts so payable to the
Administrative Agent or such Lender shall be increased to the
extent necessary to yield to the Administrative Agent or such
Lender (after payment of all Non-Excluded Taxes) interest or any
such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement, provided, however, that the
Borrower shall not be required to increase any such amounts
payable to any Lender that is not organized under the laws of the
United States of America or a state thereof if such Lender fails
to comply with the requirements of paragraph (b) of this subsec-
tion. Whenever any Non-Excluded Taxes are payable by the Borrow-
er, as promptly as possible thereafter the Borrower shall send to
the Administrative Agent for its own account or for the account
of such Lender, as the case may be, a certified copy of an
original official receipt received by the Borrower showing
payment thereof. If the Borrower fails to pay any Non-Excluded
Taxes when due to the appropriate taxing authority or fails to
remit to the Administrative Agent the required receipts or other
required documentary evidence, the Borrower shall indemnify the
Administrative Agent and the Lenders for any incremental taxes,
interest or penalties that may become payable by the Administra-
tive Agent or any Lender as a result of any such failure. The
agreements in this subsection shall survive the termination of
this Agreement and the payment of the Loans and all other amounts
payable hereunder.
(b) Each Lender that is not incorporated under the
laws of the United States of America or a state thereof shall:
(X)(i) deliver to the Borrower and the Administra-
tive Agent (A) two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224, or successor
applicable form, as the case may be, and (B) an Internal
Revenue Service Form W-8 or W-9, or successor applicable
form, as the case may be;
(ii) deliver to the Borrower and the Administrative
Agent two further copies of any such form or certification
on or before the date that any such form or certification
expires or becomes obsolete and after the occurrence of any
event requiring a change in the most recent form previously
delivered by it to the Borrower; and
(iii) obtain such extensions of time for filing and
complete such forms or certifications as may reasonably be
requested by the Borrower or the Administrative Agent; or
(Y) in the case of any such Lender that is not a
"bank" within the meaning of Section 881(c)(3)(A) of the
Code, (i) represent to the Borrower (for the benefit of the
Borrower and the Administrative Agent) that it is not a bank
within the meaning of Section 881(c)(3)(A) of the Code, (ii)
agree to furnish to the Borrower on or before the date of
any payment by the Borrower, with a copy to the Administra-
tive Agent, (A) a certificate substantially in the form of
Exhibit E (any such certificate a "U.S. Tax Compliance
Certificate") and (B) two accurate and complete original
signed copies of Internal Revenue Service Form W-8, or
successor applicable form certifying to such Lender's legal
entitlement at the date of such certificate to an exemption
from U.S. withholding tax under the provisions of Section
881(c) of the Code with respect to payments to be made under
this Agreement and any Notes (and to deliver to the Borrower
and the Administrative Agent two further copies of such form
on or before the date it expires or becomes obsolete and
after the occurrence of any event requiring a change in the
most recently provided form and, if necessary, obtain any
extensions of time reasonably requested by the Borrower or
the Administrative Agent for filing and completing such
forms), and (iii) agree, to the extent legally entitled to
do so, upon reasonable request by the Borrower, to provide
to the Borrower (for the benefit of the Borrower and the
Administrative Agent) such other forms as may be reasonably
required in order to establish the legal entitlement of such
Lender to an exemption from withholding with respect to
payments under this Agreement and any Notes, provided that
in determining the reasonableness of a request under this
clause (iii) such Lender shall be entitled to consider the
cost (to the extent unreimbursed by the Borrower) which
would be imposed on such Lender of complying with such
request;
unless in any such case any change in treaty, law or regulation
has occurred after the date such Person becomes a Lender hereun-
der which renders all such forms inapplicable or which would
prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Borrower
and the Administrative Agent. Each Person that shall become a
Lender or a Participant pursuant to subsection 11.6 shall, upon
the effectiveness of the related transfer, be required to provide
all of the forms, certifications and statements required pursuant
to this subsection, provided that in the case of a Participant
the obligations of such Participant pursuant to this paragraph
(b) shall be determined as if such Participant were a Lender
except that such Participant shall furnish all such required
forms, certifications and statements to the Lender from which the
related participation shall have been purchased.
4.12 Indemnity. The Borrower agrees to indemnify each
Lender and to hold each Lender harmless from any loss or expense
which such Lender may sustain or incur as a consequence of
(a) default by the Borrower in making a borrowing of, conversion
into or continuation of Eurodollar Loans after the Borrower has
given a notice requesting the same in accordance with the provi-
sions of this Agreement, (b) default by the Borrower in making
any prepayment of Eurodollar Loans after the Borrower has given a
notice thereof in accordance with the provisions of this Agree-
ment or (c) the making of a prepayment of Eurodollar Loans on a
day which is not the last day of an Interest Period with respect
thereto. Such indemnification may include an amount equal to the
excess, if any, of (i) the amount of interest which would have
accrued on the amount so prepaid, or not so borrowed, converted
or continued, for the period from the date of such prepayment or
of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow,
convert or continue, the Interest Period that would have com-
menced on the date of such failure) in each case at the applica-
ble rate of interest for such Loans provided for herein (exclud-
ing, however, the Applicable Margin included therein, if any)
over (ii) the amount of interest (as reasonably determined by
such Lender) which would have accrued to such Lender on such
amount by placing such amount on deposit for a comparable period
with leading banks in the interbank eurodollar market. This
covenant shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.
4.13 Change of Lending Office; Replacement of Lenders.
(a) Each Lender agrees that if it makes any demand for payment
under subsection 4.10 or 4.11(a), or if any adoption or change of
the type described in subsection 4.9 shall occur with respect to
it, it shall use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions and so long as such
efforts would not be disadvantageous to it, as determined in its
sole discretion) to designate a different lending office if the
making of such a designation would reduce or obviate the need for
the Borrower to make payments under subsection 4.10 or 4.11(a),
or would eliminate or reduce the effect of any adoption or change
described in subsection 4.9.
(b) If at any time any Lender makes any demand for
payment under subsection 4.10 or 4.11(a) as a result of any
condition described in any such subsection, then the Borrower
may, if such condition continues to exist after such Lender shall
have used reasonable efforts pursuant to paragraph (a) of this
subsection 4.13 and on ten Business Days' prior written notice to
the Administrative Agent and such Lender, replace such Lender by
causing such Lender to (and such Lender shall) assign pursuant to
subsection 11.6 (c) all of its rights and obligations under this
Agreement to another Lender or other bank or financial institu-
tion selected by the Borrower and acceptable to the Administra-
tive Agent for a purchase price equal to the outstanding princi-
pal amount of all Loans and all Reimbursement Obligations,
accrued interest, fees and other amounts owing to such Lender;
provided that (i) the Borrower shall have no right to replace the
Administrative Agent, (ii) neither the Administrative Agent nor
any Lender shall have any obligation to the Borrower to find a
replacement Lender or other bank or financial institution, (iii)
such replacement must take place no later than 180 days after
such Lender shall have made any such demand for payment, (iv) in
no event shall any Lender hereby replaced be required to pay or
surrender to such replacement Lender or other bank or financial
institution any of the fees received by such Lender pursuant to
this Agreement, (v) the Borrower shall pay such amounts demanded
under subsection 4.10 or 4.11(a) to such Lender, together with
any amounts as may be required pursuant to subsection 4.12, prior
to such Lender being replaced and the payment of such amounts
shall be a condition to the replacement of such Lender and (vi)
such Lender shall not be required to pay any fees required by
subsection 11.6(e) in connection with such replacement, which
fees shall be paid by the Borrower.
SECTION 5. REPRESENTATIONS AND WARRANTIES
To induce the Managing Agents and the Lenders to enter
into this Agreement and to make the Loans and issue or partici-
pate in the Letters of Credit, the Borrower hereby represents and
warrants, on the Closing Date (after giving effect to the consum-
mation of the Transactions) and on any date thereafter on which
any Loan or any other extension of credit is requested to be made
by any Lender or on which any Letter of Credit is requested to be
issued by the Issuing Lender to the Managing Agents and each
Lender that:
5.1 Financial Condition. (a) The consolidated
balance sheets of the Borrower and its consolidated Subsidiaries
as of January 31, 1994, January 31, 1995 and January 31, 1996 and
the related consolidated statements of income and of cash flows
for the fiscal years ended on such dates, reported on by KPMG
Peat Marwick, copies of which have heretofore been furnished to
each Lender, are complete and correct and present fairly the
consolidated financial condition of the Borrower and its consoli-
dated Subsidiaries as at such dates, and the consolidated results
of their operations and their consolidated cash flows for the
fiscal years then ended. The unaudited consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at
April 30, 1996 and the related unaudited consolidated statements
of income and of cash flows for the three-month period ended on
such date, certified by a Responsible Officer, copies of which
have heretofore been furnished to each Lender, are complete and
correct and present fairly the consolidated financial condition
of the Borrower and its consolidated Subsidiaries as at such
date, and the consolidated results of their operations and their
consolidated cash flows for the three-month period then ended
(subject to normal year-end audit adjustments). All such finan-
cial statements, including the related schedules and notes
thereto, have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as approved
by such accountants or Responsible Officer, as the case may be,
and as disclosed therein). Neither the Borrower nor any of its
consolidated Subsidiaries had, at the date of the most recent
balance sheet referred to above, any material Guarantee Obliga-
tion, contingent liability or liability for taxes, or any
long-term lease or other material agreement or unusual forward or
long-term commitment, including, without limitation, any interest
rate or foreign currency swap or exchange transaction, which is
not reflected in the foregoing statements or in the notes there-
to. During the period from January 31, 1996 to and including the
Closing Date there has been no sale, transfer or other disposi-
tion by the Borrower or any of its consolidated Subsidiaries of
any material part of its business or property and, except as
contemplated by the Transactions, no purchase or other acquisi-
tion of any business or property (including any capital stock of
any other Person) material in relation to the consolidated
financial condition of the Borrower and its consolidated Subsid-
iaries at January 31, 1996.
(b) The consolidated balance sheets of Holdings and its
Subsidiaries as of December 31, 1993, December 31, 1994 and
December 31, 1995 and the related consolidated statements of
income and of cash flows for the fiscal years ended on such
dates, reported on by Ernst & Young, copies of which have hereto-
fore been furnished to each Lender, are complete and correct and
present fairly the consolidated financial condition of Holdings
and its consolidated Subsidiaries as at such date, and the
consolidated results of their operations and their consolidated
cash flows for the fiscal years then ended. The unaudited
consolidated balance sheet of Holdings and its consolidated
Subsidiaries as at March 31, 1996 and the related unaudited
consolidated statements of income and of cash flows for the
three-month period ended on such date, certified by a responsible
officer of Holdings, copies of which have heretofore been fur-
nished to each Lender, are complete and correct and present
fairly the consolidated financial condition of Holdings and its
consolidated Subsidiaries as at such date, and the consolidated
results of their operations and their consolidated cash flows for
the three-month period then ended (subject to normal year-end
audit adjustments). All such financial statements, including the
related schedules and notes thereto, have been prepared in
accordance with GAAP applied consistently throughout the periods
involved (except as approved by such accountants or responsible
officer, as the case may be, and as disclosed therein). Neither
Holdings nor any of its consolidated Subsidiaries had, at the
date of the most recent balance sheet referred to above, any
material Guarantee Obligation, contingent liability or liability
for taxes, or any long-term lease or other material agreement or
unusual forward or long-term commitment, including, without
limitation, any interest rate or foreign currency swap or ex-
change transaction, which is not reflected in the foregoing
statements or in the notes thereto. During the period from
December 31, 1995 to and including the Closing Date, except as
contemplated by the Transactions, there has been no sale, trans-
fer or other disposition by Holdings or any of its consolidated
Subsidiaries of any material part of its business or property and
no purchase or other acquisition of any business or property
(including any capital stock of any other Person) material in
relation to the consolidated financial condition of Holdings and
its consolidated Subsidiaries at December 31, 1995.
(c) The pro forma balance sheet of the Borrower and
its consolidated Subsidiaries (the "Pro Forma Balance Sheet"),
copies of which have heretofore been furnished to each Lender, is
the balance sheet of the Borrower and its consolidated Subsidiar-
ies as of January 31, 1996 (the "Pro Forma Date"), adjusted to
give effect (as if such events had occurred on such date) to (i)
the consummation of the Transactions, (ii) the repayment in full
of all loans under, and all other amounts due in respect of, the
Existing Credit Agreements, (iii) the making of the Loans and
other extensions of credit hereunder to be made on the Closing
Date and the application of the proceeds thereof as contemplated
hereby and (iv) the payment of the fees and expenses paid in
connection with the consummation of the Transactions and the
other transactions contemplated by the Loan Documents and the
Transaction Documents (which fees and expenses shall not exceed
$45,000,000).
5.2 No Change; Solvency. Since January 31, 1996,
there has been no development or event which has had or could
reasonably be expected to have a Material Adverse Effect. As of
the Closing Date, after giving effect to the transactions contem-
plated by the Loan Documents and the Transactions, the Borrower
and its Subsidiaries are solvent, on a consolidated basis and on
an individual basis.
5.3 Corporate Existence; Compliance with Law. Each of
the Borrower and the other Loan Parties (a) is duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the corporate power and
authority, and the legal right, to own and operate its property,
to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified
as a foreign corporation and in good standing under the laws of
each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such qualifica-
tion, except for jurisdictions in which the failure to so quali-
fy, in the aggregate, could not reasonably be expected to have a
Material Adverse Effect, and (d) is in compliance with all
Requirements of Law except to the extent that the failure to
comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
5.4 Corporate Power; Authorization; Enforceable
Obligations. Each of the Borrower and the other Loan Parties has
the corporate power and authority, and the legal right, to
execute, deliver and perform the Loan Documents to which it is a
party and the Transaction Documents to which it is a party and,
in the case of the Borrower, to borrow hereunder and each of the
Borrower and the other Loan Parties has taken all necessary
corporate action to authorize the borrowings on the terms and
conditions of this Agreement and any Notes and to authorize the
execution, delivery and performance of the Loan Documents to
which it is a party and the Transaction Documents to which it is
a party. No consent or authorization of, filing with, notice to
or other act by or in respect of, any Governmental Authority or
any other Person is required to be received, made, given or
completed by any of the Loan Parties in connection with the
borrowings hereunder or with the execution, delivery, perfor-
mance, validity or enforceability of the Loan Documents to which
the Borrower or any of the other Loan Parties is a party or the
Transaction Documents to which the Borrower or any of the other
Loan Parties is a party other than filings and recordings to
perfect the first priority security interest of the Lenders
created by the Security Documents and other than those set forth
on Schedule 5.4 (which consents, authorizations, filings, notices
and other acts have been heretofore received, made, given or
completed). This Agreement has been duly executed and delivered
by the Borrower, and each of the other Loan Documents to which
the Borrower or any of the other Loan Parties is a party and each
of the Transaction Documents to which the Borrower or any of the
other Loan Parties is a party will be duly executed and delivered
by the Borrower or such other Loan Party. This Agreement consti-
tutes a legal, valid and binding obligation of the Borrower, and
each other Loan Document to which the Borrower or any of the
other Loan Parties is a party and each of the Transaction Docu-
ments to which the Borrower or any of the other Loan Parties is a
party when executed and delivered by the Borrower or such other
Loan Party will constitute a legal, valid and binding obligation
of the Borrower or such other Loan Party, enforceable against the
Borrower or such other Loan Party in accordance with its terms,
subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair
dealing.
5.5 No Legal Bar. The execution, delivery and perfor-
mance of the Loan Documents to which the Borrower or any of the
other Loan Parties is a party or the Transaction Documents to
which the Borrower or any of the other Loan Parties is a party,
the borrowings hereunder and the use of the proceeds thereof will
not violate any Requirement of Law or Contractual Obligation of
the Borrower or of any of the other Loan Parties and will not
result in, or require, the creation or imposition of any Lien on
any of its or their respective properties or revenues pursuant to
any such Requirement of Law or Contractual Obligation (other than
the Loan Documents).
5.6 No Material Litigation. No litigation, investiga-
tion or proceeding of or before any arbitrator or Governmental
Authority is pending or, to the knowledge of the Borrower,
threatened by or against the Borrower or any of the other Loan
Parties or against any of its or their respective properties or
revenues (a) with respect to any of the Loan Documents or any of
the transactions contemplated hereby or thereby, (b) on the
Closing Date, with respect to any of the Transaction Documents or
(c) which could reasonably be expected to have a Material Adverse
Effect.
5.7 No Default. Neither the Borrower nor any of the
other Loan Parties is in default under or with respect to any of
its Contractual Obligations in any respect which could reasonably
be expected to have a Material Adverse Effect. No Default or
Event of Default has occurred and is continuing.
5.8 Ownership of Property; Liens. Each of the Borrow-
er and the other Loan Parties has good record and marketable
title in fee simple to, or a valid leasehold interest in, all its
material real property, and good title to, or a valid leasehold
interest in, all its other material property, and none of such
property is subject to any Lien except as permitted by subsection
8.3. The properties encumbered by the Fee Mortgages constitute
all of the material real properties owned in fee by the Borrower
and the other Loan Parties.
5.9 Intellectual Property. The Borrower and each of
the other Loan Parties owns, or is licensed to use, all trade-
marks, tradenames, copyrights, technology, know-how and processes
necessary for the conduct of its business as currently conducted
except for those the failure to own or license which could not
reasonably be expected to have a Material Adverse Effect (the
"Intellectual Property"). No claim has been asserted and is
pending by any Person challenging or questioning the use of any
such Intellectual Property or the validity or effectiveness of
any such Intellectual Property, except for such claims which, in
the aggregate, could not reasonably be expected to have a Materi-
al Adverse Effect, nor does the Borrower know of any valid basis
for any such claim. The use of such Intellectual Property by the
Borrower and the other Loan Parties does not infringe on the
rights of any Person, except for such infringements that, in the
aggregate, could not reasonably be expected to have a Material
Adverse Effect.
5.10 No Burdensome Restrictions. No Requirement of
Law or Contractual Obligation of the Borrower or any of the other
Loan Parties could reasonably be expected to have a Material
Adverse Effect.
5.11 Taxes. Each of the Borrower and the other Loan
Parties has filed or caused to be filed all United States federal
income tax returns and all other material tax returns which, to
the knowledge of the Borrower, are required to be filed and has
paid all taxes shown to be due and payable on said returns or on
any assessments made against it or any of its property and all
other taxes, fees or other charges imposed on it or any of its
property by any Governmental Authority (other than any taxes,
fees or other charges (i) with respect to which the failure to
pay, in the aggregate, could not reasonably be expected to have a
Material Adverse Effect or (ii) the amount or validity of which
are currently being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of the Borrower or any of
the other Loan Parties, as the case may be); no tax Lien has been
filed, and, to the knowledge of the Borrower, no claim is being
asserted, with respect to any such tax, fee or other charge.
5.12 Federal Regulations. No part of the proceeds of
any Loans or other extensions of credit hereunder have been or
will be used for any purpose which violates the provisions of the
Regulations of the Board of Governors of the Federal Reserve
System, including, without limitation, Regulation G or Regulation
U thereunder. If requested by any Lender or the Administrative
Agent, the Borrower will furnish to the Administrative Agent and
each Lender a statement to the foregoing effect in conformity
with the requirements of FR Form G-1 or FR Form U-1 referred to
in said Regulation G or Regulation U, as the case may be.
5.13 ERISA. Neither a Reportable Event nor an "accu-
mulated funding deficiency" (within the meaning of Section 412 of
the Code or Section 302 of ERISA) has occurred during the
five-year period prior to the date on which this representation
is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provi-
sions of ERISA and the Code. No termination of a Single Employer
Plan has occurred, and no Lien in favor of the PBGC or a Plan has
arisen, during such five year period. The present value of all
accrued benefits under all Single Employer Plans taken as a whole
does not exceed the value of the assets of such Single Employer
Plans by more than $75,000,000. Neither the Borrower nor any
Commonly Controlled Entity has had a complete or partial with-
drawal from any Multiemployer Plan, and neither the Borrower nor
any Commonly Controlled Entity would become subject to any
material liability under ERISA if the Borrower or any such
Commonly Controlled Entity were to withdraw completely from all
Multiemployer Plans as of the valuation date most closely preced-
ing the date on which this representation is made or deemed made.
As of the Closing Date, and to the knowledge of the Borrower on
any Borrowing Date thereafter, no such Multiemployer Plan is in
Reorganization or Insolvent.
5.14 Collateral. The provisions of each of the
Security Documents, when executed and delivered, will constitute
in favor of the Administrative Agent for the ratable benefit of
the Lenders, a legal, valid and enforceable security interest in
all right, title, and interest of the Borrower or any of the
other Loan Parties which is a party to such Security Document, as
the case may be, in the Collateral described in such Security
Document. As of the Closing Date, all Equipment and Inventory
(as each of such terms is defined in the Guarantee and Collateral
Agreement) of the Borrower and each of its Subsidiaries will be
kept at, or will be in transit to, the locations listed on
Schedule 5.14, and when financing statements have been filed in
the offices in the jurisdictions listed in Schedule 3 to the
Guarantee and Collateral Agreement, when appropriate filings have
been made in the U.S. Patent and Trademark Office and the U.S.
Copyright Office, and when such other actions as are described in
each of the Security Documents have been taken in accordance with
the Security Documents, each of the Security Documents shall
constitute a perfected security interest in all right, title and
interest of the Borrower or such other Loan Parties, as the case
may be, in the Collateral described therein, and except for Liens
existing on the Closing Date which are permitted by subsection
8.3 and whose priority cannot be superseded by the provisions
hereof or of any Security Document and the filings hereunder or
thereunder, a perfected first lien on, and security interest in,
all right, title and interest of the Borrower or such other Loan
Parties, as the case may be, in the Collateral described in each
Security Document.
5.15 Investment Company Act; Other Regulations. The
Borrower is not an "investment company", or a company "con-
trolled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended. The Borrower is not
subject to regulation under any Federal or State statute or
regulation (other than Regulation X of the Board of Governors of
the Federal Reserve System) which limits its ability to incur
Indebtedness.
5.16 Subsidiaries and Joint Ventures. Schedule 5.16
hereto sets forth all of the Subsidiaries of the Borrower, and
all of the joint ventures in which the Borrower or any of its
Subsidiaries has an interest, at the Closing Date, after giving
effect to the Merger, the jurisdiction of their incorporation and
the direct or indirect ownership interest of the Borrower there-
in.
5.17 Purpose of Loans. The proceeds of the Loans
shall be used by the Borrower (i) to finance a portion of the
Cash Consideration in connection with the Merger, (ii) to refi-
nance certain existing Indebtedness of the Borrower and Motor
Wheel in connection with the Merger, (iii) to pay for the cancel-
lation of management options in connection with the Merger, (iv)
to pay related fees and expenses and (v) in the case of the
Revolving Credit Loans, for the general corporate purposes of the
Borrower and its Subsidiaries after the Merger.
5.18 Environmental Matters. Other than exceptions to
any of the following that would not, individually or in the
aggregate, reasonably be expected to give rise to a Material
Adverse Effect:
(i) The Borrower and the other Loan Parties: (A) are,
and within the period of all applicable statutes of limitation
have been, in compliance with all applicable Environmental Laws;
(B) hold all Environmental Permits (each of which is in full
force and effect) required for any of their current operations or
for any property owned, leased, or otherwise operated by any of
them and have no reason to believe that they will not be able to
timely obtain without material expense all such Environmental
Permits required for planned operations; (C) are, and within the
period of all applicable statutes of limitation have been, in
compliance with all of their Environmental Permits; and (D) have
no reason to believe that: any of their Environmental Permits
will not be, or will entail material expense to be, timely
renewed or complied with; any additional Environmental Permits
that may be required of any of them will not be, or will entail
material expense to be, timely granted or complied with; or that
compliance with any Environmental Law that is applicable to any
of them will not be, or will entail material expense to be,
timely attained and maintained.
(ii) Materials of Environmental Concern have not been
generated, transported, disposed of, emitted, discharged, or
otherwise released or threatened to be released, to or at any
real property presently or formerly owned, leased or operated by
the Borrower or any of the other Loan Parties or, to the best
knowledge of the Borrower, at any other location, which could
reasonably be expected to (A) give rise to liability of the
Borrower or any of the other Loan Parties under any applicable
Environmental Law, or (B) interfere with the Borrower's or any
other Loan Party's planned or continued operations, or (C) impair
the fair saleable value of any real property owned or leased by
the Borrower or any other Loan Parties.
(iii) There is no judicial, administrative, or arbi-
tral proceeding (including any notice of violation or alleged
violation) under any Environmental Law to which the Borrower or
any of the other Loan Parties is named as a party that is pending
or, to the knowledge of the Borrower, threatened.
(iv) Neither the Borrower nor any of the other Loan
Parties has received any written request for information, or been
notified that it is a potentially responsible party, under the
federal Comprehensive Environmental Response, Compensation, and
Liability Act or any similar Environmental Law, or received any
other written request for information with respect to any Materi-
als of Environmental Concern.
(v) Neither the Borrower nor any of the other Loan
Parties has entered into or agreed to any consent decree, order,
or settlement or other agreement, nor is subject to any judgment,
decree, or order or other agreement, in any judicial, administra-
tive, arbitral, or other forum, relating to compliance with or
liability under any Environmental Law, as to which any obligation
has not been fully and finally resolved.
(vi) Neither the Borrower nor any of its Subsidiaries
has assumed or retained, by contract or, to the best knowledge of
the Borrower, by operation of law, any liabilities of any kind,
fixed or contingent, known or unknown, under any Environmental
Law or with respect to any Material of Environmental Concern.
5.19 Regulation H. Except as otherwise disclosed in
writing to the Administrative Agent, no Fee Mortgage or Leasehold
Mortgage encumbers improved real property which is located in an
area that has been identified by the Secretary of Housing and
Urban Development as an area having special flood hazards and in
which flood insurance has been made available under the National
Flood Insurance Act of 1968.
5.20 No Material Misstatements. The written informa-
tion (including, without limitation, the Confidential Information
Memorandum dated May 1996 relating to the Facilities), reports,
financial statements, exhibits and schedules furnished by or on
behalf of the Borrower and each other Loan Party to the Adminis-
trative Agent, the Documentation Agent and the Lenders in connec-
tion with the negotiation of any Loan Document or any Transaction
Document or included therein or delivered pursuant thereto do not
contain, and will not contain as of the Closing Date, any materi-
al misstatement of fact and do not, taken as a whole, omit, and
will not, taken as a whole, omit as of the Closing Date, to state
any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
materially misleading. It is understood that no representation
or warranty is made concerning the forecasts, estimates, pro
forma information, projections and statements as to anticipated
future performance or conditions, and the assumptions on which
they were based, contained in any such information, reports,
financial statements, exhibits or schedules, except that as of
the date such forecasts, estimates, pro forma information,
projections and statements were generated, (a) such forecasts,
estimates, pro forma information, projections and statements were
based on the good faith assumptions of the management of the
Borrower or Holdings, as the case may be, and (b) such assump-
tions were believed by such management to be reasonable.
5.21 Delivery of the Transaction Documents. The
Administrative Agent shall have received on the Closing Date for
itself and for each Lender a complete copy of each of the Trans-
action Documents (including all exhibits, schedules and disclo-
sure letters referred to therein or delivered pursuant thereto,
if any) delivered on or prior to the Closing Date in connection
with the Transactions and all amendments thereto, waivers relat-
ing thereto and other side letters or agreements affecting the
terms thereof in any material respect on or prior to the Closing
Date.
5.22 Representations and Warranties Contained in the
Transaction Documents. Each of the Transaction Documents shall
have been duly executed and delivered by each of the parties
thereto on or prior to the Closing Date. As of the Closing Date,
the representations and warranties of (a) each of the parties
thereto contained in the Merger Agreement (after giving effect to
any amendments, supplements, waivers or other modifications of
the Merger Agreement prior to the Closing Date in accordance with
this Agreement) and (b) each of the Loan Parties contained in any
of the other Transaction Documents (after giving effect to any
amendments, supplements, waivers or other modifications of any of
such Transaction Documents prior to the Closing Date in accor-
dance with this Agreement), in each case, will be true and
correct in all material respects except as otherwise disclosed to
the Lenders in writing prior to the Closing Date.
5.23 Labor Matters. There are no strikes pending or,
to the knowledge of the Borrower, threatened against the Borrower
or any other Loan Party which, individually or in the aggregate,
would reasonably be expected to have a Material Adverse Effect.
The hours worked and payments made to employees of the Borrower
and each other Loan Party have not been in violation of any
applicable laws, rules or regulations, except where such viola-
tions would not reasonably be expected to have a Material Adverse
Effect. The consummation of the Merger will not give rise to a
right of termination or right of renegotiation on the part of any
union under any collective bargaining agreement to which the
Borrower or any other Loan Party (or any predecessor) is a party
or by which the Borrower or any other Loan Party (or any prede-
cessor) is bound.
SECTION 6. CONDITIONS PRECEDENT
6.1 Conditions to Initial Extension of Credit. The
agreement of each Lender to make the initial Loans or other
extensions of credit requested to be made by it hereunder is
subject to the satisfaction, immediately prior to or concurrently
with the making of such Loans or other extensions of credit on
the Closing Date, of the following conditions precedent:
(a) Loan Documents. The Administrative Agent shall
have received (i) this Agreement, executed and delivered by
a duly authorized officer of the Borrower, with a counter-
part for each Lender, (ii) for the account of each of the
Lenders which has requested a Note pursuant to any of sub-
sections 2.2, 2.6, 2.8, 2.9 and 2.10, a Revolving Credit
Note, a Swing Line Note, a Tranche A Term Note, a Tranche B
Term Note or a Tranche C Term Note, as the case may be, each
conforming to the requirements hereof and executed and
delivered by a duly authorized officer of the Borrower,
(iii) the Guarantee and Collateral Agreement, executed and
delivered by a duly authorized officer of each party there-
to, with a counterpart or a conformed copy for each Lender,
(iv) each of the Fee Mortgages, each executed and delivered
by a duly authorized officer of the party thereto, with a
counterpart or a conformed copy for each Lender, (v) subject
to subsection 7.12, each of the Leasehold Mortgages, each
executed and delivered by a duly authorized officer of the
party thereto, with a counterpart or a conformed copy for
each Lender and (vi) the Copyright, Patent and Trademark
Security Agreement, executed and delivered by a duly autho-
rized officer of the Borrower, Motor Wheel and the other
signatories thereto, with a counterpart or a conformed copy
for each Lender.
(b) Consummation of the Transactions. On or prior to
the Closing Date, (i) Holdings shall have merged with and
into the Borrower and in connection therewith: (w) each
outstanding share of common stock of Holdings shall have
been converted into approximately 8,232 shares of New Common
Stock and approximately 3,030 Borrower Warrants, (x) the New
Borrower Investors shall have purchased an aggregate of not
less than 200,000 shares of Borrower Preferred Stock and
Borrower Warrants to purchase 150,000 shares of New Common
Stock at a price of not less than $48.00 per share (of which
not less than 80,000 shares of Borrower Preferred Stock and
Borrower Warrants to purchase 60,000 shares of New Common
Stock shall have been purchased by JLL), for net cash pro-
ceeds to the Company of not less than $200,000,000, (y) the
holders of outstanding shares of common stock of the Borrow-
er shall have received not more than $510,000,000 in connec-
tion with the conversion of each outstanding share of common
stock of the Borrower into $28.80 in cash and one-tenth of
one share of New Common Stock and (z) each outstanding share
of Borrower Preferred Stock shall have been converted into
31.25 shares of New Common Stock and (ii) the aggregate
amount of fees and expenses paid in connection with the
Transactions including the financing therefor and the other
transactions contemplated thereby and by the Loan Documents
shall not have been more than $45,000,000; provided that the
Lenders shall be reasonably satisfied (i) with the terms and
conditions of the Transaction Documents, including, without
limitation, any amendment or modification thereto (or any
other change to the structure of the Transactions from that
set forth in the Commitment Letter), (ii) that such terms
and conditions shall have been complied with and satisfied
in all material respects and that the Transactions shall
have been consummated in accordance with such terms and
conditions in all material respects and (iii) that the terms
and conditions of the other agreements to be entered into in
connection with the Transactions shall be reasonably satis-
factory to the Lenders in all material respects. On the
Closing Date, JLL shall own not less than 40%, and the New
Borrower Investors shall own not less than 70%, of the
outstanding New Common Stock, on a fully diluted basis.
(c) Proceeds of Issuance of Senior Subordinated Notes.
The Borrower shall have received not less than $250,000,000
in gross cash proceeds from the issuance of the Senior
Subordinated Notes and the terms and conditions (including,
without limitation, terms and conditions relating to the
interest rate, fees, amortization, maturity, subordination,
covenants, events of default and remedies) of the Senior
Subordinated Notes and the Senior Subordinated Notes Inden-
ture shall be reasonably satisfactory in all material re-
spects to the Lenders.
(d) Purchase of Borrower Notes; Redemption of Motor
Wheel Notes. The Borrower shall have (a) purchased not less
than $51,000,000 in aggregate principal amount of the Bor-
rower Notes pursuant to the Debt Tender Offer at prices
reasonably satisfactory to the Lenders (and, if fewer than
100% of all outstanding Borrower Notes shall have been so
purchased, the indenture governing the Borrower Notes shall
have been amended in a manner reasonably satisfactory to the
Lenders in all material respects, which amendment shall,
among other things, eliminate substantially all of the
restrictive covenants contained therein and shall make such
other changes as shall be necessary so that after giving
effect thereto and to the consummation of the Transactions,
the financing therefor and the other transactions contem-
plated thereby, no default or event of default would exist
thereunder) and (b) defeased in full, and shall have deliv-
ered a notice of redemption with respect to, all of the
Motor Wheel Notes, in each case, in accordance with the
terms and conditions of the indenture governing the Motor
Wheel Notes, in accordance with applicable law and on terms
reasonably satisfactory to the Lenders in all material
respects.
(e) Termination of the Existing Credit Agreements.
(i) All loans and other amounts outstanding under, and in
respect of, the Existing Credit Agreements shall have been
repaid in full, (ii) the commitments under the Existing
Credit Agreements shall have been permanently terminated and
all obligations under the Existing Credit Agreements and
(subject to subsection 8.3(o)) the security interests relat-
ing thereto shall have been discharged and (iii) the Admin-
istrative Agent shall have received satisfactory evidence of
such repayment, termination and discharge.
(f) Existing Indebtedness. The Borrower and its
Subsidiaries shall have no Indebtedness or preferred stock
outstanding on the Closing Date except for (i) the Loans to
be made on the Closing Date, (ii) the Senior Subordinated
Notes, (iii) any Borrower Notes not purchased in the Debt
Tender Offer, (iv) other Indebtedness permitted by subsec-
tion 8.2 and (v) the Borrower Preferred Stock.
(g) Financial Information. The Lenders shall have
received copies of and shall be reasonably satisfied, in
form and substance, with the financial statements referred
to in subsection 5.1, including, without limitation, the Pro
Forma Balance Sheet. The Pro Forma Balance Sheet shall not
be materially inconsistent with the forecasts previously
provided to the Lenders.
(h) Solvency Letter. The Lenders shall have received
a solvency letter, in form and substance and from Houlihan
Lokey or another independent evaluation firm satisfactory to
the Lenders, together with such other evidence reasonably
requested by the Lenders of the solvency of the Borrower and
its Subsidiaries on a consolidated basis after giving effect
to the Transactions, the financing therefor and the consum-
mation of the other transactions contemplated thereby and by
the Loan Documents.
(i) Government and Third Party Consents. (i) All
requisite Governmental Authorities and third parties shall
have approved or consented to the Transactions, the financ-
ing therefor and the other transactions contemplated by the
Loan Documents and the Transaction Documents to the extent
required and (ii) all applicable waiting periods shall have
expired and there shall be no governmental or judicial
action, actual or threatened, that has or could have a
reasonable likelihood of restraining, preventing or imposing
burdensome conditions on the Transactions or the other
transactions contemplated by the Transaction Documents and
the Loan Documents.
(j) Borrowing Certificate. The Administrative Agent
shall have received, with a counterpart for each Lender, a
certificate of the Borrower, dated the Closing Date, sub-
stantially in the form of Exhibit C, with appropriate inser-
tions and attachments, satisfactory in form and substance to
the Administrative Agent, executed by the President or any
Vice President and the Secretary or any Assistant Secretary
of the Borrower.
(k) Corporate Proceedings of the Loan Parties. The
Administrative Agent shall have received, with a counterpart
for each Lender, a copy of the resolutions, in form and
substance satisfactory to the Administrative Agent, of the
Board of Directors of each of the Loan Parties authorizing
(i) the execution, delivery and performance of this Agree-
ment and the other Loan Documents to which it is a party,
(ii) in the case of the Borrower, the borrowings contemplat-
ed hereunder and (iii) the granting by it of the Liens
created pursuant to the Security Documents, certified by the
Secretary or an Assistant Secretary of such Loan Party as of
the Closing Date, which certificate shall be in form and
substance satisfactory to the Administrative Agent and shall
state that the resolutions thereby certified have not been
amended, modified, revoked or rescinded.
(l) Incumbency Certificate of the Loan Parties. The
Administrative Agent shall have received, with a counterpart
for each Lender, a certificate of each of the Loan Parties,
dated the Closing Date, as to the incumbency and signature
of the officers of such Loan Party executing any Loan Docu-
ment satisfactory in form and substance to the Administra-
tive Agent, executed by the President or any Vice President
and the Secretary or any Assistant Secretary of such Loan
Party.
(m) Corporate Documents. The Administrative Agent
shall have received, with a counterpart for each Lender,
true and complete copies of the certificate of incorporation
and by-laws of each of the Loan Parties, certified as of the
Closing Date as complete and correct copies thereof by the
Secretary or an Assistant Secretary of such Loan Party.
(n) Consents, Licenses and Approvals. The Administra-
tive Agent shall have received, with a counterpart for each
Lender, a certificate of a Responsible Officer of the Bor-
rower (i) attaching copies of all consents, authorizations
and filings referred to in subsection 5.4, and (ii) stating
that such consents, licenses and filings are in full force
and effect, and each such consent, authorization and filing
shall be in form and substance satisfactory to the Adminis-
trative Agent.
(o) Fees. The Administrative Agent and the Lenders
shall have received the fees to be received on the Closing
Date referred to in subsection 2.4.
(p) Legal Opinions. The Administrative Agent shall
have received, with a counterpart for each Lender, the
following executed legal opinions:
(i) the executed legal opinion of Skadden, Arps,
Slate, Meagher & Flom, counsel to the Borrower and the
other Loan Parties, substantially in the form of Exhib-
it D-1, with such changes thereto as may be approved by
the Administrative Agent;
(ii) the executed legal opinion of Barry J. Miller,
Esq., assistant general counsel of the Borrower, sub-
stantially in the form of Exhibit D-2, with such chang-
es thereto as may be approved by the Administrative
Agent;
(iii) the executed legal opinion of Amster, Rothstein
& Ebenstein, special counsel to the Administrative
Agent with respect to intellectual property matters, in
form and substance reasonably satisfactory to the
Administrative Agent; and
(iv) subject to subsections 7.12 and 7.13, the exe-
cuted legal opinions of special local counsel and
foreign counsel in the jurisdictions set forth on
Schedule 6.1(p), in form and substance reasonably
satisfactory to the Administrative Agent.
Each such legal opinion shall cover such other matters
incident to the transactions contemplated by this Agreement
as the Administrative Agent may reasonably require. In
addition, the Administrative Agent shall have received, with
a copy for each Lender, the legal opinions referred to in
Sections 7.2 and 7.3 of the Merger Agreement and delivered
in connection with the issuance of the Senior Subordinated
Notes.
(q) Pledged Stock; Stock Powers; Pledged Notes. The
Administrative Agent shall have received the certificates
representing the shares pledged pursuant to the Guarantee
and Collateral Agreement, together with an undated stock
power for each such certificate executed in blank by a duly
authorized officer of the pledgor thereof, and the notes
pledged pursuant to the Guarantee and Collateral Agreement,
each endorsed in blank by a duly authorized officer of the
pledgor thereof.
(r) Actions to Perfect Liens. The Administrative
Agent shall have received evidence in form and substance
satisfactory to it that all filings, recordings, registra-
tions and other actions, including, without limitation, the
filing of duly executed financing statements on Form UCC-1,
necessary or, in the opinion of the Administrative Agent,
desirable to perfect the Liens created by the Security
Documents (other than the Foreign Stock Pledge Agreements)
shall have been completed or that all such financing state-
ments and other documents with respect to such filings,
recordings, registrations and other actions shall have been
delivered to the Administrative Agent.
(s) Title Insurance Policy. The Administrative Agent
shall have received in respect of each parcel covered by
each Fee Mortgage and (subject to subsection 7.12) Leasehold
Mortgage a mortgagee's title policy (or policies) or marked
up unconditional binder for such insurance dated the Closing
Date. Each such policy shall (i) be in an amount satisfac-
tory to the Administrative Agent; (ii) be issued at ordinary
rates; (iii) insure that the Mortgage insured thereby cre-
ates a valid first Lien on such parcel free and clear of all
defects and encumbrances, except those permitted by subsec-
tion 8.3 and such as may be approved by the Administrative
Agent; (iv) name the Administrative Agent for the benefit of
the Lenders as the insured thereunder; (v) be in the form of
ALTA Loan Policy - 1992; (vi) contain such endorsements and
affirmative coverage as the Administrative Agent may request
and (vii) be issued by title companies satisfactory to the
Administrative Agent (including any such title companies
acting as co-insurers or reinsurers, at the option of the
Administrative Agent). The Administrative Agent shall have
received evidence satisfactory to it that all premiums in
respect of each such policy, and all charges for mortgage
recording tax, if any, have been paid.
(t) Flood Insurance. If requested by the Administra-
tive Agent, the Administrative Agent shall have received (i)
a policy of flood insurance which (A) covers any parcel of
improved real property located in an area that has been
identified by the Secretary of Housing and Urban Development
as an area having special flood hazards and in which flood
insurance has been made available under the Flood Insurance
Act of 1968, which is encumbered by any Mortgage (subject to
subsection 7.12), (B) is written in an amount not less than
the outstanding principal amount of the indebtedness secured
by such Mortgage which is reasonably allocable to such real
property or the maximum limit of coverage made available
with respect to the particular type of property under the
National Flood Insurance Act of 1968, whichever is less, and
(C) has a term ending not earlier than the maturity of the
indebtedness secured by such Mortgage and (ii) confirmation
that the Company has received the notice required pursuant
to Section 208(e)(3) of Regulation H of the Board of Gover-
nors of the Federal Reserve System.
(u) Copies of Documents. The Administrative Agent
shall have received a copy of all recorded documents re-
ferred to, or listed as exceptions to title in, the title
policy or policies referred to in subsection 6.1(s) and a
copy, certified by such parties as the Administrative Agent
may deem appropriate, of all other documents affecting the
property covered by each Mortgage (subject to subsection
7.12).
(v) Lien Searches. The Administrative Agent shall
have received the results of a recent search by a Person
satisfactory to the Administrative Agent, of the Uniform
Commercial Code, judgement and tax lien filings which may
have been filed with respect to personal property of the
Borrower and its Subsidiaries, and the results of such
search shall be satisfactory to the Administrative Agent.
(w) Insurance. The Administrative Agent shall have
received evidence in form and substance satisfactory to it
that all of the requirements of subsection 7.5 and Section
5.3 of the Guarantee and Collateral Agreement, Section 5 of
each of the Fee Mortgages and Section 5 of each of the
Leasehold Mortgages shall have been satisfied.
(x) Environmental Assessment. The Administrative
Agent shall have received, with a copy for each Lender, one
or more environmental assessments, in form and substance
satisfactory to it, concerning environmental compliance and
liability issues affecting the Borrower and the other Loan
Parties, and, from each consulting firm that prepared such
assessments, written authorization allowing the Administra-
tive Agent and the Lenders to rely on such assessments as if
prepared for and addressed to them.
6.2 Conditions to Each Extension of Credit. The
agreement of each Lender to make any Loan or any other extension
of credit requested to be made by it on any date (including,
without limitation, its initial extension of credit), and of the
Issuing Lender to issue any Letter of Credit requested to be
issued by it on any date, is subject to the satisfaction of the
following conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by the Borrower and any
other Loan Party in or pursuant to the Loan Documents shall
be true and correct in all material respects on and as of
such date as if made on and as of such date, except for
representations and warranties stated to relate to a specif-
ic earlier date, in which case such representations and
warranties shall be true and correct in all material re-
spects on and as of such earlier date.
(b) No Default. No Default or Event of Default shall
have occurred and be continuing on such date or after giving
effect to the extensions of credit requested to be made on
such date.
(c) Additional Matters. All corporate and other
proceedings, and all documents, instruments and other legal
matters in connection with the transactions contemplated by
this Agreement and the other Loan Documents shall be satis-
factory in form and substance to the Administrative Agent,
and the Administrative Agent shall have received such other
documents and legal opinions in respect of any aspect or
consequence of the transactions contemplated hereby or
thereby as it shall reasonably request.
Each borrowing by and Letter of Credit issued on behalf of the
Borrower hereunder shall constitute a representation and warranty
by the Borrower as of the date thereof that the conditions
contained in this subsection have been satisfied.
SECTION 7. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, on and after the
Closing Date and so long as the Commitments remain in effect or
any Letter of Credit remains outstanding and unpaid or any amount
is owing to any Lender or the Administrative Agent hereunder or
under any other Loan Document, the Borrower shall and (except in
the case of delivery of financial information, reports and
notices) shall cause each of its Subsidiaries to:
7.1 Financial Statements. Furnish to each Lender:
(a) as soon as available, but in any event within
90 days after the end of each fiscal year of the Borrower, a
copy of the Consolidated and Consolidating balance sheets of
the Borrower and its consolidated Subsidiaries as at the end
of such year and the related Consolidated and Consolidating
statements of income and Consolidated statements of retained
earnings and of cash flows for such year, setting forth (i)
in the case of such Consolidated balance sheet, in compara-
tive form the budgeted figures as at the end of such fiscal
year and the figures as at the end of the previous fiscal
year and (ii) in the case of such Consolidated statements of
income and of cash flows, in comparative form the budgeted
figures for such fiscal year and the figures for the previ-
ous fiscal year, reported on, in the case of such Consoli-
dated financial statements, without a "going concern" or
like qualification or exception, or qualification arising
out of the scope of the audit, by KPMG Peat Marwick or other
independent certified public accountants of nationally
recognized standing; and
(b) as soon as available, but in any event within 45
days after the end of each of the first three quarterly
periods of each fiscal year of the Borrower, the unaudited
Consolidated balance sheets of the Borrower and its consoli-
dated Subsidiaries as at the end of such quarter and the
related unaudited Consolidated statements of income and of
cash flows of the Borrower and its consolidated Subsidiaries
for such quarter and the portion of the fiscal year through
the end of such quarter, setting forth (i) in the case of
such Consolidated balance sheet, in comparative form the
budgeted figures as at the end of such quarter and the
figures as at the end of the corresponding quarter of the
previous fiscal year and (ii) in the case of such Consoli-
dated statements of income and of cash flows, in comparative
form the budgeted figures for such quarter and the figures
for the corresponding quarter of the previous fiscal year,
certified by a Responsible Officer as being fairly stated in
all material respects (subject to normal year-end audit
adjustments); and
(c) as soon as available, but in any event not later
than 15 days (or, in the event that such 15th day is not a
Business Day, the next succeeding Business Day) after the
end of each month of each fiscal year of the Borrower (or,
in the event that such month ends on the last day of a
fiscal quarter, not later than 45 days after the end of such
month), the unaudited Consolidated balance sheets of the
Borrower and its consolidated Subsidiaries as at the end of
such month and the related unaudited Consolidated statements
of income and of cash flows of the Borrower and its consoli-
dated Subsidiaries for such month and the portion of the
fiscal year through the end of such month, certified by a
Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments);
all such financial statements shall be complete and correct in
all material respects and shall be prepared in reasonable detail
and in accordance with GAAP applied consistently throughout the
periods reflected therein and with prior periods (except as
approved by such accountants or Responsible Officer, as the case
may be, and disclosed therein).
7.2 Certificates; Other Information. Furnish to each
Lender:
(a) concurrently with the delivery of the financial
statements referred to in subsection 7.1(a), a certificate
of the independent certified public accountants reporting on
such financial statements stating that in connection with
their audit nothing has come to their attention to cause
them to believe that the Borrower or any of its Subsidiaries
failed to comply with the covenants contained in Section 8;
provided, however, that such audit shall not have been
directed primarily toward obtaining knowledge of such non-
compliance, except as specified in such certificate;
(b) concurrently with the delivery of the financial
statements referred to in subsections 7.1(a) and (b), a
certificate of a Responsible Officer ("Compliance Certifi-
cate") stating that, to the best of such Officer's knowl-
edge, during such period (i) no Subsidiary has been formed
or acquired (or, if any such Subsidiary has been formed or
acquired, the Borrower has complied with the requirements of
subsection 7.10 with respect thereto), (ii) neither the
Borrower nor any of its Subsidiaries has changed its name,
its principal place of business, its chief executive office
or the location of any material item of tangible Collateral
without complying with the requirements of this Agreement
and the Security Documents with respect thereto, (iii) the
Borrower has observed or performed all of its covenants and
other agreements, and satisfied every condition, contained
in this Agreement and the other Loan Documents to be ob-
served, performed or satisfied by it, and (iv) the Borrower
has set forth in reasonable detail any and all calculations
necessary to show compliance with subsection 2.1(a) and all
of the financial condition covenants set forth in subsec-
tions 8.1 and 8.9, including, without limitation, calcula-
tions and reconciliations, if any, necessary to show compli-
ance with such financial condition covenants on the basis of
generally accepted accounting principles in the United
States of America consistent with those utilized in prepar-
ing the audited financial statements referred to in subsec-
tion 5.1, and that such Officer has obtained no knowledge of
any Default or Event of Default except as specified in such
certificate;
(c) not later than 45 days after the end of each
fiscal year of the Borrower, a copy of the projections by
the Borrower of the balance sheet, statement of income and
statement of cash flows on a consolidated basis of the
Borrower and its Subsidiaries for each of the next succeed-
ing two fiscal years, such projections to be accompanied by
a certificate of a Responsible Officer to the effect that
such projections have been prepared on the basis of sound
financial planning practice and that such Officer has no
reason to believe they are incorrect or misleading in any
material respect;
(d) within five days after the same are sent, copies
of all financial statements and reports which the Borrower
sends to its stockholders, and within five days after the
same are filed, copies of all financial statements and
reports which the Borrower may make to, or file with, the
Securities and Exchange Commission or any successor or
analogous Governmental Authority; and
(e) promptly, such additional financial and other
information as any Lender may from time to time reasonably
request.
7.3 Payment of Obligations. Pay, discharge or other-
wise satisfy at or before maturity or before they become delin-
quent, as the case may be, all its obligations of whatever
nature, including, without limitation, taxes, except where (a)
the amount or validity thereof is currently being contested in
good faith by appropriate proceedings and reserves in conformity
with GAAP with respect thereto have been provided on the books of
the Borrower or its Subsidiaries, as the case may be, or (b) the
failure to so pay, discharge or otherwise satisfy such obliga-
tions could not, in the aggregate, be reasonably be expected to
have a Material Adverse Effect.
7.4 Conduct of Business and Maintenance of Existence.
Continue to engage in business of the same general type as now
conducted by it and preserve, renew and keep in full force and
effect its corporate existence and take all reasonable action to
maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business except as other-
wise permitted pursuant to subsection 8.5; comply with all
Contractual Obligations and Requirements of Law except to the
extent that failure to comply therewith could not, in the aggre-
gate, be reasonably expected to have a Material Adverse Effect.
7.5 Maintenance of Property; Insurance. Keep all
property useful and necessary in its business in good working
order and condition, reasonable wear and tear excepted; maintain
with financially sound and reputable insurance companies insur-
ance on all the Collateral in accordance with the requirements of
Section 5.3 of the Guarantee and Collateral Agreement, Section 5
of each of the Fee Mortgages and Section 5 of each of the Lease-
hold Mortgages and on all its other property in at least such
amounts (including as to amounts of deductibles) and against at
least such risks (but including in any event commercial general
liability, product liability and business interruption) as are
usually insured against in the same general area by companies
engaged in the same or a similar business; and furnish to each
Lender, upon written request, full information as to the insur-
ance carried.
7.6 Inspection of Property; Books and Records; Discus-
sions. Keep proper books of records and account in which full,
true and correct entries in conformity with GAAP and all Require-
ments of Law shall be made of all dealings and transactions in
relation to its business and activities; and permit representa-
tives of any Lender to visit and inspect any of its properties
and examine and make abstracts from any of its books and records
at any reasonable time and upon reasonable notice and as often as
may reasonably be desired and to discuss the business, opera-
tions, properties and financial and other condition of the
Borrower and its Subsidiaries with officers and employees of the
Borrower and its Subsidiaries and with its independent certified
public accountants (provided that any officers or employees of
the Borrower shall be permitted to be present at any such discus-
sions between representatives of any Lender and the Borrower's
independent certified public accountants).
7.7 Notices. Promptly give notice to the Administra-
tive Agent and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any
Contractual Obligation of the Borrower or any of its Subsid-
iaries, including, without limitation, under the Senior
Subordinated Notes or (ii) litigation, investigation or
proceeding which may exist at any time between the Borrower
or any of its Subsidiaries and any Governmental Authority,
which in either case, if not cured or if adversely deter-
mined, as the case may be, could reasonably be expected to
have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrow-
er or any of its Subsidiaries (i) in which the amount in-
volved is $10,000,000 or more and not covered by insurance
or (ii) in which injunctive or similar relief is sought
which could reasonably be expected to have a Material Ad-
verse Effect;
(d) the following events, as soon as possible and in
any event within 30 days after the Borrower knows or has
reason to know thereof: (i) the occurrence or expected
occurrence of any Reportable Event with respect to any Plan,
a failure to make any required contribution to a Plan, the
creation of any Lien in favor of the PBGC or a Plan or any
withdrawal from, or the termination, Reorganization or
Insolvency of, any Multiemployer Plan or (ii) the institu-
tion of proceedings or the taking of any other action by the
PBGC or the Borrower or any Commonly Controlled Entity or
any Multiemployer Plan with respect to the withdrawal from,
or the terminating, Reorganization or Insolvency of, any
Plan;
(e) any material adverse change in the business,
operations, property, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a
whole; and
(f) as soon as possible after a Responsible Officer of
the Borrower knows or reasonably should know thereof, (i)
any release or discharge by the Borrower or any of its
Subsidiaries of any Materials of Environmental Concern
required to be reported under applicable Environmental Laws
to any Governmental Authority, unless the Borrower reason-
ably determines that the total Environmental Costs arising
out of such release or discharge are unlikely to exceed
$10,000,000 or to have a Material Adverse Effect; (ii) any
condition, circumstance, occurrence or event not previously
disclosed in writing to the Administrative Agent that could
result in liability under applicable Environmental Laws
unless the Borrower reasonably determines that the total
Environmental Costs arising out of such condition, circum-
stance, occurrence or event are unlikely to exceed
$10,000,000 or to have a Material Adverse Effect, or could
result in the imposition of any Lien or other restriction on
the title, ownership or transferability of any facilities
and properties owned, leased or operated by the Borrower or
any of its Subsidiaries that could reasonably be expected to
have a Material Adverse Effect; and (iii) any proposed
action to be taken by the Borrower or any of its Subsidiar-
ies that would reasonably be expected to subject the Borrow-
er or any of its Subsidiaries to any material additional or
different requirements or liabilities under Environmental
Laws, unless the Borrower determines that the total Environ-
mental Costs arising out of such proposed action are unlike-
ly to exceed $10,000,000 or to have a Material Adverse
Effect.
Each notice pursuant to this subsection shall be accompanied by a
statement of a Responsible Officer setting forth details of the
occurrence referred to therein and stating what action the
Borrower proposes to take with respect thereto.
7.8 Environmental Laws. (a) (i) Comply substantially
with, and undertake all reasonable efforts to ensure substantial
compliance by all tenants, subtenants, and contractors with, all
applicable Environmental Laws; (ii) obtain, comply substantially
with and maintain any and all Environmental Permits necessary for
its operations as conducted and as planned; and (iii) undertake
all reasonable efforts to ensure that all tenants, subtenants,
and contractors obtain, comply substantially with and maintain
any and all Environmental Permits necessary for their operations
as conducted and as planned, with respect to any property leased
or subleased from, or operated by the Borrower or its Subsidiar-
ies. For purposes of this subsection 7.8(a), the Borrower and
its Subsidiaries shall be deemed to comply substantially, or
require substantial compliance, with an Environmental Law or an
Environmental Permit, provided that they comply with subsection
7.8(c) and that, upon learning of any actual or suspected noncom-
pliance, the Borrower and any such affected Subsidiary shall
promptly undertake all reasonable efforts, if any, to achieve
compliance, and provided, further that in any case such noncom-
pliance would not reasonably be expected to have a Material
Adverse Effect.
(b) Promptly comply with all orders and directives of
all Governmental Authorities regarding Environmental Laws, other
than any such order or directive as to which an appeal or other
appropriate contest is or has been timely and properly taken, is
being diligently pursued in good faith, and the pendency of such
appeal or other appropriate contest would not reasonably be
expected to have a Material Adverse Effect.
(c) Maintain, update as appropriate, and implement in
all material respects an environmental program reasonably de-
signed to (i) ensure that the Borrower, its Subsidiaries, any of
their respective operations (including, without limitation,
disposal), and any properties owned, leased or operated by any of
them, attain and remain in substantial compliance with all
applicable Environmental Laws and (ii) reasonably and prudently
manage any liabilities or potential liabilities that the Borrow-
er, any of the other Loan Parties, any of their respective
operations (including, without limitation, disposal), and any
properties owned or leased by any of them, may have under all
applicable Environmental Laws.
7.9 Further Assurances. Upon the request of the
Administrative Agent, promptly perform or cause to be performed
any and all acts and execute or cause to be executed any and all
documents (including, without limitation, financing statements
and continuation statements) for filing under the provisions of
the Uniform Commercial Code or any other Requirement of Law which
are necessary or advisable to maintain in favor of the Adminis-
trative Agent, for the benefit of the Lenders, Liens on the
Collateral that are duly perfected in accordance with all appli-
cable Requirements of Law.
7.10 Additional Collateral. (a) With respect to any
assets (or any interest therein) acquired after the Closing Date
by the Borrower or any of its Subsidiaries that are intended to
be subject to the Lien created by any of the Security Documents
but which are not so subject (including, without limitation, (x)
any assets described in paragraph (b) or (c) of this subsection
and (y) any real property and improvements thereon expected to be
leased in Clarkesville, Tennessee), promptly (and in any event
within 30 days after the acquisition thereof): (i) execute and
deliver to the Administrative Agent such amendments to the
relevant Security Documents or such other documents as the
Administrative Agent shall deem necessary or advisable to grant
to the Administrative Agent, for the benefit of the Lenders, a
Lien on such assets (or such interest therein), (ii) take all
actions necessary or advisable to cause such Lien to be duly
perfected in accordance with all applicable Requirements of Law,
including, without limitation, the filing of financing statements
and the recording of Mortgages in such jurisdictions as may be
requested by the Administrative Agent, (iii) if requested by the
Administrative Agent, deliver to the Administrative Agent legal
opinions relating to the matters described in clauses (i) and
(ii) immediately preceding, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the
Administrative Agent, and (iv) if requested by the Administrative
Agent, deliver to the Administrative Agent surveys, title insur-
ance and flood insurance as required by subsection 6.1 or 7.12.
(b) With respect to any Person that, subsequent to the
Closing Date, becomes a Subsidiary (other than a Foreign Subsid-
iary), promptly upon the request of the Administrative Agent:
(i) execute and deliver to the Administrative Agent, for the
benefit of the Lenders, a new Pledge Agreement or such amendments
to the Guarantee and Collateral Agreement as the Administrative
Agent shall deem necessary or advisable to grant to the Adminis-
trative Agent, for the benefit of the Lenders, a Lien on the
Capital Stock of such Subsidiary which is owned by the Borrower
or any of its Subsidiaries, (ii) deliver to the Administrative
Agent the certificates representing such Capital Stock, together
with undated stock powers executed and delivered in blank by a
duly authorized officer of the Borrower or such Subsidiary, as
the case may be, (iii) cause such new Subsidiary (A) to become a
party to the Guarantee and Collateral Agreement or to a new
Security Agreement, in each case pursuant to an annex to the
Guarantee and Collateral Agreement or otherwise pursuant to
documentation which is in form and substance satisfactory to the
Administrative Agent, and (B) to take all actions necessary or
advisable to cause the Lien created by the Guarantee and Collat-
eral Agreement or such Security Agreement to be duly perfected in
accordance with all applicable Requirements of Law, including,
without limitation, the filing of financing statements in such
jurisdictions as may be requested by the Administrative Agent and
(iv) if requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters
described in clauses (i), (ii) and (iii) immediately preceding,
which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.
(c) With respect to any Person that, subsequent to the
Closing Date, becomes a Foreign Subsidiary, including, without
limitation, Autokola, promptly upon the request of the Adminis-
trative Agent: (i) execute and deliver to the Administrative
Agent a new Pledge Agreement or such amendments to the Collateral
and Guarantee Agreement as the Administrative Agent shall deem
necessary or advisable to grant to the Administrative Agent, for
the benefit of the Lenders, a Lien on the Capital Stock of such
Subsidiary which is owned by the Borrower or any of its Domestic
Subsidiaries (provided that in no event shall more than 65% of
the Capital Stock of any such Subsidiary be required to be so
pledged), (ii) deliver to the Administrative Agent any certifi-
cates representing such Capital Stock, together with undated
stock powers executed and delivered in blank by a duly authorized
officer of the Borrower or such Subsidiary, as the case may be,
and take or cause to be taken all such other actions under the
law of the jurisdiction of organization of such Foreign Subsid-
iary as may be necessary or advisable to perfect such Lien on
such Capital Stock and (iii) if requested by the Administrative
Agent, deliver to the Administrative Agent legal opinions relat-
ing to the matters described in clauses (i) and (ii) immediately
preceding, which opinions shall be in form and substance, and
from counsel, reasonably satisfactory to the Administrative
Agent.
(d) No later than 45 days following the Closing Date,
at its own expense,
request, and use reasonable efforts to obtain, (i) a consent, in
such form as may be reasonably satisfactory to the Administrative
Agent, from the landlord of each of the existing facilities
located in the United States at which Inventory (as defined in
the Guarantee and Collateral Agreement) of any of the Loan
Parties is located, as of the Closing Date, pursuant to which
such landlord acknowledges the Administrative Agents's first
priority security interest in such Inventory and (ii) prior to
entering into a lease of a facility located in the United States
at which Inventory of any of the Loan Parties will be located on
or after the Closing Date, a consent, in such form as may be
reasonably satisfactory to the Administrative Agent, from the
landlord of each such facility, pursuant to which such landlord
acknowledges the Administrative Agent's first priority security
interest in such Inventory.
7.11 Interest Rate Protection. No later than 90 days
following the Closing Date, enter Interest Rate Protection
Agreements which shall provide interest rate protection in
respect of at least $150,000,000 of Indebtedness of the Borrower,
which shall be in form and substance reasonably satisfactory to
the Administrative Agent and for a term of at least two years.
7.12 Real Property Matters. (a) Promptly following
the Closing Date, but in no event later than 10 Business Days
following the Closing Date, (i) deliver to the Administrative
Agent the Leasehold Mortgage with respect to the real property
and improvements thereon in La Mirada, California leased by the
Borrower or any of its Subsidiaries, executed and delivered by a
duly authorized officer of the party thereto, with a counterpart
or a conformed copy for each Lender, together with title insur-
ance, flood insurance and copies of documents conforming to the
requirements of subsections 6.1(s), 6.1(t) and 6.1(u), respec-
tively, and a legal opinion of special local counsel set forth on
Schedule 6.1(p) with respect to such Leasehold Mortgage, in form
and substance reasonably satisfactory to the Administrative
Agent, and (ii) take all actions necessary or, in the opinion of
the Administrative Agent, desirable to cause the Liens created by
such Leasehold Mortgage to be duly perfected in accordance with
all applicable Requirements of Law, including, without limita-
tion, the recording of such Leasehold Mortgage in such jurisdic-
tions as may be requested by the Administrative Agent.
(b) No later than 10 Business Days following the
Closing Date (or, in the case of such property located in Bowling
Green, Kentucky, no later than 30 Business Days following the
Closing Date), deliver to the Administrative Agent and the title
insurance company issuing the policy referred to in subsection
6.1(s) (the "Title Insurance Company") maps or plats of an as-
built survey of the sites of the property covered by each Fee
Mortgage and Leasehold Mortgage certified to the Administrative
Agent and the Title Insurance Company in a manner satisfactory to
them, dated a date satisfactory to the Administrative Agent and
the Title Insurance Company by an independent professional
licensed land surveyor satisfactory to the Administrative Agent
and the Title Insurance Company, which maps or plats and the
surveys on which they are based shall be made in accordance with
the Minimum Standard Detail Requirements for Land Title Surveys
jointly established and adopted by the American Land Title
Association and the American Congress on Surveying and Mapping in
1992, and, without limiting the generality of the foregoing,
there shall be surveyed and shown on such maps, plats or surveys
the following: (i) the locations on such sites of all the
buildings, structures and other improvements and the established
building setback lines; (ii) the lines of streets abutting the
sites and width thereof; (iii) all access and other easements
appurtenant to the sites or necessary or desirable to use the
sites; (iv) all roadways, paths, driveways, easements, encroach-
ments and overhanging projections and similar encumbrances
affecting the site, whether recorded, apparent from a physical
inspection of the sites or otherwise known to the surveyor; (v)
any encroachments on any adjoining property by the building
structures and improvements on the sites; and (vi) if the site is
described as being on a filed map, a legend relating the survey
to said map.
7.13 Foreign Stock Pledge Agreements. (a) Promptly
following the Closing Date, but in no event later than 30 days
following the Closing Date, (i) deliver to the Administrative
Agent the Foreign Stock Pledge Agreements relating to the pledge
of the shares of each of Hayes Wheels Italy and Hayes Wheels
Spain, executed and delivered by a duly authorized officer of the
Borrower and, in the case of such Foreign Stock Pledge Agreement
relating to the pledge of the shares of Hayes Wheels Italy, Hayes
Wheels International - California, Inc., a Delaware corporation
and a Subsidiary of the Borrower, with a counterpart or a con-
formed copy for each Lender, (ii) deliver to the Administrative
Agent the certificates representing 65% of the Capital Stock of
each of Hayes Wheels Italy and Hayes Wheels Spain, together with,
if required by such Foreign Stock Pledge Agreements, undated
stock powers for each such certificate executed in blank by a
duly authorized officer of the pledgor thereof, (iii) complete
such other actions as are necessary or, in the opinion of the
Administrative Agent, desirable to perfect the Liens created by
such Foreign Stock Pledge Agreements and (iv) cause the delivery
of the executed legal opinion of special foreign counsel set
forth on Schedule 6.1(p) with respect to such Foreign Stock
Pledge Agreements, in form and substance reasonably satisfactory
to the Administrative Agent.
(b) Promptly following the Closing Date, at its own
expense, use reasonable best efforts to (i) deliver to the
Administrative Agent the Foreign Stock Pledge Agreement relating
to the pledge of the shares of Motor Wheel Mexico, executed and
delivered by a duly authorized officer of Motor Wheel, with a
counterpart or a conformed copy for each Lender, (ii) deliver to
the Administrative Agent the certificates representing 65% of the
Capital Stock of Motor Wheel Mexico, together with, if required
by such Foreign Stock Pledge Agreement, undated stock powers for
each such certificate executed in blank by a duly authorized
officer of Motor Wheel, (iii) complete such other actions as are
necessary or, in the opinion of the Administrative Agent, desir-
able to perfect the Liens created by such Foreign Stock Pledge
Agreement and (iv) cause the delivery of the executed legal
opinion of special foreign counsel set forth on Schedule 6.1(p)
with respect to such Foreign Stock Pledge Agreement, in form and
substance reasonably satisfactory to the Administrative Agent.
SECTION 8. NEGATIVE COVENANTS
The Borrower hereby agrees that on and after the
Closing Date and, so long as the Commitments remain in effect or
any Letter of Credit remains outstanding and unpaid or any amount
is owing to any Lender or the Administrative Agent hereunder or
under any other Loan Document, the Borrower shall not, and
(except with respect to subsection 8.1) shall not permit any of
its Subsidiaries to, directly or indirectly:
8.1 Financial Condition Covenants.
(a) Leverage Ratio. Permit the Leverage Ratio as of
the end of each fiscal quarter of the Borrower set forth
below to be greater than the ratio set forth opposite such
fiscal quarter set forth below:
Fiscal Quarter Leverage Ratio
1997 1st 5.50 to 1.00
2nd 5.50 to 1.00
3rd 4.75 to 1.00
4th 4.75 to 1.00
1998 1st 4.50 to 1.00
2nd 4.50 to 1.00
3rd 3.75 to 1.00
4th 3.75 to 1.00
1999 1st 3.75 to 1.00
2nd 3.50 to 1.00
3rd 3.25 to 1.00
4th 3.00 to 1.00
2000 1st 3.00 to 1.00
2nd 3.00 to 1.00
Thereafter 2.75 to 1.00
(b) Interest Coverage Ratio. Permit the Interest
Coverage Ratio as of the end of each fiscal quarter of the
Borrower set forth below to be less than the ratio set forth
opposite such fiscal quarter set forth below:
Fiscal Quarter Interest Coverage Ratio
1996 3rd 1.50 to 1.00
4th 1.50 to 1.00
1997 1st 1.75 to 1.00
2nd 1.875 to 1.00
3rd 2.00 to 1.00
4th 2.00 to 1.00
1998 1st 2.25 to 1.00
2nd 2.25 to 1.00
3rd 2.50 to 1.00
4th 2.50 to 1.00
1999 1st 2.50 to 1.00
2nd 2.75 to 1.00
3rd 2.75 to 1.00
4th 3.00 to 1.00
2000 1st 3.00 to 1.00
2nd 3.00 to 1.00
Thereafter 3.25 to 1.00
(c) Fixed Charge Coverage Ratio. Permit the Fixed
Charge Coverage Ratio as of the end of each fiscal quarter
of the Borrower set forth below to be less than the ratio
set forth opposite such fiscal quarter set forth below:
Fiscal Quarter Fixed Charge Coverage
Ratio
1996 3rd 1.00 to 1.00
4th 1.00 to 1.00
1997 1st 1.00 to 1.00
2nd 1.00 to 1.00
3rd 1.00 to 1.00
4th 1.00 to 1.00
1998 1st 1.00 to 1.00
2nd 1.00 to 1.00
3rd 1.125 to 1.00
4th 1.125 to 1.00
1999 1st 1.125 to 1.00
2nd 1.125 to 1.00
Thereafter 1.25 to 1.00
8.2 Limitation on Indebtedness. Create, incur, assume
or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Borrower under this Agreement
and any Notes;
(b) Indebtedness of the Borrower to any Subsidiary and
of any Subsidiary to the Borrower or any other Subsidiary;
(c) Indebtedness evidenced by the Borrower Notes
outstanding as of the Closing Date and the Senior Subordi-
nated Notes and, in the case of such Borrower Notes, any
refinancings, refundings, renewals or extensions thereof;
provided that the amount of such Indebtedness is not in-
creased at the time of such refinancing, refunding, renewal
or extension of such Borrower Notes and the terms and condi-
tions thereof (including, without limitation, terms and
conditions relating to the interest rate, fees, amortiza-
tion, maturity, subordination (provided that such terms and
conditions relating to subordination are no less favorable
to the Lenders than those of such Borrower Notes), cove-
nants, events of default and remedies) are no less favorable
to the Borrower than those of such Borrower Notes as in
effect after giving effect to the consummation of the Debt
Tender Offer;
(d) Indebtedness of the Borrower and its Subsidiaries
under (i) Interest Rate Protection Agreements contemplated
by subsection 7.11 and (ii) Permitted Hedging Arrangements
permitted by subsection 8.16;
(e) Indebtedness outstanding on the Closing Date and,
in the case of Foreign Subsidiaries, committed on the Clos-
ing Date and, in each case, listed on Schedule 8.2(e) and
any refinancings, refundings, renewals or extensions there-
of; provided that the amount of such Indebtedness is not
increased at the time of such refinancing, refunding, renew-
al or extension;
(f) Indebtedness of a Person which becomes a Subsid-
iary after the Closing Date; provided that (i) such Indebt-
edness existed at the time such Person became a Subsidiary
and was not created in anticipation thereof and (ii) immedi-
ately after giving effect to the acquisition of such Person
by the Borrower no Default or Event of Default shall have
occurred and be continuing, and any refinancings,
refundings, renewals or extensions thereof; provided that
the amount of such Indebtedness is not increased at the time
of such refinancing, refunding, renewal or extension;
(g) Indebtedness of the Borrower and any of its Sub-
sidiaries incurred to finance the acquisition of fixed or
capital assets (whether pursuant to a loan, a Financing
Lease or otherwise) in an aggregate principal amount not
exceeding as to the Borrower and its Subsidiaries
$25,000,000 at any time outstanding;
(h) Indebtedness of the Borrower and its Subsidiaries
under uncommitted lines of credit in an aggregate principal
amount not exceeding at any time the lesser of (i) the then
Available Revolving Credit Commitments and (ii) $25,000,000;
(i) Indebtedness of Foreign Subsidiaries in an aggre-
gate principal amount not exceeding $20,000,000 at any time
outstanding; provided that (i) the proceeds thereof are used
to prepay the Revolving Credit Loans and cash collateralize
the L/C Obligations pursuant to subsection 4.2 and (ii) the
aggregate outstanding principal amount of Indebtedness
permitted by this clause (i), together with the Aggregate
Outstanding Revolving Credit with respect to all the Revolv-
ing Credit Lenders (including the Swing Line Lender), shall
in no event exceed the aggregate Revolving Credit Commit-
ments then in effect;
(j) Indebtedness of Foreign Subsidiaries (i) for
working capital purposes in an aggregate principal amount
not exceeding $20,000,000 at any time outstanding and (ii)
in an additional aggregate principal amount not exceeding
$20,000,000 at any time outstanding;
(k) Indebtedness under the Motor Wheel Notes; provided
that the Motor Wheel Notes shall have been defeased in full
on or prior to the Closing Date in accordance with their
terms and shall have been paid in full no later than 60 days
after the Closing Date; and
(l) Indebtedness in connection with the sale or other
disposition of any accounts receivable in connection with a
receivables financing transaction otherwise permitted by
subsection 8.6(g).
For purposes of determining compliance with clauses
(e), (g), (i) and (j) of this subsection 8.2, the amount of any
Indebtedness denominated in any currency other than Dollars shall
be calculated based on customary currency exchange rates in
effect, in the case of such Indebtedness incurred (in respect of
term debt) or committed (in respect of revolving debt) on or
prior to the Closing Date, on the Closing Date and, in the case
of such Indebtedness incurred (in respect of term debt) or
committed (in respect of revolving debt) after the Closing Date,
on the date that such Indebtedness was incurred (in respect of
term debt) or committed (in respect of revolving debt).
8.3 Limitation on Liens. Create, incur, assume or
suffer to exist any Lien upon any of its property, assets or
revenues, whether now owned or hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being
contested in good faith by appropriate proceedings; provided
that adequate reserves with respect thereto are maintained
on the books of the Borrower or its Subsidiaries, as the
case may be, in conformity with GAAP (or, in the case of
Foreign Subsidiaries, generally accepted accounting princi-
ples in effect from time to time in their respective juris-
dictions of incorporation);
(b) carrier's, warehousemen's, mechanic's, landlord's,
materialmen's, repairmen's or other like Liens arising in
the ordinary course of business which are not overdue for a
period of more than 60 days or which are being contested in
good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social secu-
rity legislation and deposits securing liability to insur-
ance carriers under insurance or self-insurance arrange-
ments;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature incurred in the ordinary
course of business;
(e) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of
business which, in the aggregate, are not substantial in
amount and which do not in any case materially detract from
the value of the property subject thereto or materially
interfere with the ordinary conduct of the business of the
Borrower or such Subsidiary conducted at the property sub-
ject thereto;
(f) Liens on the property or assets of a Person which
becomes a Subsidiary after the Closing Date securing Indebt-
edness permitted by subsection 8.2(f); provided that (i)
such Liens existed at the time such Person became a Subsid-
iary and were not created in anticipation thereof, (ii) any
such Lien is not spread to cover any property or assets of
such Person after the time such corporation becomes a Sub-
sidiary, and (iii) the amount of Indebtedness secured there-
by is not increased;
(g) Liens created pursuant to the Security Documents;
(h) Liens in existence on the Closing Date listed on
Schedule 8.3(h), securing Indebtedness permitted by subsec-
tion 8.2(e); provided that no such Lien is spread to cover
any additional property after the Closing Date and that the
amount of Indebtedness secured thereby is not increased;
(i) Liens securing Indebtedness of the Borrower and
its Subsidiaries permitted by subsection 8.2(g) incurred to
finance the acquisition of fixed or capital assets; provided
that (i) such Liens shall be created substantially simulta-
neously with the acquisition of such fixed or capital as-
sets, (ii) such Liens do not at any time encumber any prop-
erty other than the property financed by such Indebtedness
and (iii) the amount of Indebtedness secured thereby is not
increased;
(j) Liens on assets of any Foreign Subsidiary (includ-
ing, in the case of any Foreign Subsidiary which is not a
direct Subsidiary of the Borrower or any Domestic Subsid-
iary, the Capital Stock of such Foreign Subsidiary) securing
Indebtedness of such Foreign Subsidiary permitted by subsec-
tion 8.2;
(k) Liens arising by reason of any judgment, decree or
order of any court or other Governmental Authority, if
appropriate legal proceedings are being diligently prosecut-
ed and shall not have been finally terminated or the period
within which such proceedings may be initiated shall not
have expired, in an aggregate amount not to exceed
$10,000,000 at any time outstanding;
(l) leases and subleases of real property owned or
leased by the Borrower or any of its Subsidiaries not inter-
fering with the ordinary conduct of the business of the
Borrower and its Subsidiaries;
(m) Liens arising from the sale or other disposition
of any accounts receivable in connection with a receivables
financing transaction otherwise permitted by subsection
8.6(g);
(n) renewals, extensions and replacements of the Liens
permitted under clauses (f) and (h) above; provided that no
such Lien shall as a result thereof cover any additional
assets and the principal amount of Indebtedness secured
thereby is not increased; and
(o) Liens arising in respect of any cash collateral
which supports any reimbursement obligations permitted by
subsection 8.4(f)(ii); provided that any such Liens shall be
discharged promptly following any replacement of the Exist-
ing Letters of Credit pursuant to which such reimbursement
obligations exist or any other termination or release of
such reimbursement obligations.
8.4 Limitation on Guarantee Obligations. Create,
incur, assume or suffer to exist any Guarantee Obligation except:
(a) Guarantee Obligations in existence on the Closing
Date and listed on Schedule 8.4(a), and any refinancing,
refundings, renewals or extensions thereof provided that the
amount of such Guarantee Obligation shall not be increased
at the time of such refinancing, refunding, extension or
renewal;
(b) guarantees made in the ordinary course of its
business by the Borrower or any of its Subsidiaries of
obligations of any of the Borrower's Subsidiaries, which
obligations are otherwise permitted under this Agreement;
(c) the Guarantee and Collateral Agreement and any of
the other Guarantees;
(d) Guarantee Obligations of certain Subsidiaries of
the Borrower set forth in the Senior Subordinated Notes and
the Senior Subordinated Notes Indenture which are subordi-
nated as provided therein;
(e) Guarantee Obligations in respect of Indebtedness
of a Person or Persons in connection with one or more joint
ventures in an aggregate amount not exceeding at any time
outstanding, when aggregated with the amount of any Invest-
ments in cash permitted by subsection 8.10(g) which are
outstanding at such time, an amount equal to the amount of
Investments in cash permitted by subsection 8.10(g) to be
made in such a Person or Persons; provided that no Default
or Event of Default shall have occurred and be continuing on
the date of the incurrence of any such Guarantee Obligations
or would result therefrom;
(f) Guarantee Obligations consisting of (i) any Reim-
bursement Obligation in respect of Letters of Credit and
(ii) any reimbursement obligation in respect of Existing
Letters of Credit; provided that (x) any reimbursement
obligations in respect of such Existing Letters of Credit
are supported by a Letter of Credit or Letters of Credit or
are cash collateralized and (y) such Existing Letters of
Credit are not replaced by a Letter of Credit or Letters of
Credit; and
(g) Guarantee Obligations of a Person which becomes a
Subsidiary after the Closing Date; provided that (i) such
Guarantee Obligations existed at the time such Person became
a Subsidiary and were not created in anticipation thereof
and (ii) immediately after giving effect to the acquisition
of such Person by the Borrower no Default or Event of De-
fault shall have occurred and be continuing, and any
refinancings, refundings, renewals or extensions thereof;
provided that the amount of such Guarantee Obligations is
not increased at the time of such refinancing, refunding,
renewal or extension.
8.5 Limitation on Fundamental Changes. Enter into any
merger, consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution), or
convey, sell, lease, assign, transfer or otherwise dispose of,
all or substantially all of its property, business or assets, or
make any material change in its present method of conducting
business, except:
(a) any Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided that the
Borrower shall be the continuing or surviving corporation)
or with or into any one or more Wholly Owned Subsidiaries of
the Borrower (provided that the Wholly Owned Subsidiary or
Subsidiaries shall be the continuing or surviving corpora-
tion);
(b) any Wholly Owned Subsidiary may sell, lease,
transfer or otherwise dispose of any or all of its assets
(upon voluntary liquidation or otherwise) to the Borrower or
any other Wholly Owned Subsidiary of the Borrower;
(c) mergers and consolidations in connection with
Investments permitted under subsection 8.10(e), subject to
compliance with subsection 7.10; and
(d) sales and other dispositions of assets permitted
by subsection 8.6(b).
8.6 Limitation on Sale of Assets. Convey, sell,
lease, assign, transfer or otherwise dispose of any of its
property, business or assets (including, without limitation,
receivables and leasehold interests), whether now owned or
hereafter acquired, or, in the case of any Subsidiary, issue or
sell any shares of such Subsidiary's Capital Stock to any Person
other than the Borrower or any Wholly Owned Subsidiary, except:
(a) the sale or other disposition of any property in
the ordinary course of business;
(b) the sale or other disposition of any assets at
fair market value; provided that the Net Cash Proceeds of
all sales of assets permitted by this clause (b) in excess
of $30,000,000 are applied to make mandatory prepayments and
permanent reductions of the Revolving Credit Commitments
pursuant to subsection 4.3(c), except that (i) any such Net
Cash Proceeds of sales or other dispositions of assets
permitted by this clause (b) in excess of $30,000,000 to the
extent that they do not exceed $10,000,000 in the aggregate
as to all asset sales or other dispositions permitted by
this clause (b) and that they are used by the Borrower and
its Subsidiaries to acquire fixed or capital assets within
180 days of receipt thereof and (ii) any such Net Cash
Proceeds of sales or other dispositions of assets permitted
by this clause (b) by Foreign Subsidiaries to the extent
that they are used by Foreign Subsidiaries to (x) prepay,
repay or purchase Indebtedness of Foreign Subsidiaries
permitted by subsection 8.2 within 180 days of receipt
thereof or (y) acquire assets used or useful in the busi-
nesses of Foreign Subsidiaries within 180 days of receipt
thereof, shall not be required to be applied to make manda-
tory prepayments and permanent reductions of the Revolving
Credit Commitments pursuant to subsection 4.3(c);
(c) the sale or discount without recourse of accounts
receivable arising in the ordinary course of business, but
only in connection with the compromise or collection there-
of;
(d) as permitted by subsection 8.5(b);
(e) transfers of property or assets in connection with
Investments permitted under subsection 8.10(g);
(f) sales, leases, conveyances, transfers or other
dispositions to the Borrower or to any Subsidiary of the
Borrower or to any Person if after giving effect to such
sale, lease, conveyance, transfer or other disposition such
other Person becomes a Subsidiary, subject to compliance
with subsection 7.10 and, to the extent applicable, subsec-
tion 8.10;
(g) the sale or other disposition of any accounts
receivable in connection with a receivables financing trans-
action on terms and conditions and pursuant to documentation
reasonably satisfactory to the Majority Lenders; provided
that all of the Net Cash Proceeds of all sales or other
dispositions permitted by this clause (g) are applied to
make mandatory prepayments and permanent reductions of the
Revolving Credit Commitments pursuant to 4.3(c); and
(h) dispositions resulting from any casualty or con-
demnation of any property; provided that the proceeds of any
such single disposition of property permitted by this clause
(h) in excess of $2,500,000 are applied pursuant to subsec-
tion 4.3(h).
8.7 Limitation on Leases. Permit Lease Expense for
any fiscal year of the Borrower to exceed $25,000,000.
8.8 Limitation on Dividends. Declare or pay any
dividend on, or make any payment on account of, or set apart
assets for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition of, any
shares of any class of Capital Stock of the Borrower or any
warrants or options to purchase any such Capital Stock, whether
now or hereafter outstanding, or make any other distribution in
respect thereof, either directly or indirectly, whether in cash
or property or in obligations of the Borrower or any Subsidiary,
except for dividends, payments or distributions solely in common
stock of the Borrower.
8.9 Limitation on Capital Expenditures. Make any
expenditure in respect of the purchase or other acquisition of
fixed or capital assets (a "Capital Expenditure") except for
expenditures in the ordinary course of business not exceeding, in
the aggregate for the Borrower and its Subsidiaries during any of
the test periods set forth below, the amount set forth opposite
such test period set forth below:
Test Period Amount
Closing Date - January 31, 1997 $ 50,000,000
February 1, 1997 - January 31, 1998 $ 80,000,000
February 1, 1998 - January 31, 1999 $ 85,000,000
February 1, 1999 - January 31, 2000 $ 90,000,000
February 1, 2000 - January 31, 2001 $ 90,000,000
February 1, 2001 - January 31, 2002 $ 90,000,000
February 1, 2002 - January 31, 2003 $ 90,000,000
February 1, 2003 - January 31, 2004 $ 90,000,000
; provided that (a) up to $25,000,000 of any Capital Expenditures
permitted to be made during any test period and not made during
such test period may be carried over and expended during the next
succeeding test period (it being understood and agreed that any
Capital Expenditures made during such next succeeding test period
shall count, first, against the amount permitted to be made
during such next succeeding test period as set forth in the table
above and, second, against any amounts carried over to such next
succeeding test period) and (b) up to $10,000,000 of any Capital
Expenditures permitted to be made during any test period and not
made during such test period (to the extent not expended during
the next succeeding test period) may be carried over and expended
during the second succeeding test period (it being understood and
agreed that any Capital Expenditures made during such second
succeeding test period shall count, first, against the amount
permitted to be made during such second succeeding test period as
set forth in the table above, second, against any amounts carried
over to such second succeeding test period from the immediately
preceding test period and, third, against any amounts carried
over to such second succeeding test period from the second
preceding test period).
8.10 Limitation on Investments, Loans and Advances.
Make any advance, loan, extension of credit or capital contribu-
tion to, or purchase any stock, bonds, notes, debentures or other
securities of or any assets constituting a business unit of, or
make any other investment, in cash or by transfer of assets or
property, in, any Person (each, an "Investment"), except :
(a) extensions of trade credit in the ordinary course
of business;
(b) Investments in Cash Equivalents;
(c) loans and advances to employees of the Borrower or
its Subsidiaries for travel, entertainment and relocation
expenses in the ordinary course of business in an aggregate
amount for the Borrower and its Subsidiaries not to exceed
$1,000,000 at any one time outstanding;
(d) Investments by the Borrower in its Subsidiaries
and Investments by such Subsidiaries in the Borrower and in
other Subsidiaries of the Borrower;
(e) Investments by the Borrower or any of its Subsid-
iaries in a Person, if as a result of any such Investment
(i) such Person becomes a Subsidiary of the Borrower, sub-
ject to compliance with subsection 7.10, or (ii) such Person
is merged or consolidated with or into, or transfers or
conveys substantially all of its assets to, or is liquidated
into, the Borrower or any of its Subsidiaries; provided that
(x) no Default or Event of Default shall have occurred and
be continuing on the date of any such Investment or would
result therefrom and (y) the aggregate amount of consider-
ation given by the Borrower and its Subsidiaries in respect
of such Investments (other than consideration consisting of
common stock of the Borrower) shall not exceed $25,000,000;
(f) Investments by the Borrower or any of its Subsid-
iaries in the form of promissory notes that are issued to
the Borrower or such Subsidiary by a Person which is not the
Borrower or such Subsidiary solely as partial consideration
for the consummation of an asset sale or other disposition
permitted by subsection 8.6 (not to exceed 25% of the total
consideration received by the Borrower or such Subsidiary in
respect of such asset sale); provided that the aggregate
principal amount of such promissory notes as to all such
asset sales or other dispositions does not exceed
$10,000,000 at any time outstanding and such promissory
notes held by the Borrower or any Domestic Subsidiary are
pledged to the Administrative Agent for the benefit of the
Lenders pursuant to the Security Documents;
(g) Investments in a Person or Persons in connection
with one or more joint ventures in an aggregate amount, when
aggregated with the amount of any Guarantee Obligations
permitted by subsection 8.4(e) which are outstanding at such
time, not to exceed $25,000,000 at any one time outstanding;
provided that (i) such amount shall be increased by an
amount equal to the aggregate amount of cash returned on or
on account of Investments permitted under this clause (g),
whether through interest payments, principal payments,
dividends or other distributions or payments and (ii) the
aggregate amount of such Investments in cash, when aggregat-
ed with the amount of any Guarantee Obligations permitted by
subsection 8.4(e) which are outstanding at such time, shall
not exceed $10,000,000 at any one time outstanding, plus an
amount equal to the amount of cash returned in accordance
with clause (i) above; provided, further that no Investment
shall be permitted under this clause (g) if any Default or
Event of Default shall have occurred and be continuing on
the date of any such Investment or would result therefrom;
(h) Investments in the nature of promissory notes,
other securities or other property received in connection
with the bankruptcy or reorganization of Persons having
obligations in favor of the Borrower or its Subsidiaries, in
settlement of such obligations; provided that such promisso-
ry notes, other securities or other property held by the
Borrower or any Domestic Subsidiary are pledged to the
Administrative Agent for the benefit of the Lenders pursuant
to the Security Documents; and
(i) Investments paid for solely in common stock of the
Borrower.
8.11 Limitation on Optional Payments and Modifications
of Debt Instruments and Transaction Documents. (a) (i) Make
any optional payment or prepayment on or repurchase or redemption
or purchase of the Senior Subordinated Notes or the Borrower
Notes outstanding as of the Closing Date (including, without
limitation, any payment on account of, or for a sinking or other
analogous fund for the repurchase, redemption, defeasance or
other acquisition thereof), (ii) amend, modify or change, or
consent or agree to any amendment, modification or change to any
of the terms of such Indebtedness (other than any such amendment,
modification or change which would extend the maturity or reduce
the amount of any payment of principal thereof or which would
reduce the rate or extend the date for payment of interest
thereon), (iii) amend, modify or change or consent or agree to
any amendment, modification or change to the subordination
provisions or to any of the other provisions of the Senior
Subordinated Notes Indenture, or (iv) amend, modify or change or
consent to or agree to any amendment, modification or change to
any of the provisions of the Transaction Documents (other than
the Senior Subordinated Notes Indenture) which would adversely
affect the Lenders.
(b) In the event of the occurrence of a Change of
Control, repurchase the Senior Subordinated Notes or any portion
thereof, unless the Borrower shall have (i) repaid in full the
Loans, all Reimbursement Obligations and any other amounts then
due and owing to any Lender or the Administrative Agent hereunder
and under any Note or any other Loan Document and cash collater-
alized the L/C Obligations on terms reasonably satisfactory to
the Administrative Agent or (ii) made an offer to repay the
Loans, all Reimbursement Obligations and any other amounts then
due and owing to each Lender and the Administrative Agent hereun-
der and under any Note or any other Loan Document and to cash
collateralize the L/C Obligations in respect of each Lender and
shall have made repayment in full thereof to each such Lender or
the Administrative Agent which has accepted such offer and cash
collateralized the L/C Obligations in respect of each such Lender
which has accepted such offer.
8.12 Limitation on Transactions with Affiliates.
Enter into any transaction, including, without limitation, any
purchase, sale, lease or exchange of property or the rendering of
any service, with any Affiliate unless such transaction is
(a) otherwise permitted under this Agreement, (b) in the ordinary
course of the Borrower's or such Subsidiary's business and
(c) upon fair and reasonable terms no less favorable to the
Borrower or such Subsidiary, as the case may be, than it would
obtain in a comparable arm's length transaction with a Person
which is not an Affiliate. This subsection 8.12 shall not apply
to customary investment banking underwriter, placement agent or
financial advisor fees paid to CIBC and its Affiliates in connec-
tion with services rendered to the Borrower or its Subsidiaries.
8.13 Limitation on Changes in Fiscal Year. Permit the
fiscal year of the Borrower to end on a day other than January
31.
8.14 Limitation on Negative Pledge Clauses. Enter
into with any Person any agreement, which prohibits or limits the
ability of the Borrower or any of its Subsidiaries to create,
incur, assume or suffer to exist any Lien upon any of its proper-
ty, assets or revenues, whether now owned or hereafter acquired,
other than (a) this Agreement, (b) agreements in effect on the
Closing Date, including, without limitation, the Senior Subordi-
nated Notes Indenture, or any refinancing, refunding, renewal or
extension thereof which is permitted hereunder, (c) customary
non-assignment provisions under contracts to the extent such
provisions prohibit or limit the ability to grant a Lien on the
rights under such contracts, (d) agreements under which Indebted-
ness permitted hereunder is incurred by Foreign Subsidiaries, to
the extent such agreements prohibit or limit Liens on assets of
such Foreign Subsidiaries (including, in the case of Foreign
Subsidiaries which are not direct Subsidiaries of the Borrower or
any Domestic Subsidiary, the Capital Stock of such Foreign
Subsidiaries), (e) restrictions on granting Liens on assets under
agreements to sell or otherwise dispose of such assets, and (f)
restrictions in Indebtedness incurred to finance the acquisition
of fixed or capital assets or Financing Leases permitted hereun-
der with respect to Liens on the assets financed thereunder.
8.15 Limitation on Lines of Business. Enter into any
business, either directly or through any Subsidiary or any joint
venture, except for those businesses in which the Borrower and
its Subsidiaries are engaged on the Closing Date or which are
related thereto.
8.16 Limitations on Currency and Commodity Hedging
Transactions. Enter into, purchase or otherwise acquire agree-
ments or arrangements relating to currency, commodity or other
hedging except, to the extent and only to the extent that, such
agreements or arrangements are entered into, purchased or other-
wise acquired in the ordinary course of business of the Borrower
or any of its Subsidiaries with reputable financial institutions
and not for purposes of investment or speculation (any such
agreement or arrangement permitted by this subsection, a "Permit-
ted Hedging Arrangement").
SECTION 9. EVENTS OF DEFAULT
If any of the following events shall occur and be
continuing:
(a) The Borrower shall fail to pay any principal of
any Loan or any Reimbursement Obligation when due in accor-
dance with the terms thereof or hereof; or the Borrower
shall fail to pay any interest on any Loan, or any other
amount payable hereunder, within five days after any such
interest or other amount becomes due in accordance with the
terms thereof or hereof; or
(b) Any representation or warranty made or deemed made
by the Borrower or any other Loan Party herein or in any
other Loan Document or which is contained in any certifi-
cate, document or financial or other written statement
furnished by it at any time under or in connection with this
Agreement or any such other Loan Document shall prove to
have been incorrect in any material respect on or as of the
date made or deemed made; or
(c) The Borrower or any other Loan Party shall default
in the observance or performance of any agreement contained
in subsection 7.7(a), subsection 7.11, subsection 7.12,
subsection 7.13 or Section 8; or
(d) The Borrower or any other Loan Party shall default
in the observance or performance of any other agreement
contained in this Agreement or any other Loan Document
(other than as provided in paragraphs (a) through (c) of
this Section 9), and such default shall continue unremedied
for a period of 30 days or, in the case of any agreement
contained in subsection 7.1 or 7.2, such default shall
continue unremedied for a period ending on the date three
days after notice has been given to the Borrower by the
Administrative Agent or any Lender of the expiration of such
30 day period; or
(e) The Borrower or any of its Subsidiaries shall
(i) default in any payment of principal of or interest on
any Indebtedness (other than the Loans and the Reimbursement
Obligations) in excess of $10,000,000 or in the payment of
any Guarantee Obligation in excess of $10,000,000, beyond
the period of grace (not to exceed 30 days), if any, provid-
ed in the instrument or agreement under which such Indebted-
ness or Guarantee Obligation was created; or (ii) default in
the observance or performance of any other agreement or
condition relating to any such Indebtedness or Guarantee
Obligation or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which default
or other event or condition is to cause, or to permit the
holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Guarantee Obligation (or a trustee or
agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if re-
quired, such Indebtedness to become due prior to its stated
maturity or such Guarantee Obligation to become payable; or
(f) (i) The Borrower or any of its Subsidiaries shall
commence any case, proceeding or other action (A) under any
existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization
or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrange-
ment, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts,
or (B) seeking appointment of a receiver, trustee, custodi-
an, conservator or other similar official for it or for all
or any substantial part of its assets, or the Borrower or
any of its Subsidiaries shall make a general assignment for
the benefit of its creditors; or (ii) there shall be com-
menced against the Borrower or any of its Subsidiaries any
case, proceeding or other action of a nature referred to in
clause (i) above which (A) results in the entry of an order
for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period
of 60 days; or (iii) there shall be commenced against the
Borrower or any of its Subsidiaries any case, proceeding or
other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of
an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal
within 60 days from the entry thereof; or (iv) the Borrower
or any of its Subsidiaries shall take any action in further-
ance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i),
(ii), or (iii) above; or (v) the Borrower or any of its
Subsidiaries shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as
they become due; or
(g) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Sec-
tion 4975 of the Code) involving any Plan, (ii) any "accumu-
lated funding deficiency" (as defined in Section 302 of
ERISA), whether or not waived, shall exist with respect to
any Plan or any Lien in favor of the PBGC or a Plan shall
arise on the assets of the Borrower or any Commonly Con-
trolled Entity, (iii) a Reportable Event shall occur with
respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or
to terminate, any Single Employer Plan, which Reportable
Event or commencement of proceedings or appointment of a
trustee is, in the reasonable opinion of the Majority Lend-
ers, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan
shall terminate for purposes of Title IV of ERISA, (v) the
Borrower or any Commonly Controlled Entity shall, or in the
reasonable opinion of the Majority Lenders is likely to,
incur any liability in connection with a withdrawal from, or
the Insolvency or Reorganization of, a Multiemployer Plan or
(vi) any other event or condition shall occur or exist with
respect to a Plan; and in each case in clauses (i) through
(vi) above, such event or condition, together with all other
such events or conditions, if any, could reasonably be
expected to have a Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered
against the Borrower or any of its Subsidiaries involving in
the aggregate a liability (not paid or fully covered by
insurance) of $10,000,000 or more, and all such judgments or
decrees shall not have been vacated, discharged, stayed or
bonded pending appeal within 60 days from the entry thereof;
or
(i) Except as, and to the extent, permitted by this
Agreement, (i) any of the Security Documents or any of the
other Loan Documents shall cease, for any reason, to be in
full force and effect, or the Borrower or any other Loan
Party which is a party to any of the Security Documents or
any of the other Loan Documents shall so assert or (ii) the
Lien created by any of the Security Documents shall cease to
be enforceable and of the same effect and priority purported
to be created thereby; or
(j) The occurrence of any Change of Control; or
(k) The Senior Subordinated Notes, for any reason,
shall not be or shall cease to be validly subordinated, as
provided therein and in the Senior Subordinated Notes Inden-
ture, to the obligations of the Borrower under this Agree-
ment, any Notes and the other Loan Documents, or the obliga-
tions of any other Loan Party under a guarantee of the
Senior Subordinated Notes, for any reason, shall not be or
shall cease to be validly subordinated as provided therein
and in the Senior Subordinated Notes Indenture to the obli-
gations of such Loan Party under the Guarantee and Collater-
al Agreement or any of the Guarantees to which it is a
party; or
(l) (i) If any of the remaining contributions referred
to in the PBGC Term Sheet in an aggregate amount in excess
of $10,000,000 shall not be paid within 30 days after the
date on which such contributions are due or if such remain-
ing contributions in an aggregate amount in excess of
$10,000,000 shall become immediately due and payable or (ii)
any Lien in favor of the PBGC shall arise on the assets of
the Borrower or any of its Subsidiaries with respect to the
transactions contemplated by the PBGC Term Sheet or the
definitive documentation with respect to the PBGC Term Sheet
(it being understood and agreed that the Lenders shall not
seek to enjoin any such Liens from arising based on subsec-
tion 8.3);
then, and in any such event, (A) if such event is an Event of
Default specified in clause (i) or (ii) of paragraph (f) of this
Section with respect to the Borrower, automatically the Commit-
ments shall immediately terminate and automatically the Loans
hereunder (with accrued interest thereon) and all other amounts
owing under this Agreement (including, without limitation, all
amounts of L/C Obligations, whether or not the beneficiaries of
the then outstanding Letters of Credit shall have presented the
documents required thereunder) shall immediately become due and
payable, and (B) if such event is any other Event of Default,
either or both of the following actions may be taken: (i) with
the consent of the Majority Lenders, the Administrative Agent
may, or upon the request of the Majority Lenders, the Administra-
tive Agent shall, by notice to the Borrower declare the Commit-
ments to be terminated forthwith, whereupon the Commitments shall
immediately terminate; and (ii) with the consent of the Majority
Lenders, the Administrative Agent may, or upon the request of the
Majority Lenders, the Administrative Agent shall, by notice to
the Borrower, declare the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement (in-
cluding, without limitation, all amounts of L/C Obligations,
whether or not the beneficiaries of the then outstanding Letters
of Credit shall have presented the documents required thereunder)
and the Notes to be due and payable forthwith, whereupon the same
shall immediately become due and payable.
With respect to all Letters of Credit with respect to
which presentment for honor shall not have occurred at the time
of an acceleration pursuant to the preceding paragraph, the
Borrower shall at such time deposit in a cash collateral account
opened by the Administrative Agent an amount equal to the aggre-
gate then undrawn and unexpired amount of such Letters of Credit.
The Borrower hereby grants to the Administrative Agent, for the
benefit of the Issuing Lender and the L/C Participants, a securi-
ty interest in such cash collateral to secure all obligations of
the Borrower under this Agreement and the other Loan Documents.
Amounts held in such cash collateral account shall be applied by
the Administrative Agent to the payment of drafts drawn under
such Letters of Credit, and the unused portion thereof after all
such Letters of Credit shall have expired or been fully drawn
upon, if any, shall be applied to repay other obligations of the
Borrower hereunder and under the Notes. Within a reasonable
period after all such Letters of Credit shall have expired or
been fully drawn upon, all Reimbursement Obligations shall have
been satisfied and all other obligations of the Borrower hereun-
der and under the Notes shall have been paid in full, the bal-
ance, if any, in such cash collateral account shall be returned
to the Borrower. The Borrower shall execute and deliver to the
Administrative Agent, for the account of the Issuing Lender and
the L/C Participants, such further documents and instruments as
the Administrative Agent may request to evidence the creation and
perfection of the within security interest in such cash collater-
al account.
Except as expressly provided above in this Section,
presentment, demand, protest and all other notices of any kind
are hereby expressly waived.
SECTION 10. THE MANAGING AGENTS
10.1 Appointment. Each Lender hereby irrevocably
designates and appoints CIBC as the Administrative Agent of such
Lender under this Agreement and the other Loan Documents and
Merrill Lynch as Documentation Agent under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes
CIBC as the Administrative Agent and Merrill Lynch as the Docu-
mentation Agent, in such capacities, to take such action on its
behalf under the provisions of this Agreement and the other Loan
Documents and to exercise such powers and perform such duties as
are expressly delegated to the Administrative Agent and the
Documentation Agent by the terms of this Agreement and the other
Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the
contrary elsewhere in this Agreement, neither the Administrative
Agent nor the Documentation Agent shall have any duties or
responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Loan Document or
otherwise exist against either the Administrative Agent or the
Documentation Agent.
10.2 Delegation of Duties. The Administrative Agent
may execute any of its duties under this Agreement and the other
Loan Documents by or through agents or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters
pertaining to such duties. The Administrative Agent shall not be
responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
10.3 Exculpatory Provisions. Neither the Administra-
tive Agent, the Documentation Agent nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (i) liable for any action lawfully taken or
omitted to be taken by it or such Person under or in connection
with this Agreement or any other Loan Document (except for its or
such Person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by the Borrower or
any officer thereof contained in this Agreement or any other Loan
Document or in any certificate, report, statement or other
document referred to or provided for in, or received by the
Administrative Agent or the Documentation Agent under or in
connection with, this Agreement or any other Loan Document or for
the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document or
for any failure of the Borrower to perform its obligations
hereunder or thereunder. Neither the Administrative Agent nor
the Documentation Agent shall be under any obligation to any
Lender to ascertain or to inquire as to the observance or perfor-
mance of any of the agreements contained in, or conditions of,
this Agreement or any other Loan Document, or to inspect the
properties, books or records of the Borrower.
10.4 Reliance by Administrative Agent and Documenta-
tion Agent. Each of the Administrative Agent and the Documenta-
tion Agent shall be entitled to rely, and shall be fully protect-
ed in relying, upon any Note, writing, resolution, notice,
consent, certificate, affidavit, letter, telecopy, telex or
teletype message, statement, order or other document or conversa-
tion reasonably believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel (including,
without limitation, counsel to the Borrower), independent accoun-
tants and other experts selected by it. The Administrative Agent
may deem and treat the payee of any Note as the owner thereof for
all purposes unless a written notice of assignment, negotiation
or transfer thereof shall have been filed with the Administrative
Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or
any other Loan Document unless it shall first receive such advice
or concurrence of the Majority Lenders as it deems appropriate or
it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred
by it by reason of taking or continuing to take any such action.
The Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and
the other Loan Documents in accordance with a request of the
Majority Lenders, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the
Lenders and all future holders of the Loans.
10.5 Notice of Default. The Administrative Agent
shall not be deemed to have knowledge or notice of the occurrence
of any Default or Event of Default hereunder unless the Adminis-
trative Agent has received notice from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default".
In the event that the Administrative Agent receives such a
notice, the Administrative Agent shall give notice thereof,
reasonably promptly thereof to the Documentation Agent and to the
Lenders. The Administrative Agent shall take such action reason-
ably promptly with respect to such Default or Event of Default as
shall be reasonably directed by the Majority Lenders; provided
that unless and until the Administrative Agent shall have re-
ceived such directions, the Administrative Agent may (but shall
not be obligated to) take such action, or refrain from taking
such action, with respect to such Default or Event of Default as
it shall deem advisable in the best interests of the Lenders.
10.6 Non-Reliance on Administrative Agent, Documenta-
tion Agent and Other Lenders. Each Lender expressly acknowledges
that neither the Administrative Agent, the Documentation Agent
nor any of their respective officers, directors, employees,
agents, attorneys-in-fact or Affiliates has made any representa-
tions or warranties to it and that no act by the Administrative
Agent or the Documentation Agent hereinafter taken, including any
review of the affairs of the Borrower or any other Loan Party,
shall be deemed to constitute any representation or warranty by
the Administrative Agent or the Documentation Agent to any
Lender. Each Lender represents to the Administrative Agent and
the Documentation Agent that it has, independently and without
reliance upon the Administrative Agent or the Documentation Agent
or any other Lender, and based on such documents and information
as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial
and other condition and creditworthiness of the Borrower and made
its own decision to make its Loans hereunder and enter into this
Agreement. Each Lender also represents that it will, indepen-
dently and without reliance upon the Administrative Agent or the
Documentation Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and
decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigation as it
deems necessary to inform itself as to the business, operations,
property, financial and other condition and creditworthiness of
the Borrower or any of the other Loan Parties and the other Loan
Parties. Except for notices, reports and other documents ex-
pressly required to be furnished to the Lenders by the Adminis-
trative Agent hereunder, the Administrative Agent and the Docu-
mentation Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concern-
ing the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower or any
of the other Loan Parties which may come into the possession of
the Administrative Agent or the Documentation Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
10.7 Indemnification. The Lenders agree to indemnify
each of the Administrative Agent and the Documentation Agent in
their respective capacities as such (to the extent not reimbursed
by the Borrower or any of the other Loan Parties and without
limiting the obligation of the Borrower or any of the other Loan
Parties to do so), ratably according to their respective Commit-
ment Percentages in effect on the date on which indemnification
is sought, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the
payment of the Loans) be imposed on, incurred by or asserted
against the Administrative Agent or the Documentation Agent in
any way relating to or arising out of, the Commitments, this
Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transac-
tions contemplated hereby or thereby or any action taken or
omitted by the Administrative Agent or the Documentation Agent
under or in connection with any of the foregoing; provided that
no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from
the Administrative Agent's or the Documentation Agent's gross
negligence or willful misconduct, as the case may be. The
agreements in this subsection shall survive the payment of the
Loans and all other amounts payable hereunder.
10.8 Administrative Agent and Documentation Agent in
Their Individual Capacities. The Administrative Agent, the
Documentation Agent and their respective Affiliates may make
loans to, accept deposits from and generally engage in any kind
of business with the Borrower as if the Administrative Agent and
the Documentation Agent were not the Administrative Agent or the
Documentation Agent, as the case may be, hereunder and under the
other Loan Documents. With respect to the Loans made by it and
with respect to any Letter of Credit issued or participated in by
it, each of the Administrative Agent and the Documentation Agent
shall have the same rights and powers under this Agreement and
the other Loan Documents as any Lender and may exercise the same
as though it were not the Administrative Agent or the Documenta-
tion Agent, as the case may be, and the terms "Lender" and
"Lenders" shall include each of the Administrative Agent and the
Documentation Agent in its individual capacity.
10.9 Successor Administrative Agent. The Administra-
tive Agent may resign as Administrative Agent upon 10 days'
notice to the Lenders. If the Administrative Agent shall resign
as Administrative Agent under this Agreement and the other Loan
Documents, then the Majority Lenders shall appoint from among the
Lenders a successor agent for the Lenders, which successor agent
(provided that it shall have been approved by the Borrower),
shall succeed to the rights, powers and duties of the Administra-
tive Agent hereunder. Effective upon such appointment and
approval, the term "Administrative Agent" shall mean such succes-
sor agent, such former Administrative Agent's rights, powers and
duties as Administrative Agent shall be terminated, without any
other or further act or deed on the part of such former Adminis-
trative Agent or any of the parties to this Agreement or any
holders of the Loans. After any retiring Administrative Agent's
resignation as Administrative Agent, the provisions of this
Section 10 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was an Administrative Agent
under this Agreement and the other Loan Documents.
10.10 Issuing Lender. The provisions of this Section
10 shall apply to the Issuing Lender in its capacity as such to
the same extent that such provisions apply to the Administrative
Agent.
10.11 Releases of Guarantees and Collateral. In
connection with the sale or other disposition of all of the
Capital Stock of any Guarantor or the sale or other disposition
of Collateral (as defined in each of the Security Documents)
permitted under subsection 8.6, the Administrative Agent shall,
and is hereby authorized by the Lenders to, promptly, upon the
request of the Borrower and at the sole expense of the Borrower,
take all actions reasonably necessary to release such Guarantor
from its guarantee contained in the Guarantee and Collateral
Agreement or its Guarantee or to release the Collateral subject
to such sale or other disposition, as the case may be, and shall
take any other actions reasonably requested by the Borrower to
effect the transactions permitted under subsection 8.6.
SECTION 11. MISCELLANEOUS
11.1 Amendments and Waivers. Neither this Agreement
nor any other Loan Document, nor any terms hereof or thereof may
be amended, supplemented or modified except in accordance with
the provisions of this subsection. The Majority Lenders may, or,
with the written consent of the Majority Lenders, the Administra-
tive Agent may, from time to time, (a) enter into with the
Borrower and the other Loan Parties written amendments, supple-
ments or modifications hereto and to the other Loan Documents for
the purpose of amending, supplementing or modifying any provi-
sions of this Agreement or the other Loan Documents or changing
in any manner the rights of the Lenders or of the Borrower
hereunder or thereunder or (b) waive, on such terms and condi-
tions as the Majority Lenders or the Administrative Agent, as the
case may be, may specify in such instrument, any of the require-
ments of this Agreement or the other Loan Documents or any
Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, supplement or
modification shall:
(i) reduce the amount or extend the scheduled date of
maturity of any Loan or any installment thereof or any
Reimbursement Obligation or reduce the stated rate of any
interest or fee payable hereunder or extend the scheduled
date of any payment thereof or increase the amount or extend
the expiration date of any Lender's Commitments, in each
case without the consent of each Lender affected thereby; or
(ii) amend, modify or waive any provision of this
subsection 11.1 or reduce the percentage specified in the
definition of Majority Lenders, or consent to the assignment
or transfer by the Borrower of any of its rights and obliga-
tions under this Agreement and the other Loan Documents or
release any guarantee obligation contained in the Guarantee
and Collateral Document or any of the other Guarantees or
release all or a substantial part of the Collateral (other
than in connection with any release permitted by subsection
10.11), in each case without the written consent of all the
Lenders; or
(iii) amend, modify or waive any provision of Section 10
without the written consent of the then Administrative
Agent; or
(iv) amend, modify or waive any provision of this
Agreement regarding the allocation of prepayment amounts
among the Term Loans or the application of such prepayment
amounts to the respective installments of principal under
the respective Term Loans without the written consent of (x)
the Tranche A Term Loan Lenders the Tranche A Term Loan
Commitment Percentages of which aggregate more than 50%,
(y) the Tranche B Term Loan Lenders the Tranche B Term Loan
Commitment Percentages of which aggregate more than 50% and
(z) the Tranche C Term Loan Lenders the Tranche C Term Loan
Commitment Percentages of which aggregate more than 50%; or
(v) subject to clause (i) of this subsection 11.1(a)
as it relates to reducing the amount or extending the sched-
uled date of maturity of any Loan or any installment there-
of, amend, modify or waive any provision of (x) subsection
2.7 (to the extent subsection 2.7 relates to the Tranche A
Term Loans) or subsection 2.8 without the written consent of
Tranche A Term Loan Lenders the Tranche A Term Loan Commit-
ment Percentages of which aggregate more than 50%,
(y) subsection 2.7 (to the extent subsection 2.7 relates to
the Tranche B Term Loans) or subsection 2.9 without the
written consent of Tranche B Term Loan Lenders the Tranche B
Term Loan Percentages of which aggregate more than 50% or
(z) subsection 2.7 (to the extent that subsection 2.7 re-
lates to the Tranche C Term Loans) or subsection 2.10 with-
out the written consent of Tranche C Term Loan Lenders the
Tranche C Term Loan Percentages of which aggregate more than
50%; or
(vi) amend, modify or waive any provision of subsection
2.1, 2.2, 2.3, 2.5 or 2.6 or, subject to paragraph (i) of
this subsection 11.1(a) as it relates to reducing the amount
or extending the scheduled date of maturity of any Reim-
bursement Obligation, Section 3 without the written consent
of the Revolving Credit Lenders the Revolving Credit Commit-
ment Percentages of which aggregate more than 50%; or
(vii) amend, modify or waive any provision of the Swing
Line Note (if any) or subsection 2.6 without the written
consent of the Swing Line Lender; or
(viii) amend, modify or waive the provisions of any
Letter of Credit or any L/C Obligation without the written
consent of the Issuing Lender; or
(ix) amend, modify or waive any provision of any Secu-
rity Document that provides for the ratable sharing by the
Lenders under such Security Document of the proceeds of any
realization on the Collateral to provide for a non-ratable
sharing thereof, without the consent of (w) the Revolving
Credit Lenders the Revolving Credit Commitment Percentages
of which aggregate more than 50%, (x) the Tranche A Term
Loan Lenders the Tranche A Term Loan Commitment Percentages
of which aggregate more than 50%, (y) the Tranche B Term
Loan Lenders the Tranche B Term Loan Commitment Percentages
of which aggregate more than 50% and (z) the Tranche C Term
Loan Lenders the Tranche C Term Loan Commitment Percentages
of which aggregate more than 50%.
Any such waiver and any such amendment, supplement or
modification shall apply equally to each of the Lenders and shall
be binding upon the Borrower, the Lenders, the Administrative
Agent and all future holders of the Loans. In the case of any
waiver, the Borrower, the Lenders and the Administrative Agent
shall be restored to their former positions and rights hereunder
and under the other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; no
such waiver shall extend to any subsequent or other Default or
Event of Default or impair any right consequent thereon.
11.2 Notices. All notices, requests and demands to or
upon the respective parties hereto to be effective shall be in
writing (including by facsimile transmission) and, unless other-
wise expressly provided herein, shall be deemed to have been duly
given or made (a) in the case of delivery by hand or by overnight
courier, when delivered, (b) in the case of delivery by mail,
three days after being deposited in the mails, postage prepaid,
or (c) in the case of delivery by facsimile transmission, when
sent and receipt has been confirmed, addressed as follows in the
case of the Borrower and each Managing Agent, and as set forth in
Schedule A in the case of the other parties hereto, or to such
other address as may be hereafter notified by the respective
parties hereto:
The Borrower:
Hayes Wheels International, Inc.
38481 Huron River Drive
Romulus, Michigan 48174
Attention: Treasurer
Fax: (313) 942-7783
with a copy to:
Hayes Wheels International, Inc.
38481 Huron River Drive
Romulus, Michigan 48174
Attention: General Counsel
Fax: (313) 942-5199
The Administrative Agent:
Canadian Imperial Bank of Commerce
425 Lexington Avenue
7th Floor
New York, New York 10017
Attention: Ian Palmer
Fax: (212) 856-3763
The Documentation Agent:
Merrill Lynch Capital Corporation
World Financial Center
North Tower
New York, New York 10281
Attention: John F. Yang
Fax: (212) 449-8230
provided that any notice, request or demand to or upon the
Administrative Agent or the Lenders pursuant to subsection 2.3,
2.5, 2.6, 2.11, 3.2, 4.2, 4.4 or 4.8 shall not be effective
until received.
11.3 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Adminis-
trative Agent or any Lender, any right, remedy, power or privi-
lege hereunder or under the other Loan Documents shall operate as
a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exclusive of
any rights, remedies, powers and privileges provided by law.
11.4 Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan
Documents (or in any amendment, modification or supplement hereto
or thereto) and in any document, certificate or statement deliv-
ered pursuant hereto or in connection herewith shall survive the
execution and delivery of this Agreement and the making of the
Loans hereunder.
11.5 Payment of Expenses and Taxes. The Borrower
agrees (a) to pay or reimburse the Administrative Agent and the
Documentation Agent for all their respective out-of-pocket costs
and expenses incurred in connection with the development, prepa-
ration and execution of, and any amendment, supplement or modifi-
cation to, this Agreement and the other Loan Documents and any
other documents prepared in connection herewith or therewith, and
the consummation and administration of the transactions contem-
plated hereby and thereby (including the syndication of the
Revolving Credit Commitments and Term Loans (including the
reasonable expenses of the Administrative Agent's due diligence
investigation)), including, without limitation, the reasonable
fees and disbursements of counsel to the Administrative Agent and
the Documentation Agent, (b) to pay or reimburse each Lender and
the Administrative Agent for all their respective costs and
expenses incurred in connection with the enforcement or preserva-
tion of any rights under this Agreement, the other Loan Documents
and any such other documents, including, without limitation, the
fees and disbursements of counsel (including the allocated fees
and expenses of in-house counsel) to the respective Lenders and
the Administrative Agent, (c) to pay, indemnify, and hold each
Lender and the Administrative Agent harmless from, any and all
recording and filing fees and any and all liabilities with
respect to, or resulting from any delay in paying, stamp, excise
and other taxes, if any, which may be payable or determined to be
payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contem-
plated by, or any amendment, supplement or modification of, or
any waiver or consent under or in respect of, this Agreement, the
other Loan Documents and any such other documents, and (d) to
pay, indemnify, and hold each Lender and the Administrative Agent
and their respective directors, trustees, officers, employees and
agents harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the other Loan
Documents, the Transaction Documents or the use or proposed use
of the proceeds of the Loans in connection with the transactions
contemplated hereby and thereby and any such other documents
regardless of whether the Administrative Agent or any Lender is a
party to the litigation or other proceeding giving rise thereto
and regardless of whether any such litigation or other proceeding
is brought by the Borrower or any other Person, including,
without limitation, any of the foregoing relating to the viola-
tion of, noncompliance with or liability under, any Environmental
Law applicable to the operations of the Borrower, any of its
Subsidiaries or any of the facilities and properties owed, leased
or operated by the Borrower or any of its Subsidiaries (all the
foregoing in this clause (d), collectively, the "indemnified
liabilities"), provided that the Borrower shall have no obliga-
tion hereunder to the Administrative Agent or any Lender or any
other Person with respect to indemnified liabilities arising
from the gross negligence or willful misconduct of the party
seeking indemnification. The agreements in this subsection shall
survive repayment of the Loans and all other amounts payable
hereunder.
11.6 Successors and Assigns; Participations and
Assignments. (a) This Agreement shall be binding upon and inure
to the benefit of the Borrower, the Lenders, the Administrative
Agent, Documentation Agent and their respective successors and
assigns, except that the Borrower may not assign or transfer any
of its rights or obligations under this Agreement without the
prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its
business or investment activities and in accordance with applica-
ble law, at any time sell to one or more banks or other entities
("Participants") participating interests in any Loan owing to
such Lender, any Commitment of such Lender or any other interest
of such Lender hereunder and under the other Loan Documents. In
the event of any such sale by a Lender of a participating inter-
est to a Participant, such Lender's obligations under this
Agreement to the other parties to this Agreement shall remain
unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any
such Loan for all purposes under this Agreement and the other
Loan Documents, and the Borrower and the Administrative Agent
shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this
Agreement and the other Loan Documents. No Lender shall be
entitled to create in favor of any Participant, in the participa-
tion agreement pursuant to which such Participant's participating
interest shall be created or otherwise, any right to vote on,
consent to or approve any matter relating to this Agreement or
any other Loan Document except for those matters specified in
clauses (i) and (ii) of the proviso to subsection 11.1. The
Borrower agrees that if amounts outstanding under this Agreement
are due or unpaid, or shall have been declared or shall have
become due and payable upon the occurrence of an Event of De-
fault, each Participant shall, to the maximum extent permitted by
applicable law, be deemed to have the right of setoff in respect
of its participating interest in amounts owing under this Agree-
ment to the same extent as if the amount of its participating
interest were owing directly to it as a Lender under this Agree-
ment, provided that, in purchasing such participating interest,
such Participant shall be deemed to have agreed to share with the
Lenders the proceeds thereof as provided in subsection 11.7(a) as
fully as if it were a Lender hereunder. The Borrower also agrees
that each Participant shall be entitled to the benefits of
subsections 4.10, 4.11 and 4.12 with respect to its participation
in the Commitments and the Loans outstanding from time to time as
if it was a Lender; provided that, in the case of subsection
4.11, such Participant shall have complied with the requirements
of said subsection and provided, further that no Participant
shall be entitled to receive any greater amount pursuant to any
such subsection than the transferor Lender would have been
entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such Participant had no
such transfer occurred.
(c) Any Lender may, in the ordinary course of its
business or investment activities and in accordance with applica-
ble law, at any time and from time to time assign to any Lender
or any branch or affiliate thereof or, with the consent of the
Borrower and the Administrative Agent (which in each case shall
not be unreasonably withheld or delayed), to an additional bank
or financial institution (an "Assignee") all or any part of its
rights and obligations under this Agreement and the other Loan
Documents pursuant to an Assignment and Acceptance, substantially
in the form of Exhibit F, executed by such Assignee and such
assigning Lender (and, in the case of an Assignee that is not
then a Lender or a branch or an affiliate thereof, by the Borrow-
er and the Administrative Agent) and delivered to the Administra-
tive Agent for its acceptance and recording in the Register,
provided that, in the case of any such assignment to an addition-
al bank or financial institution, if such assignment is of less
than all of the rights and obligations of the assigning Lender,
the sum of the aggregate principal amount of the Loans, the
aggregate amount of the L/C Obligations and the aggregate amount
of the Available Revolving Credit Commitment being assigned shall
not be less than $5,000,000 (or such lesser amount as may be
agreed to by the Borrower and the Administrative Agent). Upon
such execution, delivery, acceptance and recording, from and
after the effective date determined pursuant to such Assignment
and Acceptance, (x) the Assignee thereunder shall be a party
hereto and, to the extent provided in such Assignment and Accep-
tance, have the rights and obligations of a Lender hereunder with
a Commitment as set forth therein, and (y) the assigning Lender
thereunder shall, to the extent provided in such Assignment and
Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or
the remaining portion of an assigning Lender's rights and obliga-
tions under this Agreement, such assigning Lender shall cease to
be a party hereto but shall nonetheless continue to be entitled
to the benefits of subsections 4.10, 4.11, 4.12 and 11.5).
Notwithstanding any provision of this paragraph (c) and paragraph
(e) of this subsection, the consent of the Borrower shall not be
required, and, unless requested by the Assignee and/or the
assigning Lender, new Notes shall not be required to be executed
and delivered by the Borrower, for any assignment which occurs at
any time when any of the Events of Default described in Section
9(f) shall have occurred and be continuing.
(d) The Administrative Agent, on behalf of the Borrow-
er, shall maintain at the address of the Administrative Agent
referred to in subsection 11.2 a copy of each Assignment and
Acceptance delivered to it and a register (the "Register") for
the recordation of the names and addresses of the Lenders and the
Commitments of, and principal amounts of the Loans owing to, and
any Notes evidencing the Loans owned by, each Lender from time to
time. The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrower, the Administrative
Agent and the Lenders shall treat each Person whose name is
recorded in the Register as the owner of a Loan or other obliga-
tion hereunder as the owner thereof for all purposes of this
Agreement and the other Loan Documents, notwithstanding any
notice to the contrary. Any assignment of any Loan or other
obligation hereunder shall be effective only upon appropriate
entries with respect thereto being made in the Register. The
Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon reason-
able prior notice.
(e) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an Assignee (and, in the case
of an Assignee that is not then a Lender or an affiliate thereof,
by the Borrower and the Administrative Agent) together with
payment to the Administrative Agent of a registration and pro-
cessing fee of $3,500, the Administrative Agent shall promptly
accept such Assignment and Acceptance and record the information
contained therein in the Register and give notice of such accep-
tance and recordation to the Lenders and the Borrower. Such
Assignment and Acceptance and the assignment evidenced thereby
shall only be effective upon appropriate entries with respect to
the information contained therein being made in the Register
pursuant to subsection 11.6(d).
(f) The Borrower authorizes each Lender to disclose to
any Participant or Assignee (each, a "Transferee") and any
prospective Transferee, subject to such Person agreeing to comply
with the provisions of subsection 11.15, any and all financial
and other information in such Lender's possession concerning the
Borrower and its Affiliates which has been delivered to such
Lender by or on behalf of the Borrower pursuant to this Agreement
or which has been delivered to such Lender by or on behalf of the
Borrower in connection with such Lender's credit evaluation of
the Borrower and its Affiliates prior to becoming a party to this
Agreement.
(g) For avoidance of doubt, the parties to this
Agreement acknowledge that the provisions of this subsection
concerning assignments of Loans and Notes relate only to absolute
assignments and that such provisions do not prohibit assignments
creating security interests, including, without limitation, any
pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law.
11.7 Adjustments; Set-off. (a) If any Lender (a
"benefitted Lender") shall at any time receive any payment of all
or part of its Loans or the Reimbursement Obligations owing to
it, or interest thereon, or receive any collateral in respect
thereof (whether voluntarily or involuntarily, by set-off,
pursuant to events or proceedings of the nature referred to in
Section 9(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if
any, in respect of such other Lender's Loans or the Reimbursement
Obligations owing to it, or interest thereon, such benefitted
Lender shall purchase for cash from the other Lenders a partici-
pating interest (or, at the option of such benefitted Lender, a
direct interest) in such portion of each such other Lender's Loan
or the Reimbursement Obligations owing to it, or shall provide
such other Lenders with the benefits of any such collateral, or
the proceeds thereof, as shall be necessary to cause such bene-
fitted Lender to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Lenders; provid-
ed, however, that if all or any portion of such excess payment or
benefits is thereafter recovered from such benefitted Lender,
such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without
interest.
(b) In addition to any rights and remedies of the
Lenders provided by law, each Lender shall have the right,
without prior notice to the Borrower, any such notice being
expressly waived by the Borrower to the extent permitted by
applicable law, upon any amount remaining unpaid (including,
without limitation, any amount owing to such Lender in respect of
an undivided participation interest purchased by such Lender in
any Swing Line Loan pursuant to subsection 2.6(d) or an undivided
interest purchased by such Lender in any draft paid by the
Issuing Lender under any Letter of Credit pursuant to subsection
3.4(a)) after it becomes due and payable by the Borrower hereun-
der (whether at the stated maturity, by acceleration or other-
wise) to set-off and appropriate and apply against such amount
any and all deposits (general or special, time or demand, provi-
sional or final), in any currency, and any other credits, indebt-
edness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any
time held or owing by such Lender or any affiliate, branch or
agency thereof to or for the credit or the account of the Borrow-
er. Each Lender agrees promptly to notify the Borrower and the
Administrative Agent after any such set-off and application made
by such Lender, provided that the failure to give such notice
shall not affect the validity of such set-off and application.
11.8 Counterparts. This Agreement may be executed by
one or more of the parties to this Agreement on any number of
separate counterparts (including by facsimile transmission), and
all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of
this Agreement signed by all the parties shall be lodged with the
Borrower and the Administrative Agent.
11.9 Severability. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remain-
ing provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
11.10 Integration. This Agreement and the other Loan
Documents and the Fee Letter represent the agreement of the
Borrower, the Administrative Agent and the Lenders with respect
to the subject matter hereof, and there are no promises, under-
takings, representations or warranties by the Administrative
Agent or any Lender relative to subject matter hereof not ex-
pressly set forth or referred to herein or in the other Loan
Documents or the Fee Letter.
11.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.
11.12 Submission To Jurisdiction; Waivers. The
Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal
action or proceeding relating to this Agreement and the
other Loan Documents to which it is a party, or for recogni-
tion and enforcement of any judgement in respect thereof, to
the non-exclusive general jurisdiction of the courts of the
State of New York, the courts of the United States of Ameri-
ca for the Southern District of New York, and appellate
courts from any thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may
now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or proceed-
ing was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action
or proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar
form of mail), postage prepaid, to the Borrower at its
address set forth in subsection 11.2 or at such other ad-
dress of which the Administrative Agent shall have been
notified pursuant thereto;
(d) agrees that nothing herein shall affect the right
to effect service of process in any other manner permitted
by law or shall limit the right to sue in any other juris-
diction; and
(e) waives, to the maximum extent not prohibited by
law, any right it may have to claim or recover in any legal
action or proceeding referred to in this subsection any
special, exemplary, punitive or consequential damages.
11.13 Acknowledgements. The Borrower hereby acknowl-
edges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan
Documents;
(b) neither the Administrative Agent nor any Lender
has any fiduciary relationship with or duty to the Borrower
arising out of or in connection with this Agreement or any
of the other Loan Documents, and the relationship between
Administrative Agent and Lenders, on one hand, and the
Borrower, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other
Loan Documents or otherwise exists by virtue of the transac-
tions contemplated hereby among the Lenders or among the
Borrower and the Lenders.
11.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
AND FOR ANY COUNTERCLAIM THEREIN.
11.15 Confidentiality. Each Lender agrees to keep
confidential any written information (a) provided to it by or on
behalf of the Borrower or any of its Subsidiaries pursuant to or
in connection with this Agreement or (b) obtained by such Lender
based on a review of the books and records of the Borrower or any
of its Subsidiaries; provided that nothing herein shall prevent
any Lender from disclosing any such information (i) to the
Administrative Agent or any other Lender, (ii) to any Transferee
or prospective Transferee which agrees to comply with the provi-
sions of this subsection, (iii) to its employees, directors,
agents, attorneys, accountants and other professional advisors,
(iv) upon the request or demand of any Governmental Authority
having jurisdiction over such Lender or as shall be required
pursuant to any Requirement of Law, (v) in response to any order
of any court or other Governmental Authority or as may otherwise
be required pursuant to any Requirement of Law, (vi) in connec-
tion with any litigation to which such Lender is a party, (vii)
which has been publicly disclosed other than in breach of this
Agreement, or (viii) to the extent reasonably necessary, in
connection with the exercise of any remedy hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and
duly authorized officers as of the day and year first above
written.
HAYES WHEELS INTERNATIONAL, INC.
By: /s/ Daniel Sandberg
Title: Vice President
CANADIAN IMPERIAL BANK OF
COMMERCE, NEW YORK AGENCY, as
Administrative Agent
By: /s/ Brian E. O'Callahan
Title: Authorized Signatory
MERRILL LYNCH CAPITAL CORPORATION,
as Documentation Agent
By: /s/ John F. Yang
Title: Director
ACADIA PARTNERS, L.P.
By: Acadia FW Partners, L.P.,
as General Partner of Acadia
Partners, L.P.
By: Acadia MGP, Inc.,
as Managing General Partner of
the General Partner
By: /s/ Glenn R. August
Title: Vice President
BANK OF AMERICA ILLINOIS
By: /s/ W.J. Bloomenthal
Title: Senior Managing Director
BANK OF IRELAND/GRAND CAYMAN
BRANCH
By: /s/ Randolph M. Ross
Title: Vice President
THE BANK OF NEW YORK
By: /s/ William M. Barnum
Title: Vice President
THE BANK OF NOVA SCOTIA
By: /s/ F.C.H. Ashby
Title: Senior Manager Loan Oper-
ation
THE BANK OF TOKYO-MITSUBISHI, LTD.
By: /s/ Noboru Kobayashi
Title: Deputy General Manager
BANQUE PARIBAS
By: /s/ Nicholas C. Mast
Title: Vice President
By: /s/ Karen E. Coons
Title: Vice President
BHF-BANK AKTIENGESELLSCHAFT
By: /s/ John Sykes
Title: Assistant Vice President
By: /s/ David Fraenkel
Title: Vice President
BANQUE FRANCAISE DU COMMERCE
EXTERIEUR
By: /s/ Brian J. Cumberland
Title: Assistant Treasurer
By: /s/ Frederick K. Kammler
Title: Vice President
CANADIAN IMPERIAL BANK OF
COMMERCE, NEW YORK AGENCY
By: /s/ Marybeth Ross
Title: Authorized Signatory
CIBC INC.
By: /s/ Kent S. Davis
Title: Director
CHL HIGH YIELD LOAN PORTFOLIO,
a unit of Chemical Bank
By: /s/ Richard W. Stewart
Title: Vice President
CITICORP USA, INC
By: /s/ Charles Foster
Title: Vice President
COMERICA BANK
By: /s/ Mark B. Grover
Title: Vice President
COMMERZBANK AKTIENGESELLSCHAFT,
GRAND CAYMAN BRANCH
By: /s/ Mark Monson
Title: Vice President
By: /s/ William J. Binder
Title: Assistant Vice President
CREDIT LYONNAIS CHICAGO BRANCH
By: /s/ Michel Buysschaert
Title: Vice President
DRESDNER BANK AG,
NEW YORK AND GRAND CAYMAN
BRANCHES
By: /s/ T.J. Nadramia
Title: Vice President
By: /s/ John W. Sweeney
Title: Assistant Vice President
FIRST AMERICAN NATIONAL BANK
By: /s/ Andrew S. Zimberg
Title: Vice President
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ Gregory R.D. Clark
Title: Director
FLEET NATIONAL BANK
By: /s/ Guy G. Smith
Title: Senior Vice President
ING CAPITAL ADVISORS, INC.
By: /s/ Kathleen A. Lenarcic
Title: Vice President & Portfo-
lio Manager
KREDIETBANK N.V.
By: /s/ John E. Thierfelder
Title: Vice President
By: /s/ R. Snauffer
Title: Vice President
MCDONNELL DOUGLAS FINANCE
CORPORATION
By: /s/ Daniel O. Anderson
Title: VP Operations
MELLON BANK, N.A.
By: /s/ Mark F. Johnston
Title: Assistant Vice President
MERRILL LYNCH CAPITAL CORPORATION
By: /s/ John F. Yang
Title: Director
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By: /s/ Patricia Loret de Mola
Title: Senior Vice President
MITSUI LEASING (U.S.A) INC.
By: /s/ Jerry Parisi
Title: Senior Vice President
NBD BANK
By: /s/ Kelly T. Cotton
Title: First Vice President
NEW YORK LIFE INSURANCE AND
ANNUITY CORPORATION
By: /s/ Adam G. Clemens
Title: Investment Vice President
NEW YORK LIFE INSURANCE COMPANY
By: /s/ Adam G. Clemens
Title: Investment Vice President
PILGRIM AMERICA PRIME RATE TRUST
By: /s/ Michael J. Basevich
Title: Vice President
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Mark J. Williams
Title: Vice President
PRIME INCOME TRUST
By: /s/ Rafael Scolari
Title: Vice President
PROTECTIVE LIFE INSURANCE COMPANY
By: /s/ Dondero
Title: Vice President
SUNAMERICA INC.
By: /s/ Lynn A. Hopton
Title: Vice President
CRESCENT/MACH I PARTNERS, L.P.
by: TCW Asset Management Company,
Its
Investment Manager
By: /s/ Justin L. Driscoll
Title: Vice President
TCW ASSET MANAGEMENT COMPANY as
Attorney-in-Fact for
Pennsylvania Life Company
By: /s/ Justin L. Driscoll
Title: Vice President
THE TRAVELERS INSURANCE COMPANY
By: /s/ Allen R. Cantrell
Title: Investment Officer
USL CAPITAL CORPORATION
By: /s/ Craig F. Bruzzone
Title: Vice President
VAN KAMPEN AMERICAN CAPITAL
PRIME RATE INCOME TRUST
By: /s/ Kathleen A. Zarn
Title: Vice President
Schedule A
to Credit Agreement
Commitments and Addresses
ACADIA PARTNERS, L.P.
Revolving Credit Commitment: $ 0
Tranche A Term Loan Commitment: $ 0
Tranche B Term Loan Commitment: $ 9,444,444.44
Tranche C Term Loan Commitment: $ 7,555,556.56
Address for Notices:
c/o Oak Hill Partners, Inc.
65 East 55th Street
32nd Floor
New York, NY 10022
Attention: Scott Krase
Telecopy: (212) 593-3596
BANK OF AMERICA ILLINOIS
Revolving Credit Commitment: $11,523,809.52
Tranche A Term Loan Commitment: $10,476,190.48
Tranche B Term Loan Commitment: $0
Tranche C Term Loan Commitment: $0
Address for Notices:
231 South LaSalle Street
Suite 7Q
Chicago, IL 60697
Attention: Francis J. Griffin
Telecopy: (312) 828-7448
BANK OF IRELAND/GRAND CAYMAN BRANCH
Revolving Credit Commitment: $6,285,714.29
Tranche A Term Loan Commitment: $5,714,285.71
Tranche B Term Loan Commitment: $0
Tranche C Term Loan Commitment: $0
Address for Notices:
640 Fifth Avenue
New York, NY 10019
Attention: Randolph M. Ross
Telecopy: (212) 586-7752
THE BANK OF NEW YORK
Revolving Credit Commitment: $6,285,714.29
Tranche A Term Loan Commitment: $5,714,285.71
Tranche B Term Loan Commitment: $0
Tranche C Term Loan Commitment: $0
Address for Notices:
One Wall Street
22nd Floor
New York, NY 10286
Attention: William M. Barnum
Telecopy: (212) 635-6434
THE BANK OF NOVA SCOTIA
Revolving Credit Commitment: $11,523,809.52
Tranche A Term Loan Commitment: $10,476,190.48
Tranche B Term Loan Commitment: $0
Tranche C Term Loan Commitment: $0
Address for Notices:
Bank of Nova Scotia
181 West Madison
Suite 3700
Chicago, IL 60602
Attention: David Scott
Telecopy: (312) 201-4108
THE BANK OF TOKYO-MITSUBISHI, LTD.
Revolving Credit Commitment: $6,285,714.29
Tranche A Term Loan Commitment: $5,714,285.71
Tranche B Term Loan Commitment: $0
Tranche C Term Loan Commitment: $0
Address for Notices:
227 West Monroe Street
Suite 2300
Chicago, IL 60606
Attention: Michael Kempel
Telecopy: (312) 396-4535
BANQUE PARIBAS
Revolving Credit Commitment: $6,285,714.29
Tranche A Term Loan Commitment: $5,714,285.71
Tranche B Term Loan Commitment: $0
Tranche C Term Loan Commitment: $0
Address for Notices:
227 West Monroe Street
Suite 3300
Chicago, IL 60606
Attention: Nicholas C. Mast
Telecopy: (312) 853-6020
BHF-BANK AKTIENGESELLSCHAFT
Revolving Credit Commitment: $11,523,809.52
Tranche A Term Loan Commitment: $10,476,190.48
Tranche B Term Loan Commitment: $0
Tranche C Term Loan Commitment: $0
Address for Notices:
590 Madison Avenue
New York, NY 10022
Attention: Paul Travers
Telecopy: (212) 756-5536
BANQUE FRANCAISE DU COMMERCE EXTERIEUR
Revolving Credit Commitment: $6,285,714.29
Tranche A Term Loan Commitment: $5,714,285.71
Tranche B Term Loan Commitment: $0
Tranche C Term Loan Commitment: $0
Address for Notices:
645 Fifth Avenue
New York, NY 10022
Attention: Rick Kammler
Telecopy: (212) 872-5045
CANADIAN IMPERIAL BANK OF COMMERCE,
NEW YORK AGENCY
Revolving Credit Commitment: $0
Tranche A Term Loan Commitment: $0
Tranche B Term Loan Commitment: $4,7222,222.22
Tranche C Term Loan Commitment: $3,777,777.78
Address for Notices:
425 Lexington Avenue
7th Floor
New York, NY 10017
CIBC INC.
Revolving Credit Commitment: $18,333,333.32
Tranche A Term Loan Commitment: $16,666,666.68
Tranche B Term Loan Commitment: $11,388,888.91
Tranche C Term Loan Commitment: $9,111,111,09
Address for Notices:
425 Lexington Avenue
7th Floor
New York, NY 10017
Attention: Brian O'Callahan
Telecopy: (212) 856-3763
CHL HIGH YIELD LOAN PORTFOLIO, a unit of Chemical Bank
Revolving Credit Commitment: $0
Tranche A Term Loan Commitment: $0
Tranche B Term Loan Commitment: $9,444,444.44
Tranche C Term Loan Commitment: $7,555,555.56
Address for Notices:
380 Madison Avenue
12th Floor
New York, NY 10017
Attention: Richard W. Stewart
Telecopy: (212) 622-3797
CITICORP USA, INC.
Revolving Credit Commitment: $11,523,809.52
Tranche A Term Loan Commitment: $10,476,190.48
Tranche B Term Loan Commitment: $0
Tranche C Term Loan Commitment: $0
Address for Notices:
399 Park Avenue
6th Floor/Zone 4
New York, NY 10043
Attention: Charles Foster
Telecopy: (212) 758-6278
COMERICA BANK
Revolving Credit Commitment: $11,523,809.52
Tranche A Term Loan Commitment: $10,476,190.48
Tranche B Term Loan Commitment: $0
Tranche C Term Loan Commitment: $0
Address for Notices:
500 Woodward Avenue
Detroit, MI 48226-3265
Attention: Mark B. Grover
Telecopy: (313) 222-3776
COMMERZBANK AKTIENGESELLSCHAFT, GRAND CAYMAN BRANCH
Revolving Credit Commitment: $6,285,714.29
Tranche A Term Loan Commitment: $5,714,285.71
Tranche B Term Loan Commitment: $0
Tranche C Term Loan Commitment: $0
Address for Notices:
311 South Wacker Drive
Suite 5800
Chicago, IL 60606
Attention: William Binder
Telecopy: (312) 435-1486
CREDIT LYONNAIS CHICAGO BRANCH
Revolving Credit Commitment: $11,523,809.52
Tranche A Term Loan Commitment: $10,476,190.48
Tranche B Term Loan Commitment: $0
Tranche C Term Loan Commitment: $0
Address for Notices:
227 West Monroe Street
Suite 3800
Chicago, IL 60606
Attention: Joce Cote
Telecopy: (312) 641-0527
with a copy to:
Credit Lyonnais Leveraged Finance
1301 Avenue of the Americas
New York, NY 10019
Attention: Robert Dial
Telecopy: (212) 459-3176
DRESDNER BANK AG, NEW YORK AND GRAND CAYMAN BRANCHES
Revolving Credit Commitment: $11,523,809.52
Tranche A Term Loan Commitment: $10,476,190.48
Tranche B Term Loan Commitment: $0
Tranche C Term Loan Commitment: $0
Address for Notices:
190 South LaSalle Street
Suite 2700
Chicago, IL 60603
Attention: Brian J. Brodeur
Telecopy: (312) 444-1305
FIRST AMERICAN NATIONAL BANK
Revolving Credit Commitment: $6,285,714.29
Tranche A Term Loan Commitment: $5,714,285.71
Tranche B Term Loan Commitment: $0
Tranche C Term Loan Commitment: $0
Address for Notices:
National Accounting Division
First American Center
Fourth & Union Street, NA-0310
Nashville, TN 37237
Attention: Andrew Zimberg
Telecopy: (615) 748-6072
THE FIRST NATIONAL BANK OF BOSTON
Revolving Credit Commitment: $6,285,714.29
Tranche A Term Loan Commitment: $5,714,285.71
Tranche B Term Loan Commitment: $0
Tranche C Term Loan Commitment: $0
Address for Notices:
100 Federal Street
Boston, MA 02110
Attention: Clifford Gaysunas
Telecopy: (617) 434-4929
FLEET NATIONAL BANK
Revolving Credit Commitment: $9,166,666.67
Tranche A Term Loan Commitment: $8,333,333.33
Tranche B Term Loan Commitment: $0
Tranche C Term Loan Commitment: $0
Address for Notices:
Mail Stop MABOFO4P
75 State Street
Boston, MA 02109
Attention: Linda Copoulos
Telecopy: (617) 346-1569
ING CAPITAL ADVISORS, INC.
Revolving Credit Commitment: $0
Tranche A Term Loan Commitment: $0
Tranche B Term Loan Commitment: $5,555,555.56
Tranche C Term Loan Commitment: $4,444,444.44
Address for Notices:
333 South Grand Avenue
Suite 400
Los Angeles, CA 90071
Attention: Kathleen Lenarcic
Telecopy: (213) 626-6552
KREDIETBANK N.V.
Revolving Credit Commitment: $6,285,714.29
Tranche A Term Loan Commitment: $5,714,285.71
Tranche B Term Loan Commitment: $0
Tranche C Term Loan Commitment: $0
Address for Notices:
125 West 55th Street
New York, NY 10019
Attention: John Thierfelder
Telecopy: (212) 956-5580
MCDONNELL DOUGLAS FINANCE CORPORATION
Revolving Credit Commitment: $0
Tranche A Term Loan Commitment: $0
Tranche B Term Loan Commitment: $1,666,666.67
Tranche C Term Loan Commitment: $1,333,333.33
Address for Notices:
4060 Lakewood Blvd.
6th Floor
Long Beach, CA 90808
Attention: Vice President
Commercial Equipment Leasing
Telecopy: (310) 627-3002
MELLON BANK, N.A.
Revolving Credit Commitment: $6,285,714.29
Tranche A Term Loan Commitment: $5,714,285.71
Tranche B Term Loan Commitment: $0
Tranche C Term Loan Commitment: $0
Address for Notices:
One Mellon Bank Center
Room 4530
Pittsburgh, PA 15258-0001
Attention: Mark F. Johnston
Telecopy: (412) 236-1914
MERRILL LYNCH CAPITAL CORPORATION
Revolving Credit Commitment: $15,714,285.70
Tranche A Term Loan Commitment: $14,285,714.30
Tranche B Term Loan Commitment: $16,111,111.11
Tranche C Term Loan Commitment: $12,888,888,89
Address for Notices:
World Financial Center North Tower
New York, NY 10281
Attention: John F. Yang
Telecopy: (212) 449-8230
THE MITSUBISHI TRUST AND BANKING CORPORATION
Revolving Credit Commitment: $9,166,666.67
Tranche A Term Loan Commitment: $8,333,333.33
Tranche B Term Loan Commitment: $0
Tranche C Term Loan Commitment: $0
Address for Notices:
520 Madison Avenue
New York, NY 10022
Attention: Beatrice Kossodo
Telecopy: (212) 644-6825
MITSUI LEASING (U.S.A.) INC.
Revolving Credit Commitment: $6,285,714.29
Tranche A Term Loan Commitment: $5,714,285.71
Tranche B Term Loan Commitment: $0
Tranche C Term Loan Commitment: $0
Address for Notices:
200 Park Avenue
Suite 3214
New York, NY 10166
Attention: Jerry Parisi
Telecopy: (212) 490-1684
NBD BANK
Revolving Credit Commitment: $11,523,809.52
Tranche A Term Loan Commitment: $10,476,190.48
Tranche B Term Loan Commitment: $0
Tranche C Term Loan Commitment: $0
Address for Notices:
611 Woodward Avenue
Detroit, MI 48226
Attention: Lisa Gelardi/Bill Maxbauer
Large Corporate Banking
Telecopy: (313) 225-2290
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION
Revolving Credit Commitment: $0
Tranche A Term Loan Commitment: $0
Tranche B Term Loan Commitment: $3,333,333.33
Tranche C Term Loan Commitment: $2,666,666.67
Address for Notices:
51 Madison Avenue
Room 206
New York, NY 10010
Attention: Investment Department
Telecopy: (212) 447-4122
NEW YORK LIFE INSURANCE COMPANY
Revolving Credit Commitment: $0
Tranche A Term Loan Commitment: $0
Tranche B Term Loan Commitment: $3,333,333.33
Tranche C Term Loan Commitment: $2,666,666.67
Address for Notices:
51 Madison Avenue
Room 206
New York, NY 10010
Attention: Investment Department
Telecopy: (212) 447-4122
PILGRIM AMERICA PRIME RATE TRUST
Revolving Credit Commitment: $0
Tranche A Term Loan Commitment: $0
Tranche B Term Loan Commitment: $9,444,444.44
Tranche C Term Loan Commitment: $7,555,555.56
Address for Notices:
Two Renaissance Square
40 North Central Avenue
Suite 1200
Phoenix, AZ 85004-3444
Attention: Michael Bacevich
Telecopy: (602) 417-8321
PNC BANK, NATIONAL ASSOCIATION
Revolving Credit Commitment: $6,285,714.29
Tranche A Term Loan Commitment: $5,714,285.71
Tranche B Term Loan Commitment: $0
Tranche C Term Loan Commitment: $0
Address for Notices:
345 Park Avenue
29th Floor
New York, NY 10154
Attention: M. Williams/T. Colwell
Telecopy: (212) 409-3737
PRIME INCOME TRUST
Revolving Credit Commitment: $0
Tranche A Term Loan Commitment: $0
Tranche B Term Loan Commitment: $9,444,444.44
Tranche C Term Loan Commitment: $7,555,555.56
Address for Notices:
Two World Trade Center
72nd Floor
New York, NY 10048
Attention: Rafael Scolari
Telecopy: (212) 392-5345
PROTECTIVE LIFE INSURANCE COMPANY
Revolving Credit Commitment: $0
Tranche A Term Loan Commitment: $0
Tranche B Term Loan Commitment: $9,444,444.44
Tranche C Term Loan Commitment: $7,555,555.56
Address for Notices:
1150 Two Galleria Tower
13455 Noel Road LB #45
Dallas, TX 75240
Attention: Mark Okada
Telecopy: (213) 233-4343
SUNAMERICA INC.
Revolving Credit Commitment: $0
Tranche A Term Loan Commitment: $0
Tranche B Term Loan Commitment: $5,555,555.56
Tranche C Term Loan Commitment: $4,444,444.44
Address for Notices:
1 SunAmerica Center
38th Floor
Los Angeles, CA 90067
Attention: Sabur Moini
Telecopy: (310) 772-6078
TCW ASSET MANAGEMENT COMPANY
CRESCENT/MACH I PARTNERS, L.P.
Revolving Credit Commitment: $0
Tranche A Term Loan Commitment: $0
Tranche B Term Loan Commitment: $3,333,333.33
Tranche C Term Loan Commitment: $2,666,666.67
Address for Notices:
200 Park Avenue
Suite 2200
New York, NY 10166-0228
Attention: Mark L. Gold/Justin Driscoll
Telecopy: (212) 297-4159
TCW ASSET MANAGEMENT COMPANY
PENNSYLVANIA LIFE INSURANCE COMPANY
Revolving Credit Commitment: $0
Tranche A Term Loan Commitment: $0
Tranche B Term Loan Commitment: $2,222,222.22
Tranche C Term Loan Commitment: $1,777,777.78
Address for Notices:
200 Park Avenue
Suite 2200
New York, NY 10166-0228
Attention: Mark L. Gold/Justin Driscoll
Telecopy: (212) 297-4159
THE TRAVELERS INSURANCE COMPANY
Revolving Credit Commitment: $0
Tranche A Term Loan Commitment: $0
Tranche B Term Loan Commitment: $5,555,555.56
Tranche C Term Loan Commitment: $4,444,444.44
Address for Notice:
One Tower Square
Suite 9PB
Hartford, CT 06183
Attention: Allen Cantrell
Telecopy: (860) 954-5243
USL CAPITAL CORPORATION
Revolving Credit Commitment: $0
Tranche A Term Loan Commitment: $0
Tranche B Term Loan Commitment: $5,555,555.56
Tranche C Term Loan Commitment: $4,444,444.44
Address for Notices:
c/o Municipal and Corporate Financing
733 Front Street
San Francisco, CA 94111
Attention: Craig F. Bruzzone
Telecopy: (415) 627-4405
VAN KAMPEN AMERICAN CAPITAL PRIME RATE INCOME TRUST
Revolving Credit Commitment: $0
Tranche A Term Loan Commitment: $0
Tranche B Term Loan Commitment: $9,444,444.44
Tranche C Term Loan Commitment: $7,555,555.56
Address for Notices:
One Parkview Plaza
Oakbrook Terrace, IL 60181
Attention: Jeffrey Maillet
Telecopy: (708) 684-6740/6741
Schedule B
to Credit Agreement
Applicable Margin Calculation for Revolving
Credit Loans and Tranche A Term Loans
Leverage Ratio ABR Loans Eurodollar Loans
Applicable Margin Applicable Margin
Greater than or 1.50% 2.50%
equal to 4.00 to
1.00
Less than 4.00 to 1.25% 2.25%
1.00 but greater
than or equal to
3.75 to 1.00
Less than 3.75 to 1.00% 2.00%
1.00 but greater
than or equal to
3.50 to 1.00
Less than 3.50 to 0.75% 1.75%
1.00 but greater
than or equal to
3.25 to 1.00
Less than 3.25 to 0.50% 1.50%
1.00 but greater
than or equal to
3.00 to 1.00 0.25% 1.25%
Less than 3.00 to
1.00 but greater 0.00% 1.00%
than or equal to
2.75 to 1.00
Less than 2.75 to
1.00
Schedule C
to Credit Agreement
Transaction Documents
1. The Stock Option Agreement, dated as of March 28, 1996 by
and among Varity Corporation, a Delaware corporation
("Varity"), K-H Corporation, a Delaware corporation ("K-H"),
and Holdings, pursuant to which, among other things, Varity
and K-H have agreed to grant to Holdings an option to pur-
chase their shares of common stock of the Borrower.
2. The Registration Rights Agreement, dated as of March 28,
1996, among the Borrower, Varity and K-H, pursuant to which,
among other things, the Borrower, Varity and K-H have agreed
as to certain matters with respect to the shares of New
Common Stock held by Varity and K-H.
3. The Stockholders' Agreement to be dated as of the Closing
Date among the Borrower and each of the New Borrower Inves-
tors, pursuant to which, among other things, the Borrower
and each of the New Borrower Investors will agree as to
certain matters with respect to the shares of New Common
Stock held by each of the New Borrower Investors.
4. The Certificate of Designations of the Borrower Preferred
Stock.
5. The Warrant Agreement to be dated as of the Closing Date
between the Borrower and the warrant agent party thereto,
pursuant to which, among other things, the Borrower will
issue the Borrower Warrants.
6. The supplemental indentures to be dated as of June 20 and
June 26 with respect to the indenture governing the Borrower
Notes pursuant to which, among other things, the indenture
governing the Borrower Notes will be amended to eliminate
substantially all negative covenants contained therein.
7. The notice of redemption to be dated the Closing Date for
the Motor Wheel Notes, pursuant to which, among other
things, the Motor Wheel Notes will be called for redemption
within 60 days of the Closing Date.
CONTACT: D.N. (Skip) Vermilya
Hayes Wheels International, Inc.
(313) 942-8135
HAYES WHEELS, MOTOR WHEEL COMPLETE MERGER VALUED AT $1.1 BILLION
ROMULUS, MI, JULY 2, 1996
Hayes Wheels International, Inc. (NASDAQ: HAYS) announced today
that it has completed its previously announced merger with MWC
Holdings, Inc., the parent of Motor Wheel Corporation. As a
result of the merger, Okemos, MI based Motor Wheel has become a
wholly-owned subsidiary of Hayes Wheels.
"This is a special day for all of our stockholders and employees,"
stated Ron Cucuz, chairman and chief executive officer of Hayes
Wheels. "We are now a $1 billion company with market leadership
in each market we serve. We have a strong book of business ahead
of us and expect significant growth. All of this combined with
the expected synergies we gain by combining these two companies is
projected to result in continued strong growth. We look forward
to expanding our position as a leading, global supplier of wheel
and brake products, and we appreciate the patience and support
everyone has displayed throughout this process."
The $1 billion transaction was financed in part through senior
secured credit facilities totalling $645 million lead by Canadian
Imperial Bank of Commerce and Merrill Lynch Capital Corporation.
Approximately $425 million was drawn at closing. In addition,
Hayes Wheels issued $250 million of 11% senior subordinated notes
due 2006 through CIBC Wood Gundy Securities Corp., Merrill Lynch &
Co. and Salomon Brothers Inc.
In connection with the transaction, an investor group led by New
York based investment firm Joseph Littlejohn & Levy contributed
$200 million of new common equity into Hayes Wheels. After the
transaction, JLL will be the largest shareholder in Hayes Wheels
with a 43% equity stake in the Company.
Hayes Wheels International is a world leader in the design, engi-
neering and manufacture of steel and aluminum wheels and brake
drums and rotors for the automotive and commercial highway markets
in North America, Europe and Asia.
