<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 30, 1997
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HAYES WHEELS INTERNATIONAL, INC.
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Delaware 1-11592 13-3384636
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification Number)
38481 Huron River Drive, Romulus, Michigan 48174
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(Address of principal executive offices) (Zip Code)
Registrant's Telephone number, including area code (313) 941-2000
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THE ACQUISITION
On June 30, 1997, Hayes Wheels International, Inc. (the "Company")
consummated its previously announced acquisition (the "Lemmerz Acquisition") of
Lemmerz Holding GmbH, a limited liability company organized under the laws of
the Federal Republic of Germany ("Lemmerz"), pursuant to an acquisition
agreement among the Company, Cromodora S.p.A., Lemmerz and the shareholders of
Lemmerz (the "Acquisition Agreement"). Pursuant to the Acquisition Agreement,
the Company acquired the capital stock of Lemmerz for (i) $200 million in cash
and (ii) 5 million shares of Series A Convertible Participating Preferred Stock
of the Company, which following stockholder approval, will automatically
convert into five million shares of the Company's Common Stock. The cash
portion of the consideration, the refinancing of existing Lemmerz debt and the
fees and expenses of the Lemmerz Acquisition were financed with proceeds (i)
under the Company's Amended and Restated Credit Agreement dated as of June 30,
1997 among the Company, the Managing Agents (as defined therein) and the
Lenders thereto (the "Amended Credit Agreement") and (ii) from the sale of $250
million aggregate principal amount of 9 1/8% Senior Subordinated Notes of Hayes
due 2007 (the "New Notes").
Pursuant to the Acquisition Agreement, and effective upon consummation
of the Lemmerz Acquisition, the Company's Board of Directors was increased to
11 members and Horst Kukwa-Lemmerz, a shareholder and managing director of
Lemmerz, and Wienand Meilicke were elected to the Company's Board, as designees
of the Lemmerz shareholders, for terms expiring at the Company's Annual Meeting
of Stockholders in 1997 and 1999, respectively. Mr. Kukwa-Lemmerz was also
elected (i) Vice Chairman of the Company's Board of Directors, (ii) a member of
its Executive Committee and a nonvoting member of its Compensation Committee
and (iii) Chairman of the Board of the Company's subsidiary, Hayes Wheels
(Europe) Ltd.
In connection with the Acquisition Agreement, the Company entered into
consulting agreements (the "Consulting Agreements") with Mr. Kukwa-Lemmerz and
an affiliate of Mr. Kukwa-Lemmerz pursuant to which, among other things, (i)
Mr. Kukwa-Lemmerz retired from all positions held with Lemmerz and its
subsidiaries, (ii) the Company will pay to Mr. Kukwa-Lemmerz and his affiliate
an aggregate of $500,000 annually during the five-year period for which
consulting services are provided and (iii) the Company granted Mr.
Kukwa-Lemmerz and his affiliate options to purchase an aggregate of 250,000
shares of the Company's Common Stock at an exercise price of $16 per share,
which options will become exercisable at the rate of 20% annually on June 30,
1998 and each June 30th thereafter during the term of the Consulting
Agreements.
In connection with the Lemmerz Acquisition, the Company, JLL Fund II,
L.P. ("JLL"), TSG Capital Fund II, L.L.P ("TSG"), CIBC WG Argosy Merchant Fund
2, L.L.C., Nomura Holding America, Inc. and Chase Equity Associates, which
collectively owned in excess of 70% of the outstanding shares of the Company's
Common Stock prior to the Lemmerz Acquisition (together, the "Investors"), and
the shareholders of Lemmerz have entered into an amended and restated
stockholders agreement (the "Amended and Restated Stockholders Agreement")
which provides that certain of the Investors and all of the shareholders of
Lemmerz will vote their shares of Company Common Stock so that the Board of
Directors of the Company will be comprised of eleven directors, consisting of
the Chief Executive Officer of the Company (currently, Mr. Cucuz), four
designees of JLL (currently, Messrs. Clark, Joseph, Levy and Ying (see Item 5
below)), one designee of TSG (currently, Mr. Christophe), two designees of the
shareholders of Lemmerz (currently Messrs.
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Kukwa-Lemmerz and Meilicke) and three other individuals determined by the Board
(currently, Messrs. Heyer and Rodewig and one vacancy). The Amended and
Restated Stockholders Agreement also provides, among other things, for certain
transfer restrictions and registration rights for the stockholder parties
thereto.
Copies of the Acquisition Agreement and the Consulting Agreements have
been filed as exhibits to the Company's Current Report on Form 8-K dated June
6, 1997 and the Amended and Restated Stockholders Agreement and the Company's
Press Release dated June 30, 1997 relating to the consummation of the Lemmerz
Acquisition are being filed as exhibits to this Report. Each of such documents
is incorporated herein by reference. The foregoing descriptions are qualified
in their entirety by reference to such exhibits.
THE FINANCING
Amended Credit Agreement
In connection with the Lemmerz Acquisition, the Company entered into the
Amended Credit Agreement pursuant to which a syndicate of lenders has agreed to
lend to the Company up to $470.5 million in the form of a senior secured term
loan facility, such aggregate amount to be allocated among (i) a Tranche A-1
Term Loan Facility in an aggregate principal amount of up to $173.0 million
(the "Tranche A-1 Facility"), (ii) a Tranche A-2 Term Loan Facility in an
aggregate principal amount of up to $100 million (the "Tranche A-2 Facility"),
(iii) a Tranche B Term Loan Facility in an aggregate principal amount of up to
$109.0 million (the "Tranche B Facility") and (iv) a Tranche C Term Loan
Facility in an aggregate principal amount of up to $88.5 million (the "Tranche
C Facility") (collectively, the "Term Loan Facilities"), and up to $270 million
in the form of a senior secured revolving credit facility (the "Revolving
Credit Facility," and, together with the Term Loan Facilities, the "Loans").
Use of Proceeds Maturities. The Tranche A-2 Facility was made available
to the Company and its subsidiaries upon the consummation of the Lemmerz
Acquisition (the "Effective Time") to finance the repayment of certain
indebtedness. At the Effective Time, the Tranche A-1, B and C Term Loan
Facilities constituted continuations of the term loan facilities provided for
in the existing Credit Agreement. The Revolving Credit Facility was also made
available at the Effective Time (including through the making of revolving
loans and the issuance of letters of credit) for general corporate purposes of
the Company and its subsidiaries. The Term Loan Facilities have maturity
schedules as follows: (i) the Tranche A-1 and A-2 Facilities will mature on
the sixth anniversary of the Effective Time, and will amortize in quarterly
installments; (ii) the Tranche B Facility will mature on the seventh
anniversary of the Effective Time, and will amortize in quarterly installments;
and (iii) the Tranche C Facility will mature on the eighth anniversary of the
Effective Time, and will amortize in quarterly installments. The Revolving
Credit Facility will mature on the sixth anniversary of the Effective Time.
The Amended Credit Agreement requires the Company to reduce the amount
outstanding under the Revolving Credit Facility to a level to be agreed upon
during a period to be agreed upon each year.
Prepayments; Reduction of Commitments. Loans under the Term Loan
Facilities are required to be prepaid with (i) 75% of excess cash flow, (ii)
100% of the net cash proceeds of all non-
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ordinary-course asset sales or other dispositions of property by the Company
and its subsidiaries (including insurance and condemnation proceeds), subject
to limited exceptions, and (iii) 100% of the net proceeds of issuances of debt
obligations of the Company and its subsidiaries, subject to limited exceptions.
Such mandatory prepayments and commitment reductions are first allocated pro
rata among the Term Loan Facilities and second to commitments under the
Revolving Credit Facility. Within the Term Loan Facilities, such prepayments
are applied pro rata to the remaining amortization payments under each such
facility.
Voluntary prepayments are permitted, in whole or in part, at the option
of the Company, in minimum principal amounts to be agreed upon, without premium
or penalty, subject to reimbursement of the Lenders' redeployment costs in the
case of prepayment of eurocurrency borrowings ("Eurocurrency Loans") other than
on the last day of the relevant interest period. All voluntary prepayments
under the Term Loan Facilities are allocated pro rata among the Term Loan
Facilities and, within each such Term Loan Facility, applied pro rata to the
remaining amortization payment under such Term Loan Facility.
Interest. The interest rates under the Loans are, at the option of the
Company, based upon either an adjusted eurocurrency rate (the "Eurocurrency
Rate") or the rate which is equal to the highest of CIBC's prime rate, the
federal funds rate plus 1/2 of 1% and the base certificate of deposit rate
plus 1 % ("ABR") in each case plus an applicable margin based on the leverage
ratio from time to time in effect. The applicable margin for ABR Loans ranges
from 0% to 1.25%. For Revolving Credit and Tranche A-1 and A-2 Eurocurrency
Loans the applicable margin is from 0.75% to 2.25%. For Tranche B Eurocurrency
Loans the applicable margin is from 2.25% to 2.75% and for Tranche C Loans the
margin is from 2.50% to 3.00%. Following the first anniversary of the
Effective Time, the spreads above the Adjusted LIBOR and ABR set forth above
will decrease in increments to be agreed upon if the Company satisfies
performance tests to be agreed upon provided that no event of default under the
Amended Credit Agreement exists.
The Company may elect interest periods of 1, 2, 3 or 6 months for
Eurocurrency Loans. Calculation of interest is computed on the basis of actual
number of days elapsed in a year of 360 days (or 365 or 366 days, as the case
may be, in the case of ABR loans based on the Prime Rate) and interest is
payable at the end of each interest period and, in any event, at least every 3
months.
Collateral and Guarantees. The Loans are guaranteed by the Company and
all of its existing and future domestic subsidiaries. The Loans are secured by
a first priority lien in substantially all of the properties and assets of the
Company and its respective domestic subsidiaries, now owned or acquired later,
including a pledge of all of the shares of the Company's respective existing
and future domestic subsidiaries and 65% of the shares of certain of the
Company's existing and future foreign subsidiaries.
Covenants. The Amended Credit Agreement contains covenants restricting
the ability of the Company and its subsidiaries to, among others (i) declare
dividends or redeem or repurchase capital stock, (ii) prepay, redeem or
purchase debt, (iii) incur liens and engage in sale-leaseback transactions,
(iv) make loans and investments, (v) issue more debt, (vi) amend or otherwise
alter debt and other material agreements, (vii) make capital expenditures,
(viii) engage in mergers, acquisitions and asset sales, (ix) engage in
transactions with affiliates and (x) alter the business it conducts. The
Company must also make certain customary indemnifications of the Managing
Agents and their respective agents
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and will also be required to comply with financial covenants with respect to
(i) a maximum leverage ratio, (ii) a minimum interest coverage ratio and (iii)
a minimum fixed charge coverage ratio. The Company is also required to make
certain customary affirmative covenants.
Events of Default. Events of default under the Amended Credit Agreement
include but are not limited to (i) the Company's failure to pay principal or
interest when due, (ii) the Company's material breach of any covenant,
representation or warranty contained in the loan documents, (iii) customary
cross-default provisions, (iv) events of bankruptcy, insolvency or dissolution
of the Company or its subsidiaries, (v) the levy of certain judgments against
the Company, its subsidiaries or their assets, (vi) certain adverse events
under ERISA plans of the Company or its subsidiaries, (vii) the actual or
asserted invalidity of security documents or guarantees of the Company or its
subsidiaries and (viii) a change of control of the Company.
New Notes
In connection with the Lemmerz Acquisition, the Company issued the New
Notes, comprising $250 million aggregate principal amount of 9 1/8% Senior
Subordinated Notes due 2007, in a transaction which was exempt from
registration under the Securities Act of 1933 in reliance on Rule 144A and
Regulation S promulgated thereunder. The New Notes are general unsecured
obligations of the Company, subordinated in right of payment to senior
indebtedness of the Company, pari passu with an aggregate of $250 million of
the Company's 11% Senior Subordinated Indebtedness due 2006 and senior in right
of payment to any current or future subordinated indebtedness of the Company.
The New Notes are unconditionally guaranteed, on a senior subordinated basis,
as to the payment of principal, premium, if any, and interest, jointly and
severally by the Company's material domestic subsidiaries. Interest on the New
Notes is payable in arrears on January 15 and July 15 commencing January 15,
1998.
The Indenture governing the New Notes (the "New Notes Indenture")
limits, among other things: (i) the incurrence of additional domestic and
foreign indebtedness, with certain exceptions; (ii) the making of any
Restricted Payment (as defined in the New Notes Indenture); (iii) the
incurrence of other senior subordinated debt; (iv) the creation of certain
liens;(v) entering into certain transactions with affiliates; (vi) the creation
of subsidiaries; (vii) the sale of assets; (viii) the issuance of common stock
of subsidiaries; and (ix) the merger, consolidation or sale of substantially
all of the assets of the Company. The New Notes Indenture also provides that a
holder of the New Notes may, under certain circumstances, have the right to
require that the Company repurchase such holder's New Notes upon a change of
control of the Company.
The New Notes mature on July 15, 2007 and may not be redeemed prior to
July 15, 2002; provided, however, that the Company may, at any time and from
time to time prior to July 15, 2000, redeem up to 35% of the aggregate
principal amount of the New Notes at a price equal to 109.125% of the aggregate
principal amount so redeemed, plus accrued and unpaid interest to the date of
redemption, with the Net Cash Proceeds (as defined in the New Notes Indenture)
of one or more Equity Offerings (as defined in the New Notes Indenture) where
the proceeds to the Company of any such Equity Offering are at least $35.0
million, provided that at least $162.5 million aggregate principal amount of
the New Notes remain outstanding. On or after July 15, 2002, the Company may,
at its option, redeem the New Notes in whole or in part, on at least 30 days'
notice but not
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more than 60 days' notice to each holder of the New Notes, at the prices during
the twelve-month periods set forth below, together with accrued and unpaid
interest to the redemption date:
<TABLE>
<CAPTION>
Twelve-Month Period
Commencing July 15 of Percentage
--------------------- ----------
<S> <C>
2002 104.563%
2003 103.042
2004 101.521
2005 and thereafter 100.000
</TABLE>
Pursuant to an Exchange Offer Registration Rights Agreement, the
Company has agreed to use its best efforts to file and have declared effective
an Exchange Offer Registration Statement with respect to an offer to exchange
the New Notes for notes of the Company with terms substantially identical to
the New Notes. The Company is also obligated to consummate such exchange offer
on or prior to November 28, 1997.
Copies of the Amended Credit Agreement and the New Notes Indenture are
being filed as exhibits to this Report. The foregoing descriptions are
qualified in their entirety by reference to such exhibits.
Item 5. Other Events
On June 27, 1997, the Company's Board of Directors elected David Ying,
a general partner of JLL, to fill a vacancy on the Board. Mr. Ying's term
will expire at the Company's 1998 Annual Meeting of Stockholders.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statement of Business to be Acquired:
Audited Consolidated Financial Statements of Lemmerz Holding GmbH
and Subsidiaries for the Two-Year Period Ended December 31, 1996
and the notes thereto (Incorporated by reference from the
Company's Current Report on Form 8-K dated June 6, 1997).
Unaudited Interim Consolidated Financial Statements of Lemmerz
Holding GmbH and Subsidiaries for the Three-Month Period Ended
March 31, 1997 and the notes thereto (Incorporated by reference
from the Company's Current Report on Form 8-K dated June 20,
1997).
(b) Pro Forma Financial Information:
Unaudited Pro Forma Financial Statements for the Year Ended
January 31, 1997 and the notes thereto (Incorporated by reference
from the Company's Current Report on Form 8-K dated June 6,
1997).
Unaudited Pro Forma Financial Statements for the Three-Month
Period Ended April 30, 1997 and the notes thereto (Incorporated
by reference from the Company's Current Report on Form 8-K dated
June 20, 1997).
(c) Exhibits
(4.1) Indenture, dated as of June 30, 1997, among the
Company, as Issuer, certain subsidiaries of the
Company, as Guarantors, and The Bank of New
York, a New York banking corporation, as Trustee.
(4.2) Certificate of Designations of Series A Convertible
Participating Preferred Stock of the Company.
(10.1) Amended and Restated Stockholders Agreement, dated
as of June 30, 1997, among the Company, Joseph
Littlejohn & Levy Fund II, L.P., Chase Equity
Associates, CIBC WG Argosy Merchant Fund 2,
L.L.C., Nomura Holding America, Inc., TSG Capital
Fund II, L.P. and the Shareholders of Lemmerz
Holding GmbH.
(10.2) Amended and Restated Credit Agreement, dated as of
June 30, 1997, among the Company, as Borrower, the
several banks and other financial institutions from
time to time Parties thereto, as Lenders, Canadian
Imperial Bank of Commerce, as Administrative Agent
for the Lenders, Merrill Lynch Capital Corporation,
as Documentation Agent for the Lenders and Dresdner
Bank A.G., as European Swing Line Administrator.
(99) Press Release of the Company dated June 30, 1997.
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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 7, 1997 By: /s/ William D. Shovers
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William D. Shovers
Vice President - Finance
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===============================================================================
HAYES WHEELS INTERNATIONAL, INC.
THE GUARANTORS NAMED HEREIN,
and
THE BANK OF NEW YORK, as Trustee
____________________
INDENTURE
Dated as of June 30, 1997
____________________
$250,000,000
9 1/8% Senior Subordinated Notes due 2007
==============================================================================
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CROSS-REFERENCE TABLE
TIA Indenture
Section Section
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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
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N.A. means Not Applicable
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be
a part of the Indenture.
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TABLE OF CONTENTS
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ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions ............................................ 1
Section 1.02. Other Definitions ...................................... 25
Section 1.03. Incorporation by Reference
of Trust Indenture Act ................................. 26
Section 1.04. Rules of Construction .................................. 26
ARTICLE 2
THE NOTES
Section 2.01. Amount of Notes and Form and Dating .................... 27
Section 2.02. Execution and Authentication ........................... 28
Section 2.03. Registrar and Paying Agent ............................. 29
Section 2.04. Paying Agent To Hold Assets in Trust ................... 29
Section 2.05. Noteholder Lists ....................................... 30
Section 2.06. Transfer and Exchange .................................. 30
Section 2.07. Replacement Notes ...................................... 31
Section 2.08. Outstanding Notes ...................................... 31
Section 2.09. Temporary Notes ........................................ 32
Section 2.10. Cancellation ........................................... 32
Section 2.11. Defaulted Interest ..................................... 32
Section 2.12. Deposit of Moneys ...................................... 33
Section 2.13. CUSIP Number ........................................... 33
Section 2.14. Book-Entry Provisions for Global Notes ................. 33
Section 2.15. Special Transfer Provisions ............................ 36
Section 2.16. Computation of Interest ................................ 38
ARTICLE 3
REDEMPTION
Section 3.01. Notices to Trustee ..................................... 39
Section 3.02. Selection by Trustee of Notes To Be Redeemed............ 39
Section 3.03. Notice of Redemption ................................... 39
Section 3.04. Effect of Notice of Redemption ......................... 40
Section 3.05. Deposit of Redemption Price ............................ 41
Section 3.06. Notes Redeemed in Part ................................. 41
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ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes ......................................... 41
Section 4.02. SEC Reports .............................................. 42
Section 4.03. Waiver of Stay, Extension or Usury Laws .................. 43
Section 4.04. Compliance Certificate ................................... 43
Section 4.05. Payment of Taxes and Other Claims ........................ 44
Section 4.06. Maintenance of Properties and Insurance .................. 44
Section 4.07. Compliance with Laws ..................................... 45
Section 4.08. Corporate Existence ...................................... 46
Section 4.09. Maintenance of Office or Agency .......................... 46
Section 4.10. Limitation on Additional Indebtedness .................... 47
Section 4.11. Limitation on Foreign Indebtedness ....................... 48
Section 4.12. Limitation on Common Stock of Subsidiaries ............... 49
Section 4.13. Limitation on Restricted Payments ........................ 49
Section 4.14. Limitation on Other Senior Subordinated Debt.............. 51
Section 4.15. Limitation on Certain Asset Sales ........................ 51
Section 4.16. Limitation on Transactions with Affiliates ............... 54
Section 4.17. Limitations on Liens ..................................... 55
Section 4.18. Limitation on Creation of Subsidiaries ................... 56
Section 4.19. Payments for Consent ..................................... 56
ARTICLE 5
SUCCESSOR CORPORATION
Section 5.01. Limitation on Consolidation, Merger....................... 59
and Sale of Assets
Section 5.02. Successor Person Substituted ............................. 60
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default ........................................ 61
Section 6.02. Acceleration ............................................. 62
Section 6.03. Other Remedies ........................................... 63
Section 6.04. Waiver of Past Defaults and Events of Default............. 64
Section 6.05. Control by Majority ...................................... 64
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Section 6.06. Limitation on Suits ....................................... 64
Section 6.07. Rights of Holders To Receive Payment ...................... 65
Section 6.08. Collection Suit by Trustee ................................ 65
Section 6.09. Trustee May File Proofs of Claim .......................... 65
Section 6.10. Priorities ................................................ 66
Section 6.11. Undertaking for Costs ..................................... 67
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee ......................................... 67
Section 7.02. Rights of Trustee ......................................... 68
Section 7.03. Individual Rights of Trustee .............................. 69
Section 7.04. Trustee's Disclaimer ...................................... 70
Section 7.05. Notice of Default ......................................... 70
Section 7.06. Reports by Trustee to Holders ............................. 70
Section 7.07. Compensation and Indemnity ................................ 71
Section 7.08. Replacement of Trustee .................................... 72
Section 7.09. Successor Trustee by Consolidation, Merger or Conversion... 73
Section 7.10. Eligibility; Disqualification ............................. 73
Section 7.11. Preferential Collection of Claims.......................... 73
Against Company
Section 7.12. Paying Agents ............................................. 73
ARTICLE 8
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 8.01. Without Consent of Holders ................................ 74
Section 8.02. With Consent of Holders ................................... 75
Section 8.03. Compliance with Trust Indenture Act ....................... 76
Section 8.04. Revocation and Effect of Consents ......................... 76
Section 8.05. Notation on or Exchange of Notes .......................... 77
Section 8.06. Trustee To Sign Amendments, etc. .......................... 77
ARTICLE 9
DISCHARGE OF INDENTURE; DEFEASANCE
Section 9.01. Discharge of Indenture .................................... 78
Section 9.02. Legal Defeasance .......................................... 78
Section 9.03. Covenant Defeasance ....................................... 79
Section 9.04. Conditions to Defeasance or Covenant Defeasance............ 79
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Section 9.05. Deposited Money and U.S. Government Obligations
To Be Held in Trust; Other Miscellaneous Provisions..... 81
Section 9.06. Reinstatement ............................................ 82
Section 9.07. Moneys Held by Paying Agent .............................. 82
Section 9.08. Moneys Held by Trustee ................................... 83
ARTICLE 10
GUARANTEE OF NOTES
Section 10.01. Guarantee ................................................. 84
Section 10.02. Execution and Delivery of Guarantees ...................... 85
Section 10.03. Limitation of Guarantee ................................... 85
Section 10.04. Additional Guarantors ..................................... 86
Section 10.05. Release of Guarantor ...................................... 86
Section 10.06. Guarantee Obligations Subordinated to Guarantor
Senior Indebtedness...................................... 86
Section 10.07. Payment Over of Proceeds upon Dissolution, etc., of a
Guarantor................................................ 87
Section 10.08. Suspension of Guarantee Obligations When Guarantor Senior
Indebtedness in Default.................................. 89
Section 10.09. Subrogation to Rights of Holders of Guarantor Senior....... 91
Indebtedness.............................................
Section 10.10. Guarantee Subordination Provisions Solely To Define
Relative Rights.......................................... 92
Section 10.11. Application of Certain Article 11 Provisions............... 93
ARTICLE 11
SUBORDINATION OF NOTES
Section 11.01. Notes Subordinate to Senior Indebtedness .................. 93
Section 11.02. Payment Over of Proceeds upon Dissolution, etc............. 93
Section 11.03. Suspension of Payment When Senior Indebtedness
in Default............................................... 95
Section 11.04. Trustee's Relation to Senior Indebtedness ................. 97
Section 11.05. Subrogation to Rights of Holders of Senior
Indebtedness............................................. 98
Section 11.06. Provisions Solely To Define Relative Rights................ 98
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Section 11.07. Trustee To Effectuate Subordination ...................... 99
Section 11.08. No Waiver of Subordination Provisions .................... 99
Section 11.09. Notice to Trustee ........................................ 100
Section 11.10. Reliance on Judicial Order or Certificate of
Liquidating Agent....................................... 101
Section 11.11. Rights of Trustee as a Holder of Senior
Indebtedness; Preservation of Trustee's Rights.......... 102
Section 11.12. Article Applicable to Paying Agents ...................... 102
Section 11.13. No Suspension of Remedies ................................ 102
ARTICLE 12
MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls .............................. 102
Section 12.02. Notices ................................................... 102
Section 12.03. Communications by Holders with Other Holders............... 104
Section 12.04. Certificate and Opinion as to Conditions Precedent......... 104
Section 12.05. Statements Required in Certificate and Opinion............. 104
Section 12.06. When Treasury Notes Disregarded ........................... 105
Section 12.07. Rules by Trustee and Agents ............................... 105
Section 12.08. Business Days; Legal Holidays ............................. 105
Section 12.09. Governing Law ............................................. 106
Section 12.10. No Adverse Interpretation of Other Agreements.............. 106
Section 12.11. No Recourse Against Others ................................ 106
Section 12.12. Successors ................................................ 106
Section 12.13. Multiple Counterparts ..................................... 106
Section 12.14. Table of Contents, Headings, etc. ......................... 107
Section 12.15. Separability .............................................. 107
EXHIBITS
Exhibit A. Form of Note .............................................. A-1
Exhibit B. Form of Legend for 144A Note .............................. B-1
Exhibit C. Form of Legend for Regulation S Note ...................... C-1
Exhibit D. Form of Legend for Global Note ............................ D-1
Exhibit E. Form of Certificate for Non-QIB Transfers ................. E-1
Exhibit F. Form of Certificate for Regulation S Transfers ............ F-1
-v-
<PAGE> 8
Page
----
Exhibit G. Form of Guarantee ........................................ G-1
-vi-
<PAGE> 9
INDENTURE, dated as of June 30, 1997, among HAYES WHEELS INTERNATIONAL,
INC., a Delaware corporation, as Issuer (the "Company"), the GUARANTORS (as
hereinafter defined), and THE BANK OF NEW YORK, a New York banking corporation,
as Trustee (the "Trustee").
Each party agrees as follows for the benefit of the other parties and for
the equal and ratable benefit of the Holders of the Company's 9 1/8% Senior
Subordinated Notes due 2007 (the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.
"Acquired Indebtedness" means Indebtedness of a Person (including an
Unrestricted Subsidiary) existing at the time such Person becomes a Restricted
Subsidiary or is merged or consolidated with or into the Company or a
Restricted Subsidiary or assumed in connection with the acquisition of assets
from such Person.
"Adjusted EBITDA" means, for any Person, for any period, the EBITDA of
such Person, plus any amounts excluded from the calculation of the Consolidated
Net Income of such Person pursuant to clause (b) of the definition thereof.
"Additional Interest" means additional interest on the Notes which the
Company and the Guarantors, jointly and severally, agree to pay to the Holders
pursuant to Section 4a of the Registration Rights Agreement.
"Adjusted Net Assets" of a Guarantor at any date shall mean the lesser of
the amount by which (x) the fair value of the property of such Guarantor
exceeds the total amount of liabilities, including, without limitation,
contingent liabilities (after giving effect to all other fixed and contingent
liabilities (including, without limitation, any guarantees of Senior
Indebtedness)), but excluding liabilities under the Guarantee, of such
Guarantor at such date and (y) the present fair salable value of the assets of
such Guarantor at such date exceeds the amount that will be required to pay the
probable liability of such Guarantor on its debts (after giving effect to all
other fixed and contingent liabilities (including, without limitation, any
guarantees of Senior Indebtedness)) and after giving effect to any collection
from any Subsidiary of such
<PAGE> 10
-2-
Guarantor in respect of the obligations of such Subsidiary under the
Guarantee), excluding Indebtedness in respect of the Guarantee, as they become
absolute and matured.
"Affiliate" of any specified Person means any other Person which directly
or indirectly through one or more intermediaries controls, or is controlled by,
or is under common control with, such specified Person. For the purposes of
this definition, "control" (including, with correlative meanings, the terms
"controlling," "controlled by," and "under common control with"), as used with
respect to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities, by agreement or
otherwise.
"Agent" means any Registrar, Paying Agent, co-registrar or agent for
service of notices and demands.
"Amended Credit Agreement" means the Amended Credit Agreement, to be dated
on or about the Issue Date, among the Company, CIBC, as administrative agent,
Merrill Lynch, as documentation agent, and the lenders from time to time
parties thereto, as such agreement may be amended, modified or supplemented
from time to time or deferred, renewed, extended, refunded, refinanced,
restructured or replaced from time to time in whole or in part (whether with
the original administrative agent and lenders or other agents and lenders or
otherwise, and whether provided under the Amended Credit Agreement or other
credit agreements or otherwise).
"Argosy" means CIBC WG Argosy Merchant Fund 2, L.L.C.
"Asset Sale" means the sale, transfer or other disposition in any single
transaction or series of related transactions of (a) any Capital Stock of or
other equity interest in any Restricted Subsidiary of the Company, (b) all or
substantially all of the assets of the Company or of any Restricted Subsidiary
thereof, (c) real property or (d) all or substantially all of the assets of any
business, owned by the Company or any Restricted Subsidiary thereof, or a
division, line of business or comparable business segment of the Company or any
Restricted Subsidiary thereof; provided that Asset Sales shall not include (i)
sales, leases, conveyances, transfers or other dispositions to the Company or
to a Restricted Subsidiary or to any other Person if after giving effect to
such sale, lease, conveyance, transfer or other disposition such other Person
becomes a Restricted Subsidiary, (ii) leases, conveyances or
<PAGE> 11
-3-
other transfers by the Company or a Restricted Subsidiary of Property
to any Person as an Investment in such Person provided that the Company or such
Restricted Subsidiary receives consideration at the time of such lease,
conveyance or other transfer at least equal to the fair market value of such
Property and such Investment is included in clause (v) of the second paragraph
of Section 4.13.
"Asset Sale Proceeds" means, with respect to any Asset Sale, (i) cash
received by the Company or any Restricted Subsidiary from such Asset Sale
(including cash received as consideration for the assumption of liabilities
incurred in connection with or in anticipation of such Asset Sale), after (a)
provision for all income or other taxes measured by or resulting from such
Asset Sale, (b) payment of all brokerage commissions, underwriting and other
fees and expenses related to such Asset Sale, (c) provision for minority
interest holders in any Restricted Subsidiary as a result of such Asset Sale
and (d) deduction of appropriate amounts to be provided by the Company or a
Restricted Subsidiary as a reserve, in accordance with GAAP, against any
liabilities associated with the assets sold or disposed of in such Asset Sale
and retained by the Company or a Restricted Subsidiary after such Asset Sale,
including, without limitation, pension and other post-employment benefit
liabilities and liabilities related to environmental matters or against any
indemnification obligations associated with the assets sold or disposed of in
such Asset Sale, and (ii) promissory notes and other non-cash consideration
received by the Company or any Restricted Subsidiary from such Asset Sale or
other disposition upon the liquidation or conversion of such notes or non-cash
consideration into cash.
"Attributable Indebtedness" in respect of a Sale and Lease-Back
Transaction means, as at the time of determination, the present value of the
notes (discounted according to GAAP at the cost of indebtedness implied in the
lease) of the total obligations of the lessee for rental payments during the
remaining term of the lease included in such Sale and Lease-Back Transaction
(including any period for which such lease has been extended).
"Autokola" means Hayes-Wheels Autokola N.H. a.s.
"Available Asset Sale Proceeds" means, with respect to any Asset Sale, the
aggregate Asset Sale Proceeds from such Asset Sale that have not been applied
in accordance with clause (iii)(A), (iii)(B) or (iii)(C) of Section 4.15(a)
and which
<PAGE> 12
-4-
have not been the basis for an Excess Proceeds Offer in accordance with
clause (iii)(D) of such Section 4.15(a).
"Board of Directors" means the board of directors of the Company or a
Guarantor, as appropriate, or any committee authorized to act therefor.
"Board Resolution" means a copy of a resolution certified pursuant to an
Officers' Certificate to have been duly adopted by the Board of Directors of
the Company or a Guarantor, as appropriate, and to be in full force and effect,
and delivered to the Trustee.
"Capital Stock" means, with respect to any Person, any and all shares or
other equivalents (however designated) of capital stock, partnership interests
or any other participation, right or other interest in the nature of an equity
interest in such Person or any option, warrant or other security convertible
into any of the foregoing.
"Capitalized Lease Obligations" means Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP, and the amount of such Indebtedness
shall be the capitalized amount of such obligations determined in accordance
with GAAP.
"Cash Equivalents" means (i) direct obligations of the United States of
America or any agency thereof, or obligations guaranteed or insured by the
United States of America, provided that in each case such obligations mature
within one year from the date of acquisition thereof, (ii) certificates of
deposit maturing within one year from the date of creation thereof issued by
any U.S. national or state banking institution having capital, surplus and
undivided profits aggregating at least $500,000,000 and rated at least A-1 by
S&P and P-1 by Moody's, (iii) commercial paper with a maturity of 180 days or
less issued by a corporation (except an Affiliate of the Company) organized
under the laws of any state of the United States or the District of Columbia
and rated at least A-1 by S&P or at least P-1 by Moody's and (iv) repurchase
agreements and reverse repurchase agreements relating to marketable direct
obligations issued or unconditionally guaranteed by the United States of
America or issued by an agency thereof and backed by the full faith and credit
of the United States of America, in each case maturing within one year
from the date of acquisition; provided that the terms of such agreements comply
with the guidelines set forth in the Federal Financial Agreements of
<PAGE> 13
-5-
Depository Institutions with Securities Dealers and Others, as adopted
by the Comptroller of the Currency and (v) tax-exempt auction rate securities
and municipal preferred stock, in each case, subject to reset no more than 35
days after the date of acquisition and having a rating of at least AA by S&P or
AA by Moody's.
A "Change of Control" of the Company will be deemed to have occurred at
such time as (i) any Person (including a Person's Affiliates and associates),
other than a Permitted Holder, becomes the beneficial owner (as defined under
Rule 13d-3 or any successor rule or regulation promulgated under the Exchange
Act) of 50% or more of the total voting power of the Company's Common Stock,
(ii) any Person (including a Person's Affiliates and associates), other than a
Permitted Holder, becomes the beneficial owner of more than 30% of the total
voting power of the Company's Common Stock, and either (A) the Permitted
Holders beneficially own, in the aggregate, a lesser percentage of the total
voting power of the Common Stock of the Company than such other Person and do
not have the right or ability by voting power, contract or otherwise to elect
or designate for election a majority of the Board of Directors of the Company
or (B) JLL is the beneficial owner of less than 20% of the total voting power
of the Company's Common Stock, (iii) there shall be consummated any
consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which the Common Stock of
the Company would be converted into cash, securities or other property, other
than a merger or consolidation of the Company in which the holders of the
Common Stock of the Company outstanding immediately prior to the consolidation
or merger hold, directly or indirectly, at least a majority of the Common Stock
of the surviving corporation immediately after such 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.
"CIBC" means Canadian Imperial Bank of Commerce.
<PAGE> 14
-6-
"Common Stock" of any Person means all Capital Stock of such Person that
is generally entitled to (i) vote in the election of directors of such Person
or (ii) if such Person is not a corporation, vote or otherwise participate in
the selection of the governing body, partners, managers or others that will
control the management and policies of such Person.
"Company" means the party named as such in the first paragraph of this
Indenture until a successor replaces such party pursuant to Article 5 of this
Indenture and thereafter means the successor and any other obligor on the
Notes.
"Company Request" means any written request signed in the name of the
Company by the Chief Executive Officer, the President, any Vice President, the
Chief Financial Officer or the Treasurer and attested to by the Secretary or
any Assistant Secretary of the Company.
"Consolidated Fixed Charges" means, with respect to any Person, the sum of
a Person's (i) Consolidated Interest Expense, plus (ii) the product of (x) the
aggregate amount of all dividends paid on Disqualified Capital Stock of the
Company or on each series of preferred stock of each Subsidiary of such Person
(other than dividends paid or payable in additional shares of preferred stock
or to the Company or any of its Wholly-Owned Subsidiaries) times (y) a
fraction, the numerator of which is one and the denominator of which is one
minus the then current effective combined federal, state and local tax rate of
such Person (expressed as a decimal), in each case, for such four-quarter
period.
"Consolidated Interest Expense" means, with respect to any Person, for any
period and without duplication, the aggregate amount of interest which, in
conformity with GAAP, would be set forth opposite the caption "interest
expense" or any like caption on an income statement for such Person and its
Subsidiaries on a consolidated basis (including, but not limited to, (i)
imputed interest included in Capitalized Lease Obligations, (ii) all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing, (iii) net payments made in
connection with Interest Rate Agreements, (iv) the interest portion of any
deferred payment obligation, (v) amortization of discount or premium, if any,
and (vi) all other non-cash interest expense (other than interest amortized to
cost of sales)) plus, all net capitalized interest for such period and all
interest paid under any guarantee of Indebtedness (including a guarantee of
principal, interest or any combination thereof) of any Person,
<PAGE> 15
-7-
and minus (i) net payments received in connection with Interest Rate
Agreements and (ii) amortization of deferred financing costs and expenses.
"Consolidated Net Income" means, with respect to any Person, for any
period, the aggregate of the net income of such Person and its Subsidiaries for
such period, on a consolidated basis, determined in accordance with GAAP;
provided, however, that there shall be excluded from Consolidated Net Income
(a) the net income of any Person which under GAAP is not consolidated with the
Person in question other than the amount of dividends or distributions paid to
the Person in question or the Subsidiary, (b) the net income of any Subsidiary
of the Person in question, other than a Domestic Subsidiary, that is subject to
any restriction or limitation on the payment of dividends or the making of
other distributions (other than pursuant to the Notes or this Indenture) to the
extent of such restriction or limitation (provided that if any such restriction
or limitation by its terms takes effect upon the occurrence of a default or an
event of default, such exclusion shall become effective only upon the
occurrence and during the continuance of such default or event of default), (c)
the net income of any Person acquired in a pooling of interests transaction for
any period prior to the date of such acquisition, (d) any net gain or loss
resulting from a sale of Property by the Person in question or any of its
Subsidiaries other than in the ordinary course of business, (e) extraordinary
gains and losses, (f) non-recurring gains, non-cash non-recurring losses and
charges (including restructuring charges and costs) and, in the case of the
Company, cash restructuring charges for any period prior to July 31, 1998, (g)
any amounts received by the Company or a Restricted Subsidiary which are used
to offset Investments pursuant to the terms of clause (ii) of the definition of
"Net 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 101
Barclay Street, Floor 21 West, New York, New York 10286.
"Default" means any event that is, or with the passing of time or giving
of notice or both would be, an Event of Default.
"Depository" means, with respect to the notes issued in the form of one or
more Global Notes, The Depository Trust
<PAGE> 16
-8-
Company or another Person designated as Depository by the Company, which Person
must be a clearing agency registered under the Exchange Act.
"Designated Senior Indebtedness," as to the Company or any Guarantor, as
the case may be, means any Senior Indebtedness (a) under or in respect of the
Amended Credit Agreement, or (b) which at the time of determination exceeds
$25,000,000 in aggregate principal amount (or accreted value in the case of
Indebtedness issued at a discount) outstanding or available under a committed
facility, and (i) which is specifically designated in the instrument evidencing
such Senior Indebtedness as "Designated Senior Indebtedness" by such Person and
(ii) as to which the Trustee has been given written notice of such designation.
"Disqualified Capital Stock" means any Capital Stock of the Company or a
Restricted Subsidiary thereof which, by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable at the
option of the holder), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, in whole or in part, on or
prior to the maturity date of the Notes, for cash or securities constituting
Indebtedness. Without limitation of the foregoing, Disqualified Capital Stock
shall be deemed to include any Preferred Stock of a Restricted Subsidiary of
the Company or the Company, under which, by agreement or otherwise, such
Restricted Subsidiary or the Company is obligated to pay current dividends or
distributions in cash during the period prior to the maturity date of the
Notes; provided, however, that Preferred Stock of the Company or any Restricted
Subsidiary thereof that is issued with the benefit 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
<PAGE> 17
-9-
such period, plus (ii) the provision for taxes for such period based on
income or profits to the extent such income or profits were included in
computing Consolidated Net Income and any provision for taxes utilized in
computing net loss under clause (i) hereof, plus (iii) Consolidated Interest
Expense for such period, plus (iv) depreciation for such period, plus (v)
amortization for such period (including the amortization of deferred financing
costs and expenses), plus (vi) any other non-cash items (including minority
interests) reducing Consolidated Net Income for such period, plus (vii)
non-recurring losses and charges (including restructuring charges and costs)
whether cash or non-cash for such period to the extent not included in the
calculation of Consolidated Net Income, minus (viii) all non-cash items
increasing Consolidated Net Income for such period, all for such Person and its
Subsidiaries determined on a consolidated basis in accordance with GAAP, except
that with respect to the Company each of the foregoing items shall be
determined on a consolidated basis with respect to the Company and its
Restricted Subsidiaries only.
"Equity Offering" means an offering by the Company of shares of its common
stock (however designated and whether voting or non-voting) and any and all
rights, warrants or options to acquire such common stock.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Indenture" means the indenture, dated as of July 2, 1996, among
the Company, the Guarantors and Comerica Bank, as trustee, as such indenture
may be amended, modified or supplemented from time to time.
"Exchange Notes" has the meaning provided in the Registration Rights
Agreement.
"Existing Notes" means the 11% Senior Subordinated Notes due 2006 of the
Company.
"Fixed Charge Coverage Ratio" of any Person means, with respect to any
determination date, the ratio of (i) EBITDA for such Person's prior four full
fiscal quarters for which financial results have been reported immediately
preceding the determination date, to (ii) Consolidated Fixed Charges of such
Person.
<PAGE> 18
-10-
"Foreign EBITDA" means, for any period, the aggregate of the EBITDA of
each of the Company's Restricted Subsidiaries which are not Guarantors.
"Foreign Interest Expense" means, for any period, the aggregate of the
Consolidated Interest Expense of each of the Company's Restricted Subsidiaries
which are not Guarantors.
"GAAP" means generally accepted accounting principles consistently applied
as in effect in the United States from time to time.
"Guarantee" means the guarantee of the Obligations of the Company with
respect to the Notes by each Guarantor pursuant to the terms of Article 10
hereof.
"Guarantor" means (i) each of Hayes Wheels International-California, Inc.,
a Delaware corporation, Hayes Wheels International-Georgia, Inc., a Delaware
corporation, Hayes Wheels International-Indiana, Inc., a Delaware corporation,
Hayes Wheels International-Mexico, Inc., a Delaware corporation, Hayes Wheels
International-Michigan, Inc., a Michigan corporation, Motor Wheel Corporation,
an Ohio corporation and MWC Acquisition Sub, Inc., a Delaware corporation and
(ii) each Restricted Subsidiary of the Company that hereafter becomes a
Guarantor pursuant to Section 10.04, and "Guarantors" means such entities,
collectively.
"Guarantor Senior Indebtedness" means the principal of and premium, if
any, and interest (including, without limitation, interest accruing or that
would have accrued but for the filing of a bankruptcy, reorganization or other
insolvency proceeding whether or not such interest constitutes an allowed claim
in such proceeding) on, and any and all other fees, charges, expense
reimbursement obligations, indemnities and other amounts due pursuant to the
terms of all agreements, documents and instruments providing for, creating,
securing, guaranteeing or evidencing or otherwise entered into in connection
with, (a) Guarantor's direct incurrence of any Indebtedness or its guarantee of
all Indebtedness of the Company, in each case, owed to lenders under or in
respect of the Amended Credit Agreement, (b) all obligations of such Guarantor
with respect to any Interest Rate Agreement, (c) all obligations of such
Guarantor to reimburse any bank or other person in respect of amounts paid
under letters of credit, acceptances or other similar instruments, (d) all
other Indebtedness of such Guarantor which does not provide that it is to rank
pari passu with or subordinate to the Guarantees and (e) all deferrals, renew-
<PAGE> 19
-11-
als, extensions, refundings, refinancings and restructurings of, and
amendments, modifications and supplements to, any of the Guarantor Senior
Indebtedness described above. Notwithstanding anything to the contrary in the
foregoing, Guarantor Senior Indebtedness will not include (i) Indebtedness of
such Guarantor to any of its Subsidiaries, (ii) Indebtedness represented by the
Notes, the Existing Notes, the Guarantees and the Guarantees of the Existing
Notes, (iii) any Indebtedness which by the express terms of the agreement or
instrument creating, evidencing or governing the same is junior or subordinate
in right of payment to any item of Guarantor Senior Indebtedness, (iv) any
trade payable arising from the purchase of goods or materials or for services
obtained in the ordinary course of business or (v) Indebtedness incurred in
violation of this Indenture.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Registrar's books.
"incur" means, with respect to any Indebtedness or other obligation of any
Person, to create, issue, incur (by conversion, exchange or otherwise), assume,
guarantee or otherwise become liable in respect of such Indebtedness or other
obligation or the recording, as required pursuant to GAAP or otherwise, of any
such Indebtedness or other obligation on the balance sheet of such Person (and
"incurrence," "incurred," "incurrable," and "incurring" shall have meanings
correlative to the foregoing); provided that a change in GAAP that results in
an obligation of such Person that exists at such time becoming Indebtedness
shall not be deemed an incurrence of such Indebtedness.
"Indebtedness" means (without duplication), with respect to any Person,
any indebtedness at any time outstanding, secured or unsecured, contingent or
otherwise, which is for borrowed money (whether or not the recourse of the
lender is to the whole of the assets of such Person or only to a portion
thereof), or evidenced by bonds, notes, debentures or similar instruments or
representing the balance deferred and unpaid of the purchase price of any
Property (excluding, without limitation, any balances that constitute accounts
payable or trade payables, and other accrued liabilities arising in the
ordinary course of business) if and to the extent any of the foregoing
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
Per-
<PAGE> 20
-12-
son is subject, whether or not the obligation or obligations secured
thereby shall have been assumed, (iii) guarantees of obligations of other
Persons which would be included within this definition for such other Persons
(whether or not such items would appear upon the balance sheet of the
guarantor), (iv) all obligations for the reimbursement of any obligor on any
letter of credit, banker's acceptance or similar credit transaction, (v) in the
case of the Company, Disqualified Capital Stock and, in the case of any
Restricted Subsidiary, Preferred Stock, (vi) obligations of any such Person
under any Interest Rate Agreement (if and to the extent such Interest Rate
Agreement obligations would appear as a liability upon a balance sheet of such
Person prepared in accordance with GAAP) and (vii) Attributable Indebtedness.
The amount of Indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above and,
with respect to contingent obligations, the maximum liability upon the
occurrence of the contingency giving rise to the obligation, provided (i) that
the amount outstanding at any time of any Indebtedness issued with original
issue discount is the principal amount of such Indebtedness less the remaining
unamortized portion of the original issue discount of such Indebtedness at such
time as determined in conformity with GAAP and (ii) that Indebtedness shall not
include any liability for Federal, state, local or other taxes.
Notwithstanding any other provision of the foregoing definition, any trade
payable arising from the purchase of goods or materials or for services
obtained in the ordinary course of business shall not be deemed to be
"Indebtedness" of the Company or any Restricted Subsidiaries for purposes of
this definition. Furthermore, guarantees of (or obligations with respect to
letters of credit supporting) Indebtedness and Liens securing Indebtedness
otherwise included in the determination of such amount shall not also be
included.
"Indenture" means this Indenture as amended, restated or supplemented from
time to time.
"Initial Global Securities" means the Regulation S Global Security and the
144A Global Security, each of which contains a Securities Act Legend.
"Initial Purchasers" means CIBC Wood Gundy Securities Corp., Merrill Lynch
Pierce, Fenner & Smith Incorporated, Bear, Stearns & Co. Incorporated, Morgan
Stanley & Co. Inc. and Salomon Brothers Inc.
<PAGE> 21
-13-
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or
(7) promulgated under the Securities Act.
"Interest Payment Date" means the stated maturity of an installment of
interest on the Notes.
"Interest Rate Agreement" means, for any Person, any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement designed to protect the party indicated therein against
fluctuations in interest rates.
"Investments" means, directly or indirectly, any advance, account
receivable, loan or capital contribution to (by means of transfers of property
to others, payments for property or services for the account or use of others
or otherwise), the purchase of any stock, bonds, notes, debentures, partnership
or joint venture interests or other securities of, the acquisition, by purchase
or otherwise, of all or substantially all of the business or assets or stock or
other evidence of beneficial ownership of, any Person. Investments shall
exclude extensions of trade credit on commercially reasonable terms in
accordance with normal trade practices.
"Issue Date" means the date the Notes are first issued by the Company and
authenticated by the Trustee under this Indenture.
"JLL" means Joseph Littlejohn & Levy Fund II, L.P.
"Lemmerz" means Lemmerz Holding GmbH, a limited liability company
organized under the laws of the Federal Republic of Germany.
"Lemmerz Acquisition" means the acquisition by the Company of Lemmerz
pursuant to the purchase agreement dated June 6, 1997 among the Company,
Cromodora Wheels S.p.A., Lemmerz and the shareholders of Lemmerz.
"Lien" means, with respect to any Property of any Person, any mortgage or
deed of trust, pledge, hypothecation, deposit arrangement, security interest,
lien, charge, encumbrance, preference, priority, or other security agreement or
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
<PAGE> 22
-14-
sales, or other title retention agreement having substantially the same
economic effect as any of the foregoing).
"Maturity Date" means July 15, 2007.
"Merrill Lynch" means Merrill Lynch Capital Corporation.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Motor Wheel" means Motor Wheel Corporation, a wholly owned subsidiary of
the Company.
"Net Cash Proceeds" means (a) in the case of any sale of Capital Stock by
the Company, the aggregate net cash proceeds received by the Company, after
payment of expenses, commissions, underwriting discounts and the like incurred
in connection therewith, (b) in the case of any exchange, exercise, conversion
or surrender of outstanding securities of any kind for or into shares of
Capital Stock of the Company which is not Disqualified Capital Stock, the net
cash proceeds received from the sale of such outstanding securities so
exchanged, exercised, converted or surrendered (plus any additional amount
required to be paid in cash by the holder to the Company upon such exchange,
exercise, conversion or surrender, less any and all payments made to the
holders, e.g., on account of fractional shares and less all expenses incurred
by the Company in connection therewith) and (c) in the case of any issuance of
any Indebtedness by the Company or any Restricted Subsidiary, the aggregate net
cash proceeds received by such Person after payment of expenses, commissions,
underwriting discounts and the like incurred in connection therewith.
"Net Investment" means the excess of (i) the aggregate amount of all
Investments in Unrestricted Subsidiaries or joint ventures made by the Company
or any Restricted Subsidiary on or after the Original Issue Date (in the case
of an Investment made other than in cash, the amount shall be the fair market
value of such Investment as determined in good faith by the Board of Directors
of the Company or such Restricted Subsidiary) over (ii) the sum of (A) the
aggregate amount returned in cash on or with respect to such Investments
whether through interest payments, principal payments, dividends or other
distributions or payments and (B) the Net Cash Proceeds received by the Company
or any Restricted Subsidiary or joint ventures from the disposition of all or
any portion of such Investments (other than to a Subsidiary of the Company);
provided, however,
<PAGE> 23
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that with respect to all Investments made in any Unrestricted Subsidiary or
joint ventures the sum of clauses (A) and (B) above with respect to such
Investments shall not exceed the aggregate amount of all such Investments made
in such Unrestricted Subsidiary.
"Nomura" means Nomura Holding America, Inc.
"Non-Payment Event of Default" means any event (other than a Payment
Default) the occurrence of which entitles one or more Persons to accelerate the
maturity of any Designated Senior Indebtedness.
"Non-U.S. Person" means a Person who is not a U.S. person, as defined in
Regulation S.
"Notes" means the 9 1/8% Senior Subordinated Notes due 2007 issued by the
Company, including, without limitation, the Private Exchange Notes, if any, and
the Exchange Notes, treated as a single class of securities, as amended or
supplemented from time to time in accordance with the terms hereof, that are
issued pursuant to this Indenture.
"Obligations" means, with respect to any Indebtedness, any principal,
premium, interest, penalties, fees, indemnifications, reimbursements, damages
and other expenses payable under the documentation governing such Indebtedness.
"Offering" means the offering of the Notes as described in the Offering
Memorandum.
"Offering Memorandum" means the Offering Memorandum dated June 19, 1997
pursuant to which the Notes issued on the Issue Date were offered.
"Officer" means the Chief Executive Officer, the President, any Vice
President, the Chief Financial Officer, the Treasurer or the Secretary of the
Company or a Guarantor, or any other officer designated by the Board of
Directors, as the case may be.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by the Chief Executive Officer, the President or any Vice President, and
the Chief Financial Officer or any Treasurer of such Person that shall comply
with applicable provisions of this Indenture.
<PAGE> 24
-16-
"Opinion of Counsel" means a written opinion from legal counsel which
counsel is reasonably acceptable to the Trustee.
"Original Issue Date" means July 2, 1996.
"Original Credit Agreement" means the Credit Agreement, dated as of July
2, 1996, among the Company, CIBC, as administrative agent, Merrill Lynch, as
documentation agent, and the lenders from time to time parties thereto.
"Payment Default" means any default, whether or not any requirement for
the giving of notice, the lapse of time or both, or any other condition to such
default becoming an Event of Default has occurred, in the payment of principal
of (or premium, if any) or interest on or any other amount payable in
connection with Designated Senior Indebtedness.
"Permitted Holders" means (i) JLL or any other fund controlled by Joseph
Littlejohn & Levy, (ii) TSG, (iii) Argosy, (iv) Nomura and (v) Chase.
"Permitted Indebtedness" means:
(i) Indebtedness of the Company or any Domestic Restricted Subsidiary
arising under or in respect of the Amended Credit Agreement in an aggregate
amount (the "Permitted Credit Agreement Amount") not to exceed (A)
$740,500,000 (which gives effect to the concurrent repayment of amounts
outstanding under the Credit Agreement on the Issue Date), less (B) any
mandatory prepayments actually made thereunder (to the extent, in the case
of payments of revolving credit Indebtedness, that the corresponding
commitments have been permanently reduced) or scheduled payments actually
made thereunder, in each case, after consummation of the Lemmerz
Acquisition;
(ii) Indebtedness under the Notes and the Guarantees;
(iii) Indebtedness not covered by any other clause of this definition
which is outstanding on the Issue Date;
(iv) Indebtedness incurred to finance the working capital requirements
of the Western European operations of the Company's Restricted
Subsidiaries pursuant to commitments 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);
<PAGE> 25
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(v) Indebtedness of Autokola not to exceed $35,000,000 in principal
amount in the aggregate which is incurred after the Issue Date as a
result of it becoming a Subsidiary of the Company;
(vi) Indebtedness of the Company to any Domestic Restricted
Subsidiary which is a Wholly-Owned Subsidiary and Indebtedness of any
Restricted Subsidiary to the Company or another Restricted Subsidiary
provided that in the case of Indebtedness of a Domestic Restricted
Subsidiary such Indebtedness is owed to another Domestic Restricted
Subsidiary;
(vii) Purchase Money Indebtedness and Capitalized Lease Obligations
incurred to acquire property in the ordinary course of business which
Indebtedness and Capitalized Lease Obligations do not in the aggregate
exceed 5% of the Company's consolidated total assets as of the Company's
most recent quarterly balance sheet;
(viii) Interest Rate Agreements;
(ix) additional Indebtedness of the Company and its Restricted
Subsidiaries not to exceed $50,000,000 in aggregate principal amount
outstanding at any time;
(x) Refinancing Indebtedness;
(xi) Indebtedness incurred in accordance with Section 4.11; and
(xii) Indebtedness of the Company or its Subsidiaries which is
denominated in a currency other than U.S. dollars, provided that (a) the
U.S. dollar equivalent thereof on the date of incurrence (together with
the U.S. dollar equivalent on such date of all other Indebtedness
incurred under this clause (xii))shall not exceed $80,000,000, and (b) on
the last Business Day of each month, the sum of (1) the U.S. dollar
equivalent of all Indebtedness outstanding under this clause (xii), and
(2) the outstanding principal amount of Indebtedness under the Amended
Credit Agreement, including reimbursement obligations in respect of
letters of credit (in each case after giving effect to any currency
hedging arrangements applicable thereto to which the Company or a
Subsidiary of the Company is a party), shall not exceed the Permitted
Credit Agreement Amount.
<PAGE> 26
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"Permitted Investments" means, for any Person, Investments made on or
after the date of this Indenture consisting of:
(i) Investments by the Company, or by a Restricted Subsidiary thereof,
in the Company or a Restricted Subsidiary;
(ii) Temporary Cash Investments;
(iii) Investments by the Company, or by a Restricted Subsidiary thereof,
in a Person, if as a result of such Investment (a) such Person becomes a
Restricted Subsidiary of the Company or (b) such Person is merged,
consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Company or
a Restricted Subsidiary;
(iv) reasonable and customary loans made to employees not to exceed
$1,000,000 in the aggregate at any one time outstanding;
(v) an Investment that is made by the Company or a Restricted Subsidiary
thereof in the form of any stock, bonds, notes, debentures, partnership
or joint venture interests or other securities that are issued by a third
party to the Company or Restricted Subsidiary solely as partial
consideration for the consummation of an Asset Sale;
(vi) Investments in Unrestricted Subsidiaries and joint ventures
permitted under subclause (v) of the second paragraph of Section 4.13;
(vii) Investments received in connection with the bankruptcy or
reorganization of Persons having obligations in favor of the Company or
its Subsidiaries (which obligations were incurred in the ordinary
course), in settlement of such obligations; and
(viii) Investments paid for in Common Stock of the Company.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government (including any agency or political subdivision thereof).
<PAGE> 27
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"Physical Notes" means certificated Notes in registered form in
substantially the form set forth in Exhibit A.
"Preferred Stock" means any Capital Stock of a Person, however designated,
which entitles the holder thereof to a preference with respect to dividends,
distributions or liquidation proceeds of such Person over the holders of other
Capital Stock issued by such Person.
"Private Exchange" has the meaning set forth in the Registration Rights
Agreement.
"Private Exchange Notes" has the meaning set forth in the Registration
Rights Agreement.
"Private Placement Legend" means the legend initially set forth on the
Rule 144A Notes in the form set forth in Exhibit B.
"Property" of any Person means all types of real, personal, tangible,
intangible or mixed property owned by such Person whether or not included in
the most recent consolidated balance sheet of such Person and its Subsidiaries
under GAAP.
"Purchase Agreement" means the Purchase Agreement dated as of June 19,
1997 by and among the Company, the Guarantors and the Initial Purchasers.
"Purchase Money Indebtedness" means any Indebtedness incurred in the
ordinary course of business by a Person to finance the cost (including the cost
of construction) of an item of Property, the principal amount of which
Indebtedness does not exceed the sum of (i) 100% of such cost and (ii)
reasonable fees and expenses of such Person incurred in connection therewith.
"Qualified Institutional Buyer" or "QIB" shall have the meaning specified
in Rule 144A promulgated under the Securities Act.
"Redemption Date" when used with respect to any Note to be redeemed means
the date fixed for such redemption pursuant to this Indenture.
"Refinancing Indebtedness" means Indebtedness that refunds, refinances or
extends any Indebtedness of the Company or its Subsidiaries outstanding on the
Issue Date or other Indebtedness permitted to be incurred by the Company or its
Re-
<PAGE> 28
-20-
stricted Subsidiaries pursuant to the terms of this Indenture, but only to
the extent that (i) the Refinancing Indebtedness is subordinated to the Notes
to at least the same extent as the Indebtedness being refunded, refinanced or
extended, if at all, (ii) the Refinancing Indebtedness is scheduled to mature
either (a) no earlier than the Indebtedness being refunded, refinanced or
extended, or (b) after the maturity date of the Notes, (iii) the portion, if
any, of the Refinancing Indebtedness that is scheduled to mature on or prior to
the maturity date of the Notes has a weighted average life to maturity at the
time such Refinancing Indebtedness is incurred that is equal to or greater than
the weighted average life to maturity of the portion of the Indebtedness being
refunded, refinanced or extended that is scheduled to mature on or prior to the
maturity date of the Notes, (iv) such Refinancing Indebtedness is in an
aggregate principal amount that is equal to or less than the sum of (a) the
aggregate principal amount then outstanding under the Indebtedness being
refunded, refinanced or extended, (b) the amount of accrued and unpaid
interest, if any, and any necessary premiums (including the amount of any
premium reasonably determined by the Company or the applicable Restricted
Subsidiary as necessary to accomplish such refunding, refinancing or extension)
on such Indebtedness being refunded, refinanced or extended and (c) the amount
of customary fees, expenses and costs related to the incurrence of such
Refinancing Indebtedness, (v) such Refinancing Indebtedness is incurred by the
same Person that initially incurred the Indebtedness being refunded, refinanced
or extended, except that the Company may incur Refinancing Indebtedness to
refund, refinance or extend Indebtedness of any Wholly-Owned Subsidiary of the
Company; provided, however, that any non-Domestic Restricted Subsidiary may
incur Refinancing Indebtedness to refund, refinance or extend Indebtedness of
the Company arising under or in respect of the Amended Credit Agreement in an
aggregate amount not to exceed $20,000,000 outstanding at any time; and
provided, further, that with respect to such Refinancing Indebtedness referred
to in the previous provision, clauses (ii) and (iii) shall not apply, and (vi)
if such Indebtedness was incurred pursuant to Section 4.11(a) and does not
contain any restriction or limitation on the payment of dividends or the
making of other distributions then the Refinancing Indebtedness shall not
contain any such limitation or restriction.
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of the Issue Date among the Company, the Guarantors and the Initial
Purchasers, as amended from time to time.
<PAGE> 29
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"Regulation S" means Regulation S promulgated under the Securities Act.
"Responsible Officer" when used with respect to the Trustee, means any
officer within the corporate trust department of the Trustee (or any successor
group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Note" has the same meaning as "Restricted Security" set forth
in Rule 144(a)(3) promulgated under the Securities Act; provided, that the
Trustee shall be entitled to request and conclusively rely upon an Opinion of
Counsel with respect to whether any Note is a Restricted Note.
"Restricted Payment" means any of the following: (i) the declaration or
payment of any dividend or any other distribution or payment on Capital Stock
of the Company or any Restricted Subsidiary of the Company or any payment made
to the direct or indirect holders (in their capacities as such) of Capital
Stock of the Company or any Restricted Subsidiary of the Company (other than
(x) dividends or distributions payable solely in Capital Stock (other than
Disqualified Capital Stock) or in options, warrants or other rights to purchase
Capital Stock (other than Disqualified Capital Stock), and (y) in the case of
Restricted Subsidiaries of the Company, dividends or distributions payable to
the Company or to a Wholly-Owned Subsidiary of the Company), (ii) the purchase,
redemption or other acquisition or retirement for value of any Capital Stock of
the Company or any of its Restricted Subsidiaries (other than Capital Stock
owned by the Company or a Wholly-Owned Subsidiary of the Company, excluding
Disqualified Capital Stock), (iii) the purchase, defeasance, repurchase,
redemption or other acquisition or retirement for value, prior to any scheduled
maturity, scheduled repayment or scheduled sinking fund payment of, or the
making of any principal payment on, any Indebtedness which is subordinated in
right of payment to the Notes other than subordinated Indebtedness acquired in
anticipation of satisfying a scheduled sinking fund obligation, principal
installment 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
<PAGE> 30
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Company therein and (vi) forgiveness of any Indebtedness of an
Affiliate of the Company to the Company or a Restricted Subsidiary. For
purposes of determining the amount expended for Restricted Payments, cash
distributed or invested shall be valued at the face amount thereof and property
other than cash shall be valued at its fair market value determined in good
faith by the Board of Directors of the Company.
"Restricted Subsidiary" means a Subsidiary of the Company other than an
Unrestricted Subsidiary. The Board of Directors of the Company may designate
any Unrestricted Subsidiary or any Person that is to become a Subsidiary as a
Restricted Subsidiary if immediately after giving effect to such action (and
treating any Acquired Indebtedness as having been incurred at the time of such
action), the Company could have incurred at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) pursuant to Section 4.10.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Sale and Lease-Back Transaction" means any arrangement with any Person
providing for the leasing by the Company or any Restricted Subsidiary of the
Company of any real or tangible personal Property, which Property has been or
is to be sold or transferred by the Company or such Restricted Subsidiary to
such Person in contemplation of such leasing.
"S&P" means Standard & Poor's Corporation and its successors.
"SEC" means the United States Securities and Exchange Commission as
constituted from time to time or any successor performing substantially the
same functions.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means the principal of and premium, if any, and
interest (including, without limitation, interest accruing or that would have
accrued but for the filing of a bankruptcy, reorganization or other insolvency
proceeding whether or not such interest constitutes an allowed claim in such
proceeding) on, and any and all other fees, charges, expense reimbursement
obligations, indemnities and other amounts
<PAGE> 31
-23-
due pursuant to the terms of all agreements, documents and instruments
providing for, creating, securing, guaranteeing or evidencing or otherwise
entered into in connection with (a) all obligations, whether outstanding on the
Issue Date or thereafter incurred, of the Company owed to lenders under or in
respect of the Amended Credit Agreement, (b) all obligations of the Company
with respect to any Interest Rate Agreement, (c) all obligations of the Company
to reimburse any bank or other person in respect of amounts paid under letters
of credit, acceptances or other similar instruments, (d) all other Indebtedness
of the Company which does not provide that it is to rank pari passu with or
subordinate to the Notes and (e) all deferrals, renewals, extensions,
refundings, refinancings and restructurings of, and amendments, modifications
and supplements to, any of the Senior Indebtedness described above.
Notwithstanding anything to the contrary in the foregoing, Senior Indebtedness
will not include (i) Indebtedness of the Company to any of its Subsidiaries,
(ii) Indebtedness represented by the Notes and 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 Senior Indebtedness, (iv) any trade payable arising from
the purchase of goods or materials or for services obtained in the ordinary
course of business, or (v) Indebtedness incurred in violation of this
Indenture.
"Subsidiary" of any specified Person means any corporation, partnership,
joint venture, association or other business entity, whether now existing or
hereafter organized or acquired, (i) in the case of a corporation, of which
more than 50% of the total voting power of the Capital Stock entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, officers or trustees thereof is held by such first-named Person or
any of its Subsidiaries; or (ii) in the case of a partnership, joint venture,
association or other business entity, with respect to which such first-named
Person or any of its Subsidiaries has the power to direct or cause the
direction of the management and policies of such entity by contract or
otherwise or if in accordance with GAAP such entity is consolidated with the
first-named Person for financial statement purposes.
"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
<PAGE> 32
-24-
of the United States of America or any state thereof or the District of
Columbia, in each case having capital, surplus and undivided profits totaling
more than $500,000,000 and rated at least A by S&P and A-2 by Moody's, maturing
within 365 days of purchase; (iii) Investments in commercial paper, maturing
not more than 180 days after the date of acquisition, issued by a corporation
(other than an Affiliate of the Company) organized and in existence under the
laws of the United States of America or any foreign country recognized by the
United States of America with a rating at the time as of which any Investment
therein is made of "P-1" (or higher) according to Moody's or "A-1" (or higher)
according to S&P; (iv) in the case of any non-Domestic Restricted Subsidiary,
Investments: (a) in direct obligations of the sovereign nation (or any agency
thereof) in which such non-Domestic Restricted Subsidiary is organized and is
conducting business or in obligations fully and unconditionally guaranteed by
such sovereign nation (or any agency thereof) or (b) of the type and maturity
described in clauses (i) through (iii) above of foreign obligors, which
Investments or obligors (of the parents of such obligors) have ratings
described in such clauses or equivalent ratings from comparable foreign rating
agencies; or (v) Investments not exceeding 365 days in duration in money market
funds that invest substantially all of such funds' assets in the Investments
described in the preceding clauses (i) and (iv).
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) as in effect on the date of this Indenture (except as provided in
Section 8.03 hereof).
"Trust Officer" means any officer or assistant officer of the Trustee
assigned by the Trustee to administer trust accounts.
"Trustee" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means the
successor.
"TSG" means TSG Capital Fund II, L.P.
"Unrestricted Subsidiary" means (a) any Subsidiary of an Unrestricted
Subsidiary and (b) any Subsidiary of the 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
<PAGE> 33
-25-
prompt written notice by the Company of each resolution adopted by the Board
of Directors of the Company under this provision, together with a copy of each
such resolution adopted.
"U.S. Government Obligations" means direct non-callable obligations of, or
non-callable obligations guaranteed by, the United States of America for the
payment of which obligation or guarantee the full faith and credit of the
United States of America is pledged.
"Western Europe" means, with respect to any jurisdictional matter, any of
the twelve current member states of the European Community and Switzerland,
Norway, Sweden, Finland, Austria and the Czech Republic (and "Western European"
shall have a meaning correlative to the foregoing).
"Wholly-Owned Subsidiary" means any Restricted Subsidiary all of the
outstanding voting securities (other than directors' qualifying shares or
similar requirements of law in respect of non-Domestic Subsidiaries and other
than shares of Lemmerz representing not more than .01% of the voting securities
thereof) of which are owned, directly or indirectly, by the Company.
Section 1.02. Other Definitions.
The definitions of the following terms may be found in the sections
indicated as follows:
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 Period" .. 10.08
"Guarantor Representative ............ 10.08
"Initial Blockage Period" ............ 11.03
"Initial Guarantee Blockage Period" .. 10.08
"Legal Defeasance" ................... 9.02
"Legal Holiday" ...................... 12.08
<PAGE> 34
-26-
"Offer Period" ....................... 4.15
"Other Notes" ........................ 2.01
"Paying Agent" ....................... 2.03
"Payment Blockage Period" ............ 11.03
"Purchase Date" ...................... 4.15
"Registrar" .......................... 2.03
"Regulation S Notes .................. 2.01
"Reinvestment Date" .................. 4.15
"Representative" ..................... 11.03
"Restricted Global Notes" ............ 2.42
"Rule 144A Notes" .................... 2.01
Section 1.03. Incorporation by Reference of Trust
Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the portion of
such provision required to be incorporated herein in order for this Indenture
to be qualified under the TIA is incorporated by reference in and made a part
of this Indenture. The following TIA terms used in this Indenture have the
following meanings:
"Commission" means the SEC.
"indenture securities" means the Notes.
"indenture securityholder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor on the indenture securities" means the Company, the
Guarantors or any other obligor on the Notes or the Guarantees.
All other terms used in this Indenture that are defined by the TIA,
defined in the TIA by reference to another statute or defined by SEC rule have
the meanings therein assigned to them.
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;
<PAGE> 35
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(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular; and
(5) words used herein implying any gender shall apply to every
gender.
ARTICLE 2
THE NOTES
Section 2.01. Amount of Notes and Form and Dating.
The Trustee shall, upon receipt of a Company Request, authenticate Notes
for original issue on the Issue Date in the aggregate principal amount of
$250,000,000. Each such written order shall specify the amount of Notes to be
authenticated and the date on which the Notes are to be authenticated and the
title of the Notes of the series (which shall distinguish the Notes of the
series from Notes of any other series). All Notes issued on the Issue Date
shall be identical in all respects. The aggregate principal amount of Notes
outstanding at any time may not exceed $250,000,000 except as provided in
Section 2.08.
Upon receipt of a Company Request and an Officers' Certificate certifying
that a registration statement relating to an exchange offer specified in the
Registration Rights Agreement is effective and that, if necessary, the
conditions precedent to a Private Exchange thereunder have been met, the
Trustee shall authenticate an additional series of Notes in an aggregate
principal amount not to exceed $250,000,000 for issuance in exchange for the
Notes tendered for exchange pursuant to such exchange offer registered under
the Securities Act and, if necessary, pursuant to a Private Exchange.
Exchange Notes or Private Exchange Notes may have such distinctive series
designations and such changes in the form thereof as are specified in the
Company Request.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A which is incorporated in and made part
of this Indenture. The Notes may have notations, legends or endorsements
required by law, rule or usage. The Company may use "CUSIP" numbers in issuing
the Notes. The Company shall approve the form of the Notes.
<PAGE> 36
-28-
Without limiting the generality of the foregoing, Notes offered and sold
to Qualified Institutional Buyers in reliance on Rule 144A ("Rule 144A Notes")
shall bear the Private Placement Legend and include the form of assignment set
forth in Exhibit C-1, Notes offered and sold in offshore transactions in
reliance on Regulation S ("Regulation S Notes") shall bear the Private
Placement Legend and include the form of assignment set forth in Exhibit C-2,
and Notes offered and sold to Institutional Accredited Investors in
transactions exempt from registration under the Securities Act not made in
reliance on Rule 144A or Regulation S ("Other Notes") may be represented by the
Restricted Global Note or, if such an investor may not hold an interest in the
Restricted Global Note, a Physical Note in each case bearing the Private
Placement Legend. Each Note shall be dated the date of its authentication.
The terms and provisions contained in the Notes and the Guarantee shall
constitute, and are hereby expressly made, a part of this Indenture and, to the
extent applicable, the Company, the Subsidiary Guarantors and the Trustee, by
their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
Section 2.02. Execution and Authentication.
The Notes shall be executed on behalf of the Company by two Officers of
the Company or an Officer and an Assistant Secretary of the Company. Such
signature may be either manual or facsimile. The Company's seal shall be
impressed, affixed, imprinted or reproduced on the Notes and may be in
facsimile form.
If an Officer whose signature is on a Note no longer holds that office at
the time the Trustee authenticates the Note, the Note shall be valid
nevertheless.
A Note shall not be valid until the Trustee manually signs the certificate
of authentication on the Note. Such signature shall be conclusive evidence
that the Note has been authenticated under this Indenture.
The Trustee or an authenticating agent shall authenticate 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
<PAGE> 37
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coupons and only in denominations of $1,000 and integral multiples thereof.
The Trustee may appoint an authenticating agent reasonably acceptable to
the Company to authenticate Notes. An authenticating agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same right as an Agent to deal with the Company or
an Affiliate.
Section 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar"), an office
or agency located in the Borough of Manhattan, City of New York, State of New
York where Notes may be presented for payment ("Paying Agent") and an office or
agency where notices and demands to or upon the Company in respect of the Notes
and this Indenture may be served. The Registrar shall keep a register of the
Notes and of their transfer and exchange. The Company may have one or more
co-registrars and one or more additional paying agents. Neither the Company
nor any Affiliate may act as Paying Agent. The Company may change any Paying
Agent, Registrar or co-registrar without notice to any Noteholder.
The Company shall enter into an appropriate agency agreement with any
Registrar or Paying Agent not a party to this Indenture. The agreement shall
implement the provisions of this Indenture that relate to such Agent. The
Company shall notify the Trustee in writing of the name and address of any
such Agent. If the Company fails to maintain a Registrar or Paying Agent, or
agent for service of notices and demands, or fails to give the foregoing
notice, the Trustee shall act as such. The Company initially appoints the
Trustee as Registrar, Paying Agent and agent for service of notices and
demands in connection with the Notes.
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
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the Paying Agent shall notify the Trustee in writing of any Default by the
Company (or any other obligor on the Notes) in making any such payment.
The Company at any time may require a Paying Agent to distribute all assets
held by it to the Trustee and account for any assets disbursed and the Trustee
may at any time during the continuance of any Payment Default, upon written
request to a Paying Agent, require such Paying Agent to distribute all assets
held by it to the Trustee and to account for any assets distributed. Upon
distribution to the Trustee of all assets that shall have been delivered by the
Company to the Paying Agent, the Paying Agent shall have no further liability
for such assets.
Section 2.05. Noteholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Noteholders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Company shall furnish to the Trustee as of each
Record Date and at least seven Business Days before each related Interest
Payment Date, and at such other times as the Trustee may request in writing, a
list in such form and as of such date as the Trustee may reasonably require of
the names and addresses of Noteholders.
Section 2.06. Transfer and Exchange.
Subject to Sections 2.14 and 2.15, when a Note is presented to the
Registrar with a request to register the transfer thereof, the Registrar shall
register the transfer as requested if the requirements of applicable law are
met and, when Notes are presented to the Registrar with a request to exchange
them for an equal principal amount of Notes of other authorized denominations,
the Registrar shall make the exchange as requested provided that every Note
presented or surrendered for registration of transfer or exchange shall be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Registrar duly executed by the Holder
thereof or his attorney duly authorized in writing. To permit transfers and
exchanges, upon surrender of any Note for registration of transfer at the
office or agency maintained pursuant to Section 2.03 hereof, the Company shall
execute and the Trustee shall authenticate Notes (and the Subsidiary
Guarantors shall execute the guarantee thereon) at the Registrar's written
request. Any exchange or transfer shall be without charge, except that the
Company may require payment by the Holder of a sum sufficient to cover any tax
or other gov-
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ernmental charge that may be imposed in relation to a transfer or
exchange, but this provision shall not apply to any exchange pursuant to
Sections 2.09, 3.06 or 8.05 hereof. The Trustee shall not be required to
register transfers of Notes or to exchange Notes for a period of 15 days before
selection of any Notes to be redeemed. The Trustee shall not be required to
exchange or register transfers of any Notes called or being called for
redemption in whole or in part, except the unredeemed portion of any Note being
redeemed in part.
Any Holder of the Global Note shall, by acceptance of such Global Note,
agree that transfers of the beneficial interests in such Global Note may be
effected only through a book entry system maintained by the Holder of such
Global Note (or its agent), and that ownership of a beneficial interest in the
Global Note shall be required to be reflected in a book entry.
Each Holder of a Note agrees to indemnify the Company and the Trustee
against any liability that may result from the transfer, exchange or
assignment of such Holder's Note in violation of any provision of this
Indenture and/or applicable United States federal or state securities law.
The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Note (including any transfers between or among Depository Participants
or beneficial owners of interests in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by the terms
of, this Indenture, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.
Section 2.07. Replacement Notes.
If a mutilated Note is surrendered to the Trustee or if the Holder of a
Note presents evidence to the satisfaction of the Company and the Trustee that
the Note has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Note (and the Guarantors shall
execute a guarantee thereon) if the Trustee's requirements are met. An
indemnity bond must be supplied by such Holder that is sufficient in the
judgment of the Company and the Trustee to protect the Company, the Trustee or
any Agent from any loss which any of them may suffer if a Note is
replaced. The Company may charge such Holder for its reasonable, out-of-pocket
expenses in replacing a Note, including reasonable fees and expenses of
counsel. Every replacement Note is an additional obligation of the Company.
Section 2.08. Outstanding Notes.
Notes outstanding at any time are all Notes authenticated by the Trustee
except for those cancelled by it, those delivered to it for cancellation, and
those described in this Section 2.08 as not outstanding.
If a Note is replaced pursuant to Section 2.07 (other than a mutilated
Note surrendered for replacement), it ceases to be outstanding until the
Company and the Trustee receive proof satisfactory to each of them that the
replaced Note is held by a bona fide purchaser. A mutilated Note ceases to be
<PAGE> 40
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outstanding upon surrender of such Note and replacement thereof pursuant to
Section 2.07.
If a Paying Agent holds on a Redemption Date or Maturity Date money
sufficient to pay the principal of, premium, if any, and accrued interest on
Notes payable on that date and is not prohibited from paying such money to the
Holders thereof pursuant to the terms of this Indenture, then on and after that
date such Notes cease to be outstanding and interest on them ceases to accrue.
Subject to Section 12.06, a Note does not cease to be outstanding solely
because the Company or an Affiliate holds the Note.
Section 2.09. Temporary Notes.
Until definitive Notes are ready for delivery, the Company may prepare and
the Trustee shall, upon receipt of a Company Request, authenticate temporary
Notes. Temporary Notes shall be substantially in the form, and shall carry all
rights, of definitive Notes but may have variations that the Company considers
appropriate for temporary Notes. Without unreasonable delay, the Company shall
prepare and the Trustee shall authenticate definitive Notes in exchange for
temporary Notes presented to it.
Section 2.10. Cancellation.
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and the Paying Agent shall forward to the Trustee any Notes
surrendered to them for transfer, exchange or payment. The Trustee, or at the
direction of the Trustee, the Registrar or the Paying Agent, and no one else,
shall cancel and at the written request of the Company, shall dispose of all
Notes surrendered for transfer, exchange, payment or cancellation, provided,
however, that in no event shall the Trustee be required to destroy any such
Notes. If the Company or any Guarantor shall acquire any of the Notes, such
acquisition shall not operate as a redemption or satisfaction of the
Indebtedness represented by such Notes unless and until the same are
surrendered to the Trustee for cancellation or pursuant to this Section 2.10.
Section 2.11. Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it shall
pay the defaulted amounts, plus any inter-
<PAGE> 41
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est payable on defaulted amounts pursuant to Section 4.01 hereof, to
the persons who are Noteholders on a subsequent special record date, which date
shall be the fifteenth day next preceding the date fixed by the Company for the
payment of defaulted interest or the next succeeding Business Day if such date
is not a Business Day. At least 15 days before the special record date, the
Company shall mail or cause to be mailed to each Noteholder, with a copy to the
Trustee, a notice that states the special record date, the payment date, and
the amount of defaulted interest, and interest payable on such defaulted
interest, if any, to be paid.
Section 2.12. Deposit of Moneys.
Prior to 10:00 a.m., New York City time, on each Interest Payment Date and
on the Maturity Date, the Company shall have deposited with the Paying Agent in
immediately available funds money sufficient to make cash payments, if any, due
on such Interest Payment Date or on the Maturity Date, as the case may be, in a
timely manner which permits the Trustee to remit payment to the Holders on such
Interest Payment Date or on the Maturity Date, as the case may be.
Section 2.13. CUSIP Number.
The Company in issuing the Notes may use one or more "CUSIP" numbers, and
if so, the Trustee shall use the CUSIP number(s) in notices of redemption or
exchange as a convenience to Holders, provided that any such notice may
state that no representation is made as to the correctness or accuracy of the
CUSIP number(s) printed in the notice or on the Notes, and that reliance may be
placed only on the other identification numbers printed on the Notes.
Section 2.14. Book-Entry Provisions for Global Notes.
(a) Rule 144A Notes and Other Notes which may be held in global form,
other than Regulation S Notes, initially shall be represented by one or more
notes in registered, global form without interest coupons (collectively, the
"Restricted Global Note"). Regulation S Notes initially shall be represented
by one or more notes in registered, global form without interest coupons
(collectively, the "Regulation S Global Note," and, together with the
Restricted Global Note, the "Global Notes"). The Global Notes initially shall
(i) be registered in the name of The Depository Trust Company ("DTC") or the
nominee of DTC, in each case for credit to an account of an Agent Mem-
<PAGE> 42
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ber (as defined below) (or, in the case of the Regulation S Global
Notes, of Morgan Guaranty Trust Company, as operator of the Euroclear System
("Euroclear") and Cedel Bank, Societe Anonyme ("CEDEL")), (ii) be delivered to
the Trustee as custodian for DTC and (iii) bear legends as set forth in Exhibit
D.
Members of, or direct or indirect participants in, DTC ("Agent Members")
shall have no rights under this Indenture with respect to any Global Note held
by DTC, or the Trustee as its custodian, or under the Global Notes, and DTC may
be treated by the Company, the Trustee and any agent of the Company or the
Trustee as the absolute owner of the Global Note for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by DTC or impair,
as between DTC and its Agent Members, the operation of customary practices
governing the exercise of the rights of a Holder of any Note.
(b) Transfers of Global Notes shall be limited to transfer in whole, but
not in part, to DTC, its successors or their respective nominees. Interests of
beneficial owners in the Global Notes may be transferred or exchanged for
Physical Notes upon receipt by the Trustee of written instructions from DTC or
its nominee on behalf of any beneficial owner and in accordance with the rules
and procedures of DTC and the provisions of Section 2.15. In addition, a
Global Note shall be exchangeable for Physical Notes if (i) DTC (x) notifies
the Company that it is unwilling or unable to continue as depository for such
Global Note and the Company thereupon fails to appoint a successor depository
or (y) has ceased to be a clearing agency registered under the Exchange
Act, (ii) the Company, at its option, notifies the Trustee in writing that it
elects to cause the issuance of such Physical Notes or (iii) there shall have
occurred and be continuing a Default or an Event of Default with respect to the
Notes. In all cases, Physical Notes delivered in exchange for any Global Note
or beneficial interests therein shall be registered in the names, and issued in
any approved denominations, requested by or on behalf of DTC (in accordance
with its customary procedures).
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in any Global Note to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more Physical Notes are to be
issued) reflect on its books and records the date and a decrease in the
principal amount of the Global Note in an amount equal to the principal
<PAGE> 43
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amount of the beneficial interest in the Global Note to be transferred,
and the Company shall execute, and the Trustee shall upon receipt of a written
order from the Company authenticate and make available for delivery, one or
more Physical Notes of like tenor and amount.
(d) In connection with the transfer of Global Notes as an entirety to
beneficial owners pursuant to paragraph (b), the Global Notes shall be deemed
to be surrendered to the Trustee for cancellation, and the Company shall
execute, and the Trustee shall authenticate and deliver or make available for
delivery, to each beneficial owner identified by the Depository in writing in
exchange for its beneficial interest in the Global Notes, an equal aggregate
principal amount of Physical Notes of authorized denominations.
(e) Any Physical Note constituting a Restricted Note delivered in exchange
for an interest in a Global Note pursuant to paragraph (b) shall, except as
otherwise provided by paragraphs (a)(i)(x) and (c) of Section 2.15, bear the
Private Placement Legend or, in the case of the Regulation S Global Note, the
legend set forth in Exhibit C, in each case, unless the Company determines
otherwise in compliance with applicable law.
(f) On or prior to the 40th-day after the later of the commencement of the
offering of the Notes represented by the Regulation S Global Note and
the issue date of such Notes (such period through and including such 40th day,
the "Restricted Period"), a beneficial interest in a Regulation S Global Note
may be transferred to a Person who takes delivery in the form of an interest in
the corresponding Restricted Global Note only upon receipt by the Trustee of a
written certification from the transferor to the effect that such transfer is
being made (i)(a) to a Person whom the transferor reasonably believes is a
Qualified Institutional Buyer in a transaction meeting the requirements of Rule
144A or (b) pursuant to another exemption from the registration requirements
under the Securities Act which is accompanied by an opinion of counsel
regarding the availability of such exemption and (ii) in accordance with all
applicable securities laws of any state of the United States or any other
jurisdiction.
(g) Beneficial interests in the Restricted Global Note may be transferred
to a Person who takes delivery in the form of an interest in the Regulation S
Global Note, whether before or after the expiration of the Restricted Period,
only if the transferor first delivers to the Trustee a written cer-
<PAGE> 44
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tificate to the effect that such transfer is being made in accordance
with Rule 903 or 904 of Regulation S or Rule 144 (if available) and that, if
such transfer occurs prior to the expiration of the Restricted Period, the
interest transferred will be held immediately thereafter through Euroclear or
CEDEL.
(h) Any beneficial interest in one of the Global Notes that is transferred
to a Person who takes delivery in the form of an interest in another Global
Note shall, upon transfer, cease to be an interest in such Global Note and
become an interest in such other Global Note and, accordingly, shall thereafter
be subject to all transfer restrictions and other procedures applicable to
beneficial interests in such other Global Note for as long as it remains such
an interest.
(i) The Holder of any Global Note may grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Notes.
Section 2.15. Special Transfer Provisions.
(a) Transfers to Non-QIB Institutional Accredited Investors and Non-U.S.
Persons. The following provisions shall apply with respect to the registration
of any proposed transfer of a Note constituting a Restricted Note to any
Institutional Accredited Investor which is not a QIB or to any Non-U.S. Person:
(i) the Registrar shall register the transfer of any Note
constituting a Restricted Note, whether or not such Note bears the
Private Placement Legend, if (x) the requested transfer is after the
Issue Date plus two years or such other date as such Note shall be freely
transferable under Rule 144 as certified in an Officers' Certificate or
(y)(1) in the case of a transfer to an Institutional Accredited Investor
which is not a QIB (excluding Non-U.S. Persons), the proposed transferee
has delivered to the Registrar a certificate substantially in the form of
Exhibit E hereto or (2) in the case of a transfer to a Non-U.S. Person
(including a QIB), the proposed transferor has delivered to the Registrar
a certificate substantially in the form of Exhibit F hereto; provided
that in the case of a transfer of a Note bearing the Private Placement
Legend for a Note not bearing the Private Placement Legend, the Registrar
has received an Officers' Certificate authorizing such transfer; and
<PAGE> 45
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(ii) if the proposed transferor is an Agent Member holding a
beneficial interest in a Global Note, upon receipt by the Registrar of
(x) the certificate, if any, required by paragraph (i) above and (y)
instructions given in accordance with the Depository's and the
Registrar's procedures,
whereupon the Registrar shall reflect on its books and records the date and (if
the transfer does not involve a transfer of outstanding Physical Notes) a
decrease or increase, as the case may be, in the principal amount of a Global
Note in an amount equal to the principal amount of the beneficial interest in a
Global Note to be transferred.
(b) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed registration of transfer of a Note
constituting a Restricted Note to a QIB (excluding transfers to Non-U.S.
Persons):
(i) the Registrar shall register the transfer if such transfer is
being made by a proposed transferor who has checked the box provided for
on such Holder's Note stating, or has otherwise advised the Company and
the Registrar in writing, that the sale has been made in compliance with
the provisions of Rule 144A to a transferee who has signed the
certification provided for on such Holder's Note stating, or
has otherwise advised the Company and the Registrar in writing, that it
is purchasing the Note for its own account or an account with respect to
which it exercises sole investment discretion and that it and any such
account is a QIB within the meaning of Rule 144A, and is aware that the
sale to it is being made in reliance on Rule 144A and acknowledges that
it has received such information regarding the Company as it has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon its
foregoing representations in order to claim the exemption from
registration provided by Rule 144A; and
(ii) if the proposed transferee is an Agent Member, and the Notes to
be transferred consist of Physical Notes which after transfer are to be
evidenced by an interest in the Global Note, upon receipt by the
Registrar of instructions given in accordance with the Depository's and
the Registrar's procedures, the Registrar shall reflect on its books and
records the date and an increase in the principal amount of the Global
Note in an amount equal to the principal amount of the Physical Notes to
be transferred,
<PAGE> 46
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and the Trustee shall cancel the Physical Notes so transferred.
(c) Private Placement Legend. Upon the registration of transfer, exchange
or replacement of Notes not bearing the Private Placement Legend, the Registrar
shall deliver Notes that do not bear the Private Placement Legend. Upon the
registration of transfer, exchange or replacement of Notes bearing the Private
Placement Legend, the Registrar shall deliver only Notes that bear the Private
Placement Legend unless (i) it has received the Officers' Certificate required
by paragraph (a)(i)(y) of this Section 2.15, (ii) there is delivered to the
Registrar an Opinion of Counsel reasonably satisfactory to the Company and the
Trustee to the effect that neither such legend nor the related restrictions on
transfer are required in order to maintain compliance with the provisions of
the Securities Act or (iii) such Note has been sold pursuant to an effective
registration statement under the Securities Act and the Registrar has received
an Officers' Certificate from the Company to such effect.
(d) General. By its acceptance of any Note bearing the Private Placement
Legend, each Holder of such Note acknowledges the restrictions on transfer of
such Note set forth in this Indenture and in the Private Placement Legend and
agrees that it will transfer such Note only as provided in this Indenture.
The Registrar shall retain for a period of two years copies of all
letters, notices and other written communications received pursuant to Section
2.14 or this Section 2.15. The Company shall have the right to inspect and
make copies of all such letters, notices or other written communications at
any reasonable time upon the giving of reasonable notice to the Registrar.
Section 2.16. Computation of Interest.
Interest on the Notes shall be computed on the basis of a 360-day year of
twelve 30-day months.
<PAGE> 47
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ARTICLE 3
REDEMPTION
Section 3.01. Notices to Trustee.
If the Company elects to redeem Notes pursuant to Paragraph 5 of the
Notes, it shall notify the Trustee of the Redemption Date and the principal
amount of Notes to be redeemed at least 45 days (unless a shorter notice shall
be satisfactory to the Trustee) but not more than 30 days before the Redemption
Date. Any such notice may be cancelled at any time prior to notice of such
redemption being mailed to any Holder and shall thereby be void and of no
effect.
Section 3.02. Selection by Trustee of Notes To Be Redeemed.
If fewer than all of the Notes are to be redeemed, the Trustee shall
select the Notes to be redeemed pro rata, by lot or by any other method that
the Trustee considers fair and appropriate and, if such Notes are listed on any
securities exchange, by a method that complies with the requirements of such
exchange.
The Trustee shall make the selection from the Notes outstanding
and not previously called for redemption and shall promptly notify the Company
in writing of the Notes selected for redemption and, in the case of any Note
selected for partial redemption, the principal amount thereof to be redeemed.
Notes in denominations of $1,000 may be redeemed only in whole. The Trustee
may select for redemption portions (equal to $1,000 or integral multiples
thereof) of the principal amount of Notes that have denominations larger than
$1,000. Provisions of this Indenture that apply to Notes called for redemption
also apply to portions of Notes called for redemption.
Section 3.03. Notice of Redemption.
At least 30 days, and no more than 60 days, before a Redemption Date,
the Company shall mail, or cause to be mailed, a notice of redemption
by first-class mail to each Holder of Notes to be redeemed at his or her last
address as the same appears on the registry books maintained by the Registrar
pursuant to Section 2.03 hereof.
The notice shall identify the Notes to be redeemed (including the CUSIP
number(s) thereof) and shall state:
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(1) the Redemption Date;
(2) the redemption price;
(3) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
Redemption Date and upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion will be issued;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(6) that, unless (a) the Company defaults in making the redemption
payment or (b) such redemption payment is prohibited pursuant to Article
10 or 11 hereof or otherwise, interest on the Notes called for redemption
ceases to accrue on and after the Redemption Date, and the only remaining
right of the Holders of such Notes is to receive payment of the
redemption price upon surrender to the Paying Agent of the Notes
redeemed;
(7) the paragraph of the Notes pursuant to which the Notes called for
redemption are being redeemed; and
(8) if fewer than all the Notes are to be redeemed, the
identification of the particular Notes (or portion thereof) to be
redeemed, as well as the aggregate principal amount of Notes to be
redeemed and the aggregate principal amount of Notes to be outstanding
after such partial redemption.
At the Company's written request delivered at least 45 days prior to
the Redemption Date, the Trustee shall give the notice of redemption in the
Company's name and at the Company's sole expense; provided, however, that the
Company shall have delivered to the Trustee, at least 30 days prior to the
Redemption Date, a Company Request requesting that the Trustee give such notice
and setting forth the information to be stated in such notice as provided in
the preceding paragraph.
Section 3.04. Effect of Notice of Redemption.
Once the notice of redemption described in Section 3.03 is mailed,
Notes called for redemption become due and payable on the Redemption Date and
at the redemption price, plus interest, if any, accrued to the Redemption Date.
Upon surrender to the Trustee or Paying Agent, such Notes shall be paid at the
redemption price, plus accrued interest, if any, to the Redemption Date unless
prohibited by Article 10 or 11, provided that if the Redemption Date is after
a regular interest
<PAGE> 49
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payment record date and on or prior to the Interest Payment Date, the
accrued interest shall be payable to the Holder of the redeemed Notes
registered on the relevant record date.
Section 3.05. Deposit of Redemption Price.
On or prior to 10:00 A.M., New York City time, on each Redemption Date,
the Company shall deposit with the Paying Agent in immediately available funds
money sufficient to pay the redemption price of and accrued interest, if any,
on all Notes to be redeemed on that date other than Notes or portions thereof
called for redemption on that date which have been delivered by the Company to
the Trustee for cancellation.
On and after any Redemption Date, if money sufficient to pay the
redemption price of and accrued interest on Notes called for redemption shall
have been made available in accordance with the preceding paragraph, the Notes
called for redemption will cease to accrue interest and the only right of the
Holders of such Notes will be to receive payment of the redemption price of
and, subject to the first proviso in Section 3.04, accrued and unpaid interest
on such Notes to the Redemption Date. If any Note called for redemption shall
not be so paid, interest will be paid, from the Redemption Date until such
redemption payment is made, on the unpaid principal of the Note and any
interest not paid on such unpaid principal, in each case, at the rate and in
the manner provided in the Notes.
Section 3.06. Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, upon the Company's
written request, the Trustee shall authenticate for a Holder, at the expense of
the Company, a new Note equal in principal amount to the unredeemed portion of
the Note surrendered.
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes.
The Company shall pay the principal of and interest on the Notes on the
dates and in the manner provided in the Notes and this Indenture. An
installment of principal or interest shall be considered paid on the date it is
due if the Trustee or Paying Agent holds, as of 10:00 A.M., New York City time
on that date money designated for and sufficient to pay
<PAGE> 50
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such installment and is not prohibited from paying such money to the
Holders pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal, and overdue interest,
to the extent lawful, at the rate specified in the Notes.
Section 4.02. SEC Reports.
The Company will deliver to the Trustee within 15 days after the filing of
the same with the SEC, copies of the quarterly and annual reports and of the
information documents and other reports, if any, which the Company is required
to file with the SEC pursuant to Section 13 or 15(d) of the Securities Exchange
Act. The Company will also comply with the other provisions of TIA Section
314(a).
Notwithstanding that the Company may not be subject to the reporting
requirements of Section 13 or 15(d) of the 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. In
such event, the Company shall also, upon request, provide to any Holder of
Notes or any prospective transferee of any such Holder any information
concerning the Company (including financial statements) necessary in
order to permit such Holder to sell or transfer Notes in compliance with Rule
144A under the Securities Act; provided, however, that the Company shall not be
required to furnish such information in connection with any request made on or
after the date which is two years from the later of (i) the date such Note (or
any predecessor Note) was acquired from the Company or (ii) the date such Note
(or any predecessor Note) was last acquired from an "affiliate" of the Company
within the meaning of Rule 144 under the Securities Act.
Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Issuer's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
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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 knowledge each has kept, observed, performed and fulfilled each and
every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions hereof
(or, if a Default or Event of Default shall have occurred, describing all or
such Defaults or Events of Default of which he or she may have knowledge and
what action each is taking or proposes to take with respect thereto) and that
to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or
interest, if any, on the Notes is prohibited or if such event has occurred, a
description of the event and what action each is taking or proposes to take
with respect thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Ac-
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countants, the year-end financial statements delivered pursuant to
Section 4.02 above shall be accompanied by a written statement of the Company's
independent public accountants (who shall be a firm of established national
reputation) that in making the examination necessary for certification of such
financial statements nothing has come to their attention which would lead them
to believe that the Company has violated any provisions of this Article 4 or
Article 5 hereof of this Indenture or, if any such violation has occurred,
specifying the nature and period of existence thereof, it being understood that
such accountants shall not be liable directly or indirectly for any failure to
obtain knowledge of any such violation.
(c) (i) If any Default or Event of Default has occurred and is continuing
or (ii) if any Holder seeks to exercise any remedy hereunder with respect to a
claimed Default under this Indenture or the Notes, the Company shall deliver to
the Trustee an Officers' Certificate specifying such event, 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 withholding taxes and any penalties, interest
and additions to taxes) levied or imposed upon it or any of its Subsidiaries or
properties of it or any of its Subsidiaries and (ii) all lawful claims for
labor, materials and supplies that, if unpaid, might by law become a Lien upon
the property of it or any of its Subsidiaries; provided, however, that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim if the amount,
applicability or validity thereof is being contested in good faith by
appropriate proceedings and an adequate reserve has been established therefor
to the extent required by GAAP.
Section 4.06. Maintenance of Properties and Insurance.
(a) The Company shall cause all properties used or useful to the
conduct of its business or the business of any of its Subsidiaries to
be maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and shall cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in its
judgment may be necessary, so that the business carried
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on in connection therewith may be properly and advantageously conducted
at all times unless the failure to so maintain such properties (together with
all other such failures) would not have a material adverse effect on the
financial condition or results of operations of the Company and its
Subsidiaries, taken as a whole; provided, however, that nothing in this Section
4.06 shall prevent the Company or any Subsidiary from discontinuing the
operation or maintenance of any of such properties, or disposing of any of
them, if such discontinuance or disposal is in the good faith judgment of the
Board of Directors of the Company or the Subsidiary concerned, as the case may
be, desirable in the conduct of the business of the Company or such Subsidiary,
as the case may be, and is not disadvantageous in any material respect to the
Holders.
(b) The Company shall provide or cause to be provided, for itself and each
of its Subsidiaries, insurance (including appropriate self-insurance) against
loss or damage of the kinds that, in the reasonable, good faith opinion of the
Company are adequate and appropriate for the conduct of the business of the
Company and such Subsidiaries in a prudent manner, with reputable
insurers or with the government of the United States of America or an agency or
instrumentality thereof, in such amounts, with such deductibles, and by such
methods as shall be customary, in the good faith judgment of the Company, for
corporations similarly situated in the industry, unless the failure to provide
such insurance (together with all other such failures) would not have a
material adverse effect on the financial condition or results of operations of
the Company and its Subsidiaries, taken as a whole.
Section 4.07. Compliance with Laws.
The Company shall, and shall cause each of its Subsidiaries to, comply
with all applicable statutes, rules, regulations, orders and restrictions of
the United States of America, all states and municipalities thereof, and of any
governmental department, commission, board, regulatory authority, bureau,
agency and instrumentality of the foregoing, in respect of the conduct of its
businesses and the ownership of its properties, except for such noncompliances
as would not in the aggregate have a material adverse effect on the business or
financial condition of the Company and its Subsidiaries, taken as a whole.
<PAGE> 54
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Section 4.08. Corporate Existence.
Subject to Article 5 hereof, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect (i) its
corporate existence, and the corporate, partnership or other existence of each
Restricted Subsidiary, in accordance with the respective organizational
documents (as the same may be amended from time to time) of each Restricted
Subsidiary and the rights (charter and statutory), licenses and franchises of
the Company and its Restricted Subsidiaries; provided, however, that the
Company shall not be required to preserve any such right, license or franchise,
or the corporate, partnership or other existence of any of its Restricted
Subsidiaries, if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company
and its Restricted Subsidiaries, taken as a whole, and that the loss thereof is
not adverse in any material respect to the Holders.
Section 4.09. Maintenance of Office or Agency.
The Company shall maintain an office or agency where Notes may be
surrendered for registration of transfer or exchange or for presentation for
payment and where notices and demands to or upon the Company in respect of the
Notes and this Indenture may be served. The Company shall give prompt written
notice to the Trustee of the location, and any change in the location, of such
office or agency. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the address of the Trustee as set forth in Section 12.02.
The Company may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations. The Company
shall give prompt written notice to the Trustee of such designation or
rescission and of any change in the location of any such other office or
agency.
The Company hereby initially designates the Corporate Trust Office of the
Trustee set forth in Section 12.02 as such office of the Company.
<PAGE> 55
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Section 4.10. Limitation on Additional Indebtedness.
(a) The Company shall not, and shall not permit any Restricted Subsidiary
of the Company to, directly or indirectly, incur any Indebtedness (including
Acquired Indebtedness) other than Permitted Indebtedness.
(b) Notwithstanding the foregoing, the Company and its Restricted
Subsidiaries may incur Indebtedness (including Acquired Indebtedness), if (i)
after giving effect to the incurrence of such Indebtedness and the receipt and
application of the proceeds thereof, the Company's Fixed Charge Coverage Ratio
(determined on a pro forma basis for the last four fiscal quarters of the
Company for which financial statements are available at the date of
determination in accordance with the further provisions of this clause (b)) is
greater than 2.0 to 1 if the Indebtedness is incurred prior to July 15, 1999
and 2.25 to 1 if the Indebtedness is incurred thereafter and (ii) no Default or
Event of Default shall have occurred and be continuing at the time or as a
consequence of the incurrence of such Indebtedness. For purposes of computing
the Fixed Charge Coverage Ratio, (A) if the Indebtedness which is the subject
of a determination under this provision is Acquired Indebtedness, or
Indebtedness incurred in connection with the simultaneous acquisition (by way
of merger, consolidation or otherwise) of any Person, business, property or
assets (an "Acquisition"), then such ratio shall be determined by giving effect
to (on a pro forma basis, as if the transaction had occurred at the beginning
of the four-quarter period used to make such calculation) to both the
incurrence or assumption of such Acquired Indebtedness or such other
Indebtedness and the inclusion in the Company's EBITDA of the EBITDA of the
acquired Person, business, property or assets, (B) if any Indebtedness
outstanding or to be incurred (x) bears a floating rate of interest, the
interest expense on such Indebtedness shall be calculated as if the rate in
effect on the date of determination had been the applicable rate for the entire
period (taking into account on a pro forma basis any Interest Rate Agreement
applicable to such Indebtedness if such Interest Rate Agreement has a remaining
term as at the date of determination in excess of 12 months), (y) bears, at the
option of the Company or a Restricted Subsidiary, a fixed or floating rate of
interest, the interest expense on such Indebtedness shall be computed by
applying, at the option of the Company or such Restricted Subsidiary, either a
fixed or floating rate and (z) was incurred under a revolving credit facility,
the interest expense on such Indebtedness shall be computed based upon the
average daily balance of such Indebtedness
<PAGE> 56
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during the applicable period, (C) for any quarter prior to July 2, 1996
included in the calculation of such ratio, such calculation shall be made on a
pro forma basis, giving effect to the acquisition by the Company of Motor
Wheel, the issuance of the Notes, the incurrence of Indebtedness under the
Original Credit Agreement and the use of the net proceeds therefrom as if the
same had occurred at the beginning of the four-quarter period used to make such
calculation, (D) for any quarter included in the calculation of such ratio
prior to the date that any Asset Sale was consummated, or that any Indebtedness
was incurred, or that any Acquisition was effected, by the Company or any of
its Subsidiaries, such calculation shall be made on a pro forma basis, giving
effect to each Asset Sale, incurrence of Indebtedness or Acquisition, as the
case may be, and the use of any proceeds therefrom, as if the same had occurred
at the beginning of the four quarter period used to make such calculation and
(E) the Fixed Charge Coverage Ratio shall not take into account Permitted
Indebtedness that is incurred at the same time as Indebtedness under this
paragraph.
Section 4.11. Limitation on Foreign Indebtedness.
(a) The Company shall not permit any Restricted Subsidiary of the
Company which is not a Guarantor to, directly or indirectly, incur any
Indebtedness (including Acquired Indebtedness) other than Permitted
Indebtedness set forth in clauses (i) through (x) and (xii) of the definition
thereof unless (i) the Indebtedness is incurred, denominated and payable in the
local currencies of the jurisdictions of the operations of the Restricted
Subsidiary incurring such Indebtedness or of the business or the location of
assets being acquired with the proceeds of such Indebtedness; provided,
however, that any Indebtedness permitted to be incurred in a Western European
currency pursuant to this clause (i) may be incurred in any Western European
currency; provided, further, that any Restricted Subsidiary whose operations
are located in Mexico can also incur Indebtedness denominated and payable in
U.S. dollars, (ii) after giving effect to the incurrence of such Indebtedness
and the receipt of the application of the proceeds thereof, (A) if, as a result
of the incurrence of such Indebtedness such Restricted Subsidiary will become
subject to any restriction or limitation on the payment of dividends or the
making of other distributions, (I) the ratio of Foreign EBITDA to Foreign
Interest Expense (determined on a pro forma basis for the last four fiscal
quarters for which financial statements are available at the date of
determination) is greater than 3.0 to 1 and (II) the ratio of the Company's
Adjusted EBITDA to Consolidated Fixed Charges (determined on a pro forma basis
for the last four fiscal quarters of the Company for which financial statements
are available at the date of determination) is greater than 2.0 to 1 if the
Indebtedness is incurred prior to July 15, 1999 and 2.25 to 1 if the
Indebtedness is incurred thereafter and (B) in any other case, the Company's
Fixed Charge Coverage Ratio (determined on a pro forma basis for the last
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four fiscal quarters of the Company for which financial statements are
available at the date of determination) is greater than 2.0 to 1 if the
Indebtedness is incurred prior to July 15, 1999 and 2.25 to 1 if the
Indebtedness is incurred thereafter, and (iii) no Default or Event of Default
shall have occurred and be continuing at the time or as a consequence of the
incurrence of such Indebtedness.
(b) In the event that any Indebtedness incurred pursuant to clause (ii)(B)
of the foregoing paragraph (a) is proposed to be amended, modified or otherwise
supplemented such that the payment of dividends or the making of other
distributions becomes subject in any manner to any restriction or limitation,
the Company will not permit the Restricted Subsidiary to so amend, modify or
supplement such Indebtedness unless such Indebtedness could be incurred
pursuant to the terms of clause (ii)(A) of the foregoing paragraph (a).
(c) All calculations required under paragraphs (a) and (b) hereof shall be
made in a manner consistent with the calculations required under paragraph (b)
of Section 4.10.
Section 4.12. Limitation on Common Stock of Subsidiaries.
The Company shall not (i) sell, pledge, hypothecate or otherwise convey
or dispose of any Common Stock of a Restricted Subsidiary (other than under or
in respect of the Amended Credit Agreement or under the terms of any Designated
Senior Indebtedness and other than pledges of the Capital Stock of Restricted
Subsidiaries that are not Guarantors securing Indebtedness of such Restricted
Subsidiaries that are not Guarantors) or (ii) permit any of its Subsidiaries to
issue any Common Stock, other than to the Company or a Wholly-Owned Subsidiary
of the Company. The foregoing restrictions shall not apply to an Asset Sale
made in compliance with Section 4.15.
Section 4.13. Limitation on Restricted Payments.
The Company shall not make, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, make, any Restricted Payment, unless:
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(a) no Default or Event of Default shall have occurred and be
continuing at the time of or immediately after giving effect to such
Restricted Payment;
(b) immediately after giving pro forma effect to such Restricted
Payment, the Company could incur $1.00 of additional Indebtedness (other
than Permitted Indebtedness) under Section 4.10; and
(c) immediately after giving effect to such Restricted Payment, the
aggregate of all Restricted Payments declared or made after July 2, 1996
does not exceed the sum of (1) $5,000,000, plus (2) 50% of the Company's
Consolidated Net Income (or in the event that such Consolidated Net
Income shall be a deficit, minus 100% of such deficit) after July 2, 1996,
plus (3) 100% of the aggregate Net Cash Proceeds from the issue or sale,
after July 2, 1996, of Capital Stock (other than Disqualified Capital
Stock or Capital Stock of the Company issued to any Subsidiary of the
Company) of the Company or any Indebtedness or other securities of the
Company convertible into or exercisable or exchangeable for Capital
Stock (other than Disqualified Capital Stock) of the Company which has
been so converted or exercised 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,
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(iv) the retirement of any shares of Disqualified Capital Stock by
conversion into, or by exchange for, shares of Disqualified Capital Stock, or
out of the Net Cash Proceeds of the substantially concurrent issuance or sale
(other than to a Subsidiary of the Company) of other shares of Disqualified
Capital Stock, or (v) the making of Investments in Unrestricted Subsidiaries
and joint ventures, provided that the Net Investment therein made since July 2,
1996 shall not exceed an aggregate of $25,000,000 and (vi) the making of
Investments funded with the transfer of excess fixed assets no longer necessary
in the conduct of the business of the Company and its Subsidiaries in an
aggregate amount not to exceed $15,000,000; provided, however, that in
calculating the aggregate amount of Restricted Payments made subsequent to July
2, 1996, the amount of Net Investments made pursuant to clauses (v) and (vi)
shall be included in the calculation.
Not later than the date of making any Restricted Payment, the Company
shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this Section 4.13 were computed, which calculations
may be based upon the Company's latest available financial statements, and that
no Default or Event of Default exists and is continuing and no Default or Event
of Default will occur immediately after giving effect to any Restricted
Payments.
Section 4.14. Limitation on Other Senior Subordinated Debt.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, incur, contingently or otherwise, any
Indebtedness (other than the Notes and the Guarantees, as the case may be) that
is both (i) subordinate in right of payment to any Senior Indebtedness of the
Company or its Restricted Subsidiaries, as the case may be, and (ii) senior in
right of payment to the Notes and the Guarantees, as the case may be. For
purposes of this Section 4.14, Indebtedness is deemed to be senior in right of
payment to the Notes and the Guarantees, as the case may be, if it is not
explicitly subordinate in right of payment to Senior Indebtedness at least to
the same extent as the Notes and the Guarantees, as the case may be, are
subordinate to Senior Indebtedness.
Section 4.15. Limitation on Certain Asset Sales.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale un-
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less (i) the Company or its Restricted Subsidiaries, as the case may be,
receives consideration at the time of such sale or other disposition at
least equal to the fair market value thereof (as determined in good faith by
the Company's Board of Directors, and evidenced by a Board Resolution); (ii)
not less than 75% of the consideration received by the Company or its
Subsidiaries, as the case may be, is in the form of cash or Temporary Cash
Investments other than in the case where the Company or a Restricted Subsidiary
is exchanging assets held by the Company or such Restricted Subsidiary for
assets held by another Person; provided that any Investment received in such
exchange would be permitted under clause (B) below; and (iii) the Asset Sale
Proceeds received by the Company or such Restricted Subsidiary are applied (A)
first, to the extent the Company elects, or is required, to prepay, repay or
purchase any then existing Senior Indebtedness of the Company or any Restricted
Subsidiary within 180 days following the receipt of the Asset Sale Proceeds
from any Asset Sale, provided that any such repayment shall result in a
permanent reduction of the commitments, if any, thereunder in an amount equal
to the principal amount so repaid; (B) second, to repurchase Existing Notes
within 270 days following the receipt of the Asset Sale Proceeds from any Asset
Sale, tendered pursuant to the offer to repurchase required under the terms of
the Existing Indenture; (C) third, to the extent of the balance of Asset Sale
Proceeds after application as described in clauses (A) and (B) above, to the
extent the Company elects, to an investment in assets used or useful in
businesses similar or reasonably related to the business of the Company or
Restricted Subsidiary as conducted on the Issue Date (either directly or
indirectly through the purchase of Capital Stock or other securities of a
Person holding such assets), provided that such investment occurs or the
Company or a Restricted Subsidiary enters into contractual commitments to make
such investment, subject only to customary conditions (other than the obtaining
of financing), on or prior to the 181st day following receipt of such Asset
Sale Proceeds (the "Reinvestment Date") and Asset Sale Proceeds contractually
committed are so applied within 270 days following the receipt of such Asset
Sale Proceeds; and (D) fourth, 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.
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(b) If the Company is required to make an Excess Proceeds Offer, the
Company shall mail, within 30 days following the Reinvestment Date, a notice to
the Holders with a copy to the Trustee which shall include, among other things,
the instructions, determined by the Company, that each Holder must follow in
order to have such Notes repurchased and the calculations used in determining
the amount of Available Asset Sale Proceeds to be applied to the repurchase of
such Notes. The notice, which shall govern the terms of the Excess Proceeds
Offer, shall also state:
(1) that the Excess Proceeds Offer is being made pursuant to this
Section 4.15 and that the Excess Proceeds Offer shall remain open for a
period of 20 Business Days following its commencement or such longer
period as may be required by law (the "Offer Period");
(2) that such Holders have the right to require the Company to apply
the Available Asset Sale Proceeds to repurchase such Notes at a purchase
price in cash equal to 100% of the principal amount thereof plus accrued
and unpaid interest, if any, to the date of purchase;
(3) the purchase price and the purchase date (the "Purchase Date")
which shall be no earlier than 30 days and not later than 60 days from
the date such notice is mailed;
(4) that any Note not tendered or accepted for payment will continue
to accrue interest;
(5) that any Note accepted for payment pursuant to the Excess
Proceeds Offer shall cease to accrue interest on and after the Purchase
Date;
(6) that Holders electing to have a Note purchased pursuant to any
Excess Proceeds Offer will be required to surrender the Note, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Note completed, to the Company, a depositary, if appointed by the
Company, or a Paying Agent at the address specified in the notice at
least three Business Days before the Purchase Date;
(7) that Holders will be entitled to withdraw their election if the
Company, depositary or Paying Agent, as the case may be, receives, not
later than the expiration of the Offer Period, a facsimile transmission
or letter
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setting forth the name of the Holder, the principal amount of
the Note the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have the Note purchased;
(8) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Available Asset Sale Proceeds, the Company shall
select the Notes to be purchased on a pro rata basis (with such
adjustments as may be deemed appropriate by the Company so that only
Notes in denominations of $1,000, or integral multiples thereof, shall
be purchased); and
(9) that Holders whose Notes were purchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered.
On or before the Purchase Date, the Company shall, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, Notes
or portions thereof tendered pursuant to the Excess Proceeds Offer, deposit with
the Paying Agent U.S. legal tender sufficient to pay the purchase price plus
accrued interest, if any, on the Notes to be purchased and deliver to the
Trustee an Officers' Certificate stating that such Notes or portions thereof
were accepted for payment by the Company in accordance with the terms of this
Section 4.15. The Paying Agent shall promptly (but in any case not later than
three days after the Purchase Date) mail or deliver to each tendering Holder an
amount equal to the purchase price of the Note tendered by such Holder and
accepted by the Company for purchase, and the Company shall promptly issue a
new Note, and the Trustee, upon the receipt of a written request from the
Company, shall authenticate and mail or make available for delivery such new
Note to such Holder equal in principal amount to any unpurchased portion of the
Note surrendered. Any Note not so accepted shall be promptly mailed or
delivered by the Company to the Holder thereof. The Company will publicly
announce the results of the Excess Proceeds Offer on the Purchase Date. If an
Excess Proceeds Offer is not fully subscribed, the Company may retain that
portion of the Available Asset Sale Proceeds not required to repurchase Notes.
Section 4.16. Limitation on Transactions with Affiliates.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or suffer to exist any
transaction or series of re-
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lated transactions (including, without limitation, the sale, purchase,
exchange or lease of assets, property or services) with any Affiliate
(including entities in which the Company or any of its Restricted Subsidiaries
own a minority interest) or holder of 10% or more of the Company's Common Stock
(an "Affiliate Transaction") or extend, renew, waive or otherwise
modify the terms of any Affiliate Transaction entered into prior to the Issue
Date unless (i) such Affiliate Transaction is between or among the Company
and/or its Wholly-Owned Subsidiaries; or (ii) the terms of such Affiliate
Transaction are fair and reasonable to the Company or such Restricted
Subsidiary, as the case may be, and the terms of such Affiliate Transaction are
at least as favorable as the terms which could be obtained by the Company or
such Restricted Subsidiary, as the case may be, in a comparable transaction
made on an arm's-length basis between unaffiliated parties. In any Affiliate
Transaction involving an amount or having a value in excess of $2,000,000 which
is not permitted under clause (i) above, the Company must obtain a resolution
of the Board of Directors certifying that such Affiliate Transaction complies
with clause (ii) above. In transactions with a value in excess of $10,000,000
which are not permitted under clause (i) above, the Company or such Restricted
Subsidiary must obtain a written opinion as to the fairness of such a
transaction from an independent investment banking firm.
(b) The foregoing provisions of this Section 4.16 will not apply to (i) any
Restricted Payment that is not prohibited by Section 4.13, (ii) reasonable and
customary fees paid by the Company or its Restricted Subsidiaries to their
respective directors or (iii) customary investment banking, underwriting,
placement agent or financial advisor fees paid in connection with services
rendered to the Company or its Subsidiaries.
Section 4.17. Limitations on Liens.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, create, incur or otherwise cause or suffer to exist or become
effective any Liens of any kind upon any Property of the Company or any
Restricted Subsidiary, now owned or hereafter acquired, which secures
Indebtedness pari passu with or subordinated to the Notes unless (i) if such
Lien secures Indebtedness which is pari passu with the Notes, then the Notes
are secured on an equal and ratable basis with the obligations so secured until
such time as such obligation is no longer secured by a Lien or (ii) if such
Lien secures Indebtedness which is subordinated to the Notes, any such
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Lien shall be subordinated to a Lien granted to the Holders of the
Notes in the same collateral as that securing such Lien to the same extent as
such subordinated Indebtedness is subordinated to the Notes.
Section 4.18. Limitation on Creation of Subsidiaries.
The Company shall not create or acquire, nor permit any of its
Restricted Subsidiaries to create or acquire, any Subsidiary other than
(i) a Restricted Subsidiary existing as of the date of this Indenture, (ii) a
Restricted Subsidiary conducting a business similar or reasonably related to
the business of the Company and its Subsidiaries as conducted on the Issue
Date, or (iii) an Unrestricted Subsidiary; provided, however, that each
Restricted Subsidiary which is a Domestic Subsidiary acquired or created
pursuant to clause (ii) shall have executed a guarantee, satisfactory in form
and substance to the Trustee (and with such documentation relating thereto as
the Trustee shall require, including, without limitation, a supplement or
amendment to this Indenture and opinions of counsel as to the enforceability of
such guarantee), pursuant to which such Restricted Subsidiary shall become a
Guarantor. Neither the Company nor any of the Guarantors will transfer any
assets to a Domestic Restricted Subsidiary which is not a Guarantor unless such
Restricted Subsidiary simultaneously with such transfer executes a guarantee
satisfactory in form and substance to the Trustee (together with the
documentation referred to in the preceding sentence) pursuant to which such
Restricted Subsidiary shall become a Guarantor.
Section 4.19. Payments for Consent.
Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of any Notes for or as an inducement
to any consent, waiver or amendment of any of the terms or provisions of this
Indenture or the Notes unless such consideration is offered to be paid or
agreed to be paid to all Holders of the Notes which so consent, waive or agree
to amend in the time frame set forth in solicitation documents relating to such
consent, waiver or agreement.
Section 4.20. Change of Control.
(a) Within 20 days of the occurrence of a Change of Control, the Company
shall notify the Trustee in writing of
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such occurrence and shall make an offer to purchase (the "Change of
Control Offer") the outstanding Notes at a purchase price equal to 101% of the
principal amount thereof plus any accrued and unpaid interest thereon to the
Change of Control Payment Date (such purchase price being hereinafter referred
to as the "Change of Control Purchase Price") in accordance with the procedures
set forth in this Section 4.20.
(b) Within 20 days of the occurrence of a Change of Control, the
Company also shall (i) cause a notice of the Change of Control Offer to be
sent at least once to the Dow Jones News Service or similar business
news service in the United States and (ii) send by first-class mail, postage
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 transmis-
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sion or letter setting forth the name of the Holder, the
principal amount of the Notes delivered for purchase, and a statement
that such Holder is withdrawing his election to have such Notes
purchased;
(vii) that Holders whose Notes are being purchased only in part
will be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered, provided that each Note purchased and
each such new Note issued shall be in an original principal amount in
denominations of $1,000 and integral multiples thereof;
(viii) any other procedures that a Holder must follow to accept a
Change of Control Offer or effect withdrawal of such acceptance; and
(ix) the name and address of the Paying Agent.
On the Change of Control Payment Date, the Company shall, to the
extent lawful, (i) accept for payment Notes or portions thereof
tendered pursuant to the Change of Control Offer, (ii) deposit with the Paying
Agent money sufficient to pay the purchase price of all Notes or portions
thereof so tendered and (iii) deliver or cause to be delivered to the Trustee
Notes so accepted together with an Officers' Certificate stating the Notes or
portions thereof tendered to the Company. The Paying Agent shall promptly mail
to each Holder of Notes so accepted payment in an amount equal to the purchase
price for such Notes, and the Company shall execute and issue, and the Trustee
shall, upon the receipt of a written request from the Company, promptly
authenticate and make available for delivery to such Holder, a new Note equal
in principal amount to any unpurchased portion of the Notes surrendered;
provided that each such new Note shall be issued in an original principal
amount in denominations of $1,000 and integral multiples thereof.
(c) If the Amended Credit Agreement is in effect, or any amounts are owing
thereunder or in respect thereof, at the time of the occurrence of a Change of
Control, prior to the mailing of the notice to Holders described in the
preceding paragraph (b), but in any event within 30 days following any Change
of Control, the Company covenants to (A) repay in full all obligations under or
in respect of the Amended Credit Agreement or offer to repay in full all
obligations under or in respect of the Amended Credit Agreement and repay the
obligations under or in respect of the Amended Credit Agreement of each lender
who has accepted such offer or (B) obtain the requisite consent under the
Amended Credit Agreement to permit the
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repurchase of the Notes as described above. The Company must first
comply with the covenant described in the preceding sentence before it shall be
required to purchase Notes in the event of a Change of Control; provided that
the Company's failure to comply with the covenant described in the preceding
sentence constitutes an Event of Default described in Section 6.01(3) if not
cured within 60 days after the notice required by that section.
(d) (i) If the Company or any Subsidiary thereof has issued any outstanding
(A) Indebtedness that is subordinated in right of payment to the Notes or (B)
Preferred Stock, and the Company or such Subsidiary is required to repurchase,
or make an offer to repurchase, such Indebtedness, or redeem, or make an offer
to redeem, such Preferred Stock, in the event of a Change of Control or to make
a distribution with respect to such subordinated Indebtedness or Preferred
Stock in the event of a change of control, the Company shall not consummate any
such offer or distribution with respect to such subordinated Indebtedness or
Preferred Stock until such time as the Company shall have paid the Change of
Control Purchase Price in full to the Holders of Notes that have accepted the
Company's Change of Control Offer and shall otherwise have consummated the
Change of Control Offer made to Holders of the Notes and (ii) the Company will
not issue Indebtedness that is subordinated in right of payment to the Notes or
Preferred Stock with change of control provisions requiring the payment of such
Indebtedness or Preferred Stock prior to the payment of the Notes in the event
of a Change in Control under this Indenture.
In the event that a Change of Control occurs and the Holders of Notes
exercise their right to require the Company to purchase Notes, if such purchase
constitutes a "tender offer" for purposes of Rule 14e-1 under the Exchange Act
at that time, the Company will comply with the requirements of Rule 14e-1 as
then in effect with respect to such repurchase.
ARTICLE 5
SUCCESSOR CORPORATION
Section 5.01. Limitation on Consolidation, Merger and Sale of
Assets.
(a) The Company shall not and shall not permit any Guarantor to consolidate
with, merge with or into, or transfer all or substantially all of its assets
(as an entirety or substantially as an entirety in one transaction or a series
of re-
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lated transactions), to any Person unless: (i) the Company or the
Guarantor, as the case may be, shall be the continuing Person, or the Person
(if other than the Company or the Guarantor) formed by such consolidation or
into which the Company or the Guarantor, as the case may be, is merged or to
which the properties and assets of the Company or the Guarantor, as the case
may be, are transferred shall be a corporation organized and existing under the
laws of the United States or any State thereof or the District of Columbia and
shall expressly assume, by a supplemental indenture, executed and delivered to
the Trustee, in form satisfactory to the Trustee, all of the obligations of the
Company or the Guarantor, as the case may be, under the Notes and this
Indenture, and the obligations under this Indenture shall remain in full force
and effect; (ii) immediately before and immediately after giving effect to such
transaction, no Default or Event of Default shall have occurred and be
continuing; and (iii) immediately after giving effect to such transaction on a
pro forma basis the Company or such Person could incur at least $1.00
additional Indebtedness (other than Permitted Indebtedness) pursuant to Section
4.10 hereof, provided that a Person that is a Guarantor may merge into the
Company or another Person that is a Guarantor on the Issue Date without
complying with this clause (iii).
(b) In connection with any consolidation, merger or transfer of assets
contemplated by this Section 5.01, the Company shall deliver or cause to be
delivered, to the Trustee, in form and substance reasonably satisfactory to the
Trustee, an Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger or transfer and the supplemental indenture in
respect thereto comply with this Section 5.01 and that all conditions precedent
herein provided for relating to such transaction or transactions have been
complied with.
Section 5.02. Successor Person Substituted.
Upon any consolidation or merger, or any transfer of all or substantially
all of the assets of the Company or any Guarantor in accordance with Section
5.01 above, the successor corporation formed by such consolidation or into
which the Company is merged or to which such transfer is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
or such Guarantor under this Indenture with the same effect as if such
successor corporation had been named as the Company or such Guarantor herein,
and thereafter the predecessor corporation shall be relieved of all obligations
and covenants under this Indenture and the Notes.
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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 maturity of principal
in an aggregate amount of $10,000,000 or more with respect to any
Indebtedness of the Company or any Restricted Subsidiary thereof which
default shall not be cured, waived or postponed pursuant to an agreement
with the holders of such Indebtedness within 60 days after written
notice, or the acceleration of any such Indebtedness aggregating
$10,000,000 or more which acceleration shall not be rescinded or annulled
within 20 days after written notice to the Company of such Default by the
Trustee or any Holder;
(5) a court of competent jurisdiction enters a final judgment or
judgments which can no longer be appealed for the payment of money in
excess of $10,000,000 against the Company or any Restricted Subsidiary
thereof and such judgment remains undischarged, for a period of 60
consecutive days during which a stay of enforcement of such judgment
shall not be in effect;
(6) the Company or any Restricted Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
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(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 Subsidiary, or
(C) orders the liquidation of the Company or any Restricted
Subsidiary,
and the order or decree remains unstayed and in effect for 60 days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal
or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
The Trustee may withhold notice to the Holders of the Notes of any Default
(except in payment of principal or premium, if any, or interest on the Notes)
if the Trustee considers it to be in the best interest of the Holders of the
Notes to do so.
Section 6.02. Acceleration.
If an Event of Default (other than an Event of Default arising under
Section 6.01(6) or (7) with respect to the Company) occurs and is continuing,
the Trustee by notice to the
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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 under or in respect of the Credit Agreement or five Business
Days after receipt by the Company and the Representative of notice of the
acceleration of the Notes; provided, however, that after such acceleration but
before a judgment or decree based on such acceleration is obtained by the
Trustee, the Holders of a majority in aggregate principal amount of the
outstanding Notes may rescind and annul such acceleration and its consequences
if (i) all existing Events of Default, other than the nonpayment of accelerated
principal, premium, if any, or interest that has become due solely because of
the acceleration, have been cured or waived, (ii) to the extent the payment of
such interest is lawful, interest on overdue installments of interest and
overdue principal, which has become due otherwise than by such declaration of
acceleration, has been paid and (iii) if the rescission would not conflict with
any judgment or decree. No such rescission shall affect any subsequent Default
or impair any right consequent thereto. In case an Event of Default specified
in Section 6.01(6) or (7) with respect to the Company occurs, such principal,
premium, if any, and interest amount with respect to all of the Notes shall be
due and payable immediately without any declaration or other act on the part of
the Trustee or the Holders of the Notes.
Section 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy by proceeding at law or in equity to collect the payment
of principal of, or premium, if any, and interest on the Notes or to enforce
the performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Noteholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
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Section 6.04. Waiver of Past Defaults and Events of Default.
Subject to Sections 6.02, 6.07 and 8.02 hereof, the Holders of a majority
in principal amount of the Notes then outstanding have the right to waive any
existing Default or Event of Default or compliance with any provision of this
Indenture or the Notes. Upon any such waiver, such Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
cured for every purpose of this Indenture; but no such waiver shall extend to
any subsequent or other Default or Event of Default or impair any right
consequent thereto.
Section 6.05. Control by Majority.
The Holders of a majority in principal amount of the Notes then
outstanding may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on the Trustee by this Indenture. The Trustee, however, may refuse
to follow any direction that conflicts with law or this Indenture or that the
Trustee determines may be unduly prejudicial to the rights of another
Noteholder or that may involve the Trustee in personal liability; provided that
the Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.
Section 6.06. Limitation on Suits.
Subject to Section 6.07 below, a Noteholder may not institute any
proceeding or pursue any remedy with respect to this Indenture or the Notes
unless:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(2) the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding make a written request to the Trustee to pursue
the remedy;
(3) such Holder or Holders offer to the Trustee indemnity reasonably
satisfactory to the Trustee against any loss, liability or expense to be
incurred in compliance with such request;
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(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60 day period by the Holders of a
majority in aggregate principal amount of the Notes then outstanding.
A Noteholder may not use this Indenture to prejudice the rights of another
Noteholder or to obtain a preference or priority over another Noteholder.
Section 6.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal of, or premium, if any, and
interest of the Note on or after the respective due dates expressed in the
Note, or to bring suit for the enforcement of any such payment on or after such
respective dates, is absolute and unconditional and shall not be impaired or
affected without the consent of the Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default in payment of principal, premium or interest
specified in Section 6.01(1) or (2) hereof occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company or the Guarantors (or any other obligor on the Notes) for
the whole amount of unpaid principal and accrued interest remaining unpaid,
together with interest on overdue principal and, to the extent that payment of
such interest is lawful, interest on overdue installments of interest, in each
case at the rate then borne by the Notes, and such further amounts as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
Section 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel) and the Noteholders
allowed in any judicial proceedings relative to the Company or the Guarantors
(or any other obligor upon the Notes), any of
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their respective creditors or any of their respective property and shall be
entitled and empowered to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same after
deduction of its charges and expenses to the extent that any such charges and
expenses are not paid out of the estate in any such proceedings and any
custodian in any such judicial proceeding is hereby authorized by each
Noteholder to make such payments to the Trustee, and in the event that the
Trustee shall consent to the making of such payments directly to the
Noteholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 hereof.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Noteholder any plan
or reorganization, arrangement, adjustment or composition affecting the Notes
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Noteholder in any such proceedings.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article 6, it
shall pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.07 hereof,
including payment of all compensation, expenses and liabilities incurred
and all advances made, by the Trustee and the costs and expense of
collection;
SECOND: to Noteholders for amounts due and unpaid on the Notes for
principal, premium, if any, and interest as to each, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Notes; and
THIRD: to the Company or, to the extent the Trustee collects any
amount from any Guarantor, to such Guarantor.
The Trustee may fix a record date and payment date for any payment to
Noteholders pursuant to this Section 6.10.
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Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit, having
due regard to the merits and good faith of the claims or defenses made by the
party litigant. This Section 6.11 does not apply to a suit by the Trustee, a
suit by a Holder pursuant to Section 6.07 hereof or a suit by Holders of more
than 10% in principal amount of the Notes then outstanding.
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee.
(A) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture and
use the same degree of care and skill in its exercise as a prudent person would
exercise or use under the same circumstances in the conduct of his own affairs.
(B) Except during the continuance of an Event of Default:
(1) The duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the TIA and the Trustee need
perform only those duties that are specifically set forth in this
Indenture and no others, and no covenants or obligations shall be implied
in this Indenture against the Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture but, in the case of any such certificates or opinions which by
any provision hereof are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they
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conform to the requirements of this Indenture (but need not confirm or
investigate the accuracy of mathematical calculations or other facts
stated therein).
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of this
Section 7.01.
(2) The Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Sections 6.02 and 6.05 hereof.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any liability. The Trustee
shall be under no obligation to exercise any of its rights or powers
under the Indenture unless adequate indemnity satisfactory to it against such
risk or liability has been assured to it.
(e) Whether or not therein expressly so provided,
paragraphs (a), (b), (c) and (d) of this Section 7.01 shall govern
every provision of this Indenture that in any way relates to the Trustee.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company
or any Guarantor. Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by the law.
Section 7.02. Rights of Trustee.
Subject to Section 7.01 hereof:
(1) The Trustee may conclusively rely on and shall be protected in
acting or refraining from acting upon any document reasonably believed by
it to be genuine and to have been signed or presented by the proper
person. The
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Trustee need not investigate any fact or matter stated in the document.
(2) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel, or both, which shall
conform to the provisions of Section 12.05 hereof. The Trustee shall be
protected and shall not be liable for any action it takes or omits to
take in good faith in reliance on such certificate or opinion.
(3) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent
appointed by it with due care.
(4) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it reasonably believes to be authorized or
within its rights or powers.
(5) The Trustee may consult with counsel of its selection, and the
advice or opinion of such counsel as to matters of law shall be full and
complete authorization and protection from liability in respect of any
action taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.
(6) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this
Indenture, unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby.
(7) The Trustee shall not be deemed to have notice of any Default or
Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in
fact such a default is received by the Trustee at the Corporate Trust
Office of the Trustee, and such notice references the Notes and this
Indenture.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may make loans to,
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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 or upon
the Company's direction pursuant to the terms of this Indenture, it shall not
be responsible for the use or application of money received by any Paying Agent
other than the Trustee, and it shall not be responsible for any statement in
the Notes other than its certificate of authentication.
Section 7.05. Notice of Default.
If a Default or an Event of Default occurs and is continuing and if it is
actually known to the Trustee, the Trustee shall mail to each Noteholder notice
of the Default or the Event of Default, as the case may be, within 90 days
after it occurs. Except in the case of a Default or an Event of Default in
payment of the principal of, or premium, if any, or interest on any Note the
Trustee may withhold the notice if and so long as the board of directors of the
Trustee, the executive committee or any trust committee of such board and/or
its Trust Officers in good faith determine(s) that withholding the notice is in
the interests of the Noteholders.
Section 7.06. Reports by Trustee to Holders.
Within 60 days after May 15 of any year, commencing the May 15
following the date of this Indenture, the Trustee shall mail to each Noteholder
a brief report dated as of such May 15 that complies with TIA Section 313(a)
(but if no event described in TIA Section 313(a) has occurred within the
twelve months preceding the report date, no report need be transmitted). The
Trustee also shall comply with TIA Sections 313(b) and 313(c).
A copy of each report at the time of its mailing to Noteholders shall be
filed with the SEC and each stock exchange, if any, on which the Notes are
listed. The Company shall promptly notify the Trustee when the Notes are
listed on any stock exchange and the Trustee shall comply with TIA
Section 313(d).
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Section 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time such compensation
for its services as the Trustee and the Company shall from time to time agree
in writing. The 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 promptly upon request for all reasonable disbursements,
expenses and advances incurred or made by it in connection with its duties
under this Indenture, including the reasonable compensation, disbursements and
expenses of the Trustee's agents and counsel.
The Company shall indemnify each of the Trustee and any predecessor
Trustee for, and hold it harmless against, any and all damages, claims, loss or
liability incurred by it in connection with the acceptance or performance of
its duties under this Indenture including the costs and expenses of enforcing
this Indenture against the Company and the Guarantors and defending itself
against any claim or liability in connection with the exercise or performance
of any of its powers or duties hereunder. The Trustee shall notify the Company
promptly of any claim asserted against the Trustee for which it may seek
indemnity. However, the failure by the Trustee to so notify the Company shall
not relieve the Company of its obligations. Notwithstanding the foregoing, the
Company and the Guarantors need not reimburse the Trustee for any expense or
indemnify it against any loss or liability incurred by the Trustee through its
negligence or bad faith. To secure the payment obligations of the Company and
the Guarantors in this Section 7.07, the Trustee shall have a lien prior to the
Notes on all money or property held or collected by the Trustee except such
money or property held in trust to pay principal of and interest on particular
Notes. Such lien shall survive the satisfaction and discharge of this
Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(6) or (7) hereof occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
For purposes of this Section 7.07, the term "Trustee" shall include any
trustee appointed pursuant to Article 9.
The obligation of the Company and the Guarantors under this Section 7.07
shall survive the satisfaction and discharge of this Indenture.
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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, at the expense of the Company, any court of competent jurisdiction
for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10 hereof, any Noteholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Immediately following such
delivery, the retiring Trustee shall, subject to its rights under Section 7.07
hereof, transfer all property held by it as Trustee to the successor Trustee
(provided all sums owing to the Trustee hereunder have been paid and subject to
the lien provided for in Section 7.07 hereof), the resignation or removal of
the retiring Trustee shall become effective, and the successor Trustee shall
have
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all the rights, powers and duties of the Trustee under this Indenture. A
successor Trustee shall mail notice of its succession to each Noteholder.
Notwithstanding replacement of the Trustee pursuant to this Section 7.08,
the obligations of the Company and the Guarantors under Section 7.07 hereof
shall continue for the benefit of the retiring Trustee.
Section 7.09. Successor Trustee by Consolidation, Merger or Conversion.
If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all of its corporate trust assets to, another corporation,
subject to Section 7.10 hereof, the successor corporation without any further
act shall be the successor Trustee.
Section 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA Section 310(a)(1), (2) and (5) in every respect. The Trustee shall
have a combined capital and surplus of at least $100,000,000 as set forth in
its most recent published annual report of condition. The Trustee shall comply
with TIA Section 310(b), including the provision in Section 310(b)(1).
Section 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311 (b). A Trustee who has resigned or
been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
Section 7.12. Paying Agents.
The Company shall cause each Paying Agent other than the Trustee to
execute and deliver to it and the Trustee an instrument in which such agent
shall agree with the Trustee, subject to the provisions of this Section 7.12:
(A) that it will hold all sums held by it as agent for the payment
of principal of, or premium, if any, or interest on, the Notes (whether
such sums have been paid to it by the Company or by any obligor on the
Notes) in trust for the benefit of Holders of the Notes or the Trustee;
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(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 interest on, the Notes when the same shall be due and payable.
ARTICLE 8
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 8.01. Without Consent of Holders.
The Company and the Guarantors, when authorized by a Board
Resolution of each of them, and the Trustee may amend or supplement this
Indenture or the Notes without notice to or consent of any Noteholder:
(1) to comply with Section 5.01 hereof;
(2) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(3) to comply with any requirements of the SEC under the TIA;
(4) to cure any ambiguity, defect or inconsistency, or to make any
other change that does not materially and adversely affect the rights of
any Noteholder; or
(5) to make any other change that does not, in the opinion of the
Trustee, adversely affect in any material respect the rights of any
Noteholders hereunder.
The Trustee is hereby authorized to join with the Company and the
Guarantors in the execution of any supplemental indenture authorized or
permitted by the terms of this Indenture and to make any further appropriate
agreements and stipulations which may be therein contained, but the Trustee
shall not be obligated to enter into any such supplemental indenture which
adversely affects its own rights, duties or immunities under this Indenture.
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Section 8.02. With Consent of Holders.
The Company, the Guarantors, when authorized by a Board Resolution
of each of them, and the Trustee may amend or supplement this Indenture or the
Notes with the written consent of the Holders of not less than a majority in
aggregate principal amount of the outstanding Notes without notice to any
Noteholder. The Holders of not less than a majority in aggregate principal
amount of the outstanding Notes may waive compliance in a particular instance
by the Company with any provision of this Indenture or the Notes without notice
to any Noteholder. Subject to Section 8.04, without the consent of each
Noteholder affected, however, an amendment, supplement or waiver, including a
waiver pursuant to Section 6.04, may not:
(1) reduce the amount of Notes whose Holders must consent to an
amendment, supplement or waiver to this Indenture or the Notes;
(2) reduce the rate of or change the time for payment of interest on
any Note;
(3) reduce the principal of or premium on or change the stated
maturity of any Note;
(4) make any Note payable in money other than that stated in the Note
or change the place of payment from New York, New York;
(5) change the amount or time of any payment required by the Notes or
reduce the premium payable upon any redemption of the Notes in accordance
with Paragraph 6 of the Notes, or change the time before which no such
redemption may be made;
(6) waive a default in the payment of the principal of, or interest
on, or redemption payment with respect to, any Note;
(7) make any changes in Sections 6.04 or 6.07 hereof or this sentence
of Section 8.02; or
(8) affect the ranking of the Notes or the Guarantees in a manner
adverse to the Holders.
After an amendment, supplement or waiver under this Section 8.02
becomes effective, the Company shall mail to the
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Holders a notice briefly describing the amendment, supplement or waiver.
Upon the request of the Company, accompanied by a Board Resolution
authorizing the execution of any such supplemental indenture, and upon the
receipt by the Trustee of evidence reasonably satisfactory to the Trustee of
the consent of the Noteholders as aforesaid and upon receipt by the Trustee of
the documents described in Section 8.06 hereof, the Trustee shall join with the
Company and the Guarantors in the execution of such supplemental indenture
unless such supplemental indenture affects the Trustee's own rights, duties or
immunities under this Indenture, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such supplemental
indenture.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
Section 8.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the Notes shall
comply with the TIA as then in effect.
Section 8.04. Revocation and Effect of Consents.
Until an amendment, supplement, waiver or other action becomes effective,
a consent to it by a Holder of a Note is a continuing consent conclusive and
binding upon such Holder and every subsequent Holder of the same Note or
portion thereof, and of any Note issued upon the transfer thereof or in
exchange therefor or in place thereof, even if notation of the consent is not
made on any such Note. Any such Holder or subsequent Holder, however, may
revoke the consent as to his Note or portion of a Note, if the Trustee
receives the notice of revocation before the date the amendment, supplement,
waiver or other action becomes effective.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment,
supplement, or waiver which record date shall be at least 30 days prior to the
first solicitation of such consent. If a record date is fixed, then,
notwithstanding the preceding paragraph, those Persons who were Holders at such
record date (or their duly designated proxies), and only such Persons, shall be
entitled to consent to such amend-
<PAGE> 85
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ment, supplement, or waiver or to revoke any consent previously given,
whether or not such Persons continue to be Holders after such record date. No
such consent shall be valid or effective for more than 90 days after such
record date.
After an amendment, supplement, waiver or other action becomes effective,
it shall bind every Noteholder, unless it makes a change described in any of
clauses (1) through (8) of Section 8.02 hereof. In that case the amendment,
supplement, waiver or other action shall bind each Holder of a Note who has
consented to it and every subsequent Holder of a Note or portion of a Note that
evidences the same debt as the consenting Holder's Note; provided that any such
waiver shall not impair or affect the right of any Holder to receive payment of
principal of and interest on a Note, on or after the respective due dates
expressed in such Note, or to bring suit for the enforcement of any such
payment on or after such respective dates without the consent of such Holder.
Section 8.05. Notation on or Exchange of Notes.
If an amendment, supplement, or waiver changes the terms of a Note, the
Trustee may request the Holder of the Note to deliver it to the Trustee. In
such case, the Trustee shall place an appropriate notation on the Note about
the changed terms and return it to the Holder. Alternatively, if the Company
or the Trustee so determines, the Company in exchange for the Note shall issue
and the Trustee shall authenticate a new security that reflects the changed
terms. Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment supplement or waiver.
Section 8.06. Trustee To Sign Amendments, etc.
The Trustee shall sign any amendment, supplement or waiver authorized
pursuant to this Article 8 if the amendment, supplement or waiver does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may, but need not, sign it. In signing or refusing to
sign such amendment, supplement or waiver the Trustee shall be entitled to
receive and, subject to Section 7.01 hereof, shall be fully protected in
relying upon an Officers' Certificate and an Opinion of Counsel stating that
such amendment, supplement or waiver is authorized or permitted by this
Indenture, that it is not inconsistent herewith, and that it will be valid and
binding upon the Company and the Guarantors in accordance with its terms. The
Company or any Guarantor may not sign an amendment or supplement until the
Board of Directors of the Company or such Guarantor, as appropriate, approves
it.
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ARTICLE 9
DISCHARGE OF INDENTURE; DEFEASANCE
Section 9.01. Discharge of Indenture.
The Company and the Guarantors may terminate their obligations under the
Notes, the Guarantees and this Indenture, except the obligations referred to in
the last paragraph of this Section 9.01, if there shall have been cancelled by
the Trustee or delivered to the Trustee for cancellation all Notes theretofore
authenticated and delivered (other than any Notes that are asserted to have
been destroyed, lost or stolen and that shall have been replaced as provided in
Section 2.07 hereof) and the Company has paid all sums payable by it hereunder
or deposited all required sums with the Trustee.
After such delivery the Trustee upon request shall acknowledge in writing
the discharge of the Company's and the Guarantors' obligations under the Notes,
the Guarantees and this Indenture except for those surviving obligations
specified below.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company in Sections 7.07, 9.05 and 9.06 hereof shall
survive.
Section 9.02. Legal Defeasance.
The Company may at its option, by Board Resolution, be discharged from its
obligations with respect to the Notes and the Guarantors discharged from their
obligations under the Guarantees on the date the conditions set forth in
Section 9.04 below are satisfied (hereinafter, "Legal Defeasance"). For this
purpose, such Legal Defeasance means that the Company shall be deemed to have
paid and discharged the entire indebtedness represented by the Notes and to
have satisfied all its other obligations under such Notes and this Indenture
insofar as such Notes are concerned (and the Trustee, at the expense of the
Company, shall, subject to Section 9.06 hereof, execute proper instruments
acknowledging the same), except for the following which shall survive until
otherwise terminated or discharged hereunder: (A) the rights of Holders of
outstanding Notes to receive solely from the trust funds described in Section
9.04 hereof and as more fully set forth in such Section, 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 Sec-
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tions 2.03, 2.04, 2.05, 2.06, 2.07, 2.08 and 4.09 hereof, (C) the rights,
powers, trusts, duties, and immunities of the Trustee hereunder (including
claims of, or payments to, the Trustee under or pursuant to Section 7.07
hereof) and (D) this Article 9. Subject to compliance with this Article 9, the
Company may exercise its option under this Section 9.02 with respect to the
Notes notwithstanding the prior exercise of its option under Section 9.03 below
with respect to the Notes.
Section 9.03. Covenant Defeasance.
At the option of the Company, pursuant to a Board Resolution, the
Company and the Guarantors shall be released from their respective obligations
under Sections 4.02 through 4.08 and Sections 4.10 through 4.20 hereof,
inclusive, and clause (a)(iii) of Section 5.01 hereof with respect to the
outstanding Notes on and after the date the conditions set forth in Section
9.04 hereof are satisfied (hereinafter, "Covenant Defeasance"). For this
purpose, such Covenant Defeasance means that the Company and the Guarantors may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such specified Section or portion
thereof, whether directly or indirectly by reason of any reference elsewhere
herein to any such specified Section or portion thereof or by reason of any
reference in any such specified Section or portion thereof to any other
provision herein or in any other document, but the remainder of this Indenture
and the Notes shall be unaffected thereby.
Section 9.04. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of
Section 9.02 or Section 9.03 hereof to the outstanding Notes:
(1) the Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the
requirements of Section 7.10 hereof who shall agree to comply with the
provisions of this Article 9 applicable to it) as funds in trust for the
purpose of making the following payments, specifically pledged as
security for, and dedicated solely to, the benefit of the Holders of the
Notes, (A) money in an amount, or (B) U.S. Government Obligations which
through the scheduled payment 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
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thereof, sufficient, in the opinion of a nationally-recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge, and which shall
be applied by the Trustee (or other qualifying trustee) to pay and
discharge, the principal of, premium, if any, and accrued interest on the
outstanding Notes at the maturity date of such principal, premium, if
any, or interest, or on dates for payment and redemption of such
principal, premium, if any, and interest selected in accordance with the
terms of this Indenture and of the Notes;
(2) no Event of Default or Default with respect to the Notes shall
have occurred and be continuing on the date of such deposit, or shall
have occurred and be continuing at any time during the period ending on
the 91st day after the date of such deposit or, if longer, ending on the
day following the expiration of the longest preference period under any
Bankruptcy Law applicable to the Company in respect of such deposit (it
being understood that this condition shall not be deemed satisfied until
the expiration of such period);
(3) such Legal Defeasance or Covenant Defeasance shall not cause the
Trustee to have a conflicting interest for purposes of the TIA with
respect to any securities of the Company;
(4) such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute default under any other agreement
or instrument to which the Company is a party or by which it is bound;
(5) the Company shall have delivered to the Trustee an Opinion of
Counsel stating that, as a result of such Legal Defeasance or Covenant
Defeasance, neither the trust nor the Trustee will be required to
register as an investment company under the Investment Company Act of
1940, as amended;
(6) in the case of an election under Section 9.02 above, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that
(i) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling to the effect that or (ii) there has
been a change in any applicable Federal income tax law with the effect
that, and such opinion shall confirm that, the Holders of the outstanding
Notes or persons in their
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positions will not recognize income, gain or loss for Federal income tax
purposes solely as a result of such Legal Defeasance and will be subject
to Federal income tax on the same amounts, in the same manner, including
as a result of prepayment, and at the same times as would have been the
case if such Legal Defeasance had not occurred;
(7) in the case of an election under Section 9.03 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of the outstanding Notes will not recognize income, gain
or loss for Federal income tax purposes as a result of such Covenant
Defeasance and will be subject to Federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if
such Covenant Defeasance had not occurred;
(8) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the Legal Defeasance under
Section 9.02 above or the Covenant Defeasance under Section 9.03 hereof
(as the case may be) have been complied with;
(9) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit under clause (1) was not made by the
Company with the intent of defeating, hindering, delaying or defrauding
any creditors of the Company or others; and
(10) the Company shall have paid or duly provided for payment under
terms mutually satisfactory to the Company and the Trustee all amounts
then due to the Trustee pursuant to Section 7.07 hereof.
Section 9.05. Deposited Money and U.S. Government Obligations To Be Held in
Trust; Other Miscellaneous Provisions.
All money and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee pursuant to Section 9.04 hereof in respect
of the outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the
payment, either directly or through any Paying Agent as the Trustee may
determine, to the Holders of such Notes, of all sums due and to become due
thereon in respect of principal, premium,
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if any, and accrued interest, but such money need not be segregated from
other funds except to the extent required by law.
The Company and the Guarantors shall pay and indemnify the Trustee against
any tax, fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 9.04 hereof or the principal,
premium, if any, and interest received in respect thereof other than any such
tax, fee or other charge which by law is for the account of the Holders of the
outstanding Notes.
Anything in this Article 9 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or U.S. Government Obligations held by it as provided in Section 9.04
hereof which, in the opinion of a nationally-recognized firm of independent
public accountants expressed in a written certification thereof delivered to
the Trustee, is or are in excess of the amount thereof which would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
Section 9.06. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 9.01, 9.02 or 9.03 hereof by
reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company's and each Guarantor's obligations under this
Indenture, the Notes and the Guarantees shall be revived and reinstated as
though no deposit had occurred pursuant to this Article 9 until such time as
the Trustee or Paying Agent is permitted to apply all such money or U.S.
Government Obligations in accordance with Section 9.01 hereof; provided,
however, that if the Company or the Guarantors have made any payment of
principal of, premium, if any, or accrued interest on any Notes because of the
reinstatement of their obligations, the Company or the Guarantors, as the case
may be, shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money or U.S. Government Obligations held by the
Trustee or Paying Agent.
Section 9.07. Moneys Held by Paying Agent.
In connection with the satisfaction and discharge of this Indenture, all
moneys then held by any Paying Agent under the provisions of this Indenture
shall, upon demand of the Company, be paid to the Trustee, or if sufficient
moneys have been
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deposited pursuant to Section 9.01 hereof, to the Company (or, if such moneys
had been deposited by the Guarantors, to such Guarantors), and thereupon such
Paying Agent shall be released from all further liability with respect to such
moneys.
Section 9.08. Moneys Held by Trustee.
Any moneys deposited with the Trustee or any Paying Agent or then held by
the Company or the Guarantors in trust for the payment of the principal of, or
premium, if any, or interest on any Note that are not applied but remain
unclaimed by the Holder of such Note for two years after the date upon which
the principal of, or premium, if any, or interest on such Note shall have
respectively become due and payable shall be repaid to the Company (or, if
appropriate, the Guarantors) upon Company Request, or if such moneys are then
held by the Company or the Guarantors in trust, such moneys shall be released
from such trust; and the Holder of such Note entitled to receive such payment
shall thereafter, as an unsecured general creditor, look only to the
Company and the Guarantors for the payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money shall thereupon
cease; provided, however, that the Trustee or any such Paying Agent, before
being required to make any such repayment, may, at the expense of the Company
and the Guarantors, either mail to each Noteholder affected, at the address
shown in the register of the Notes maintained by the Registrar pursuant to
Section 2.03 hereof, or cause to be published once a week for two successive
weeks, in a newspaper published in the English language, customarily published
each Business Day and of general circulation in the City of New York, New York,
a notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such mailing or
publication, any unclaimed balance of such moneys then remaining will be repaid
to the Company. After payment to the Company or the Guarantors or the release
of any money held in trust by the Company or any Guarantors, as the case may
be, Noteholders entitled to the money must look only to the Company and the
Guarantors for payment as general creditors unless applicable abandoned
property law designates another person.
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ARTICLE 10
GUARANTEE OF NOTES
Section 10.01. Guarantee.
Subject to the provisions of this Article 10, each Guarantor hereby
jointly and severally unconditionally guarantees to each Holder and to the
Trustee, on behalf of the Holders, (i) the due and punctual payment of the
principal of, and premium, if any, and interest on each Note, when and as the
same shall become due and payable, whether at maturity, by acceleration or
otherwise, the due and punctual payment of interest on the overdue principal
of, and premium, if any, and interest on the Notes, to the extent lawful, and
the due and punctual performance of all other Obligations of the Company to the
Holders or the Trustee all in accordance with the terms of such Note and this
Indenture, and (ii) in the case of any extension of time of payment or renewal
of any Notes or any of such other Obligations, that the same will be promptly
paid in full when due or performed in accordance with the terms of the
extension or renewal, at stated maturity, by acceleration or otherwise. Each
Guarantor hereby agrees that its obligations hereunder shall be absolute and
unconditional, irrespective of, and shall be unaffected by, any invalidity,
irregularity or unenforceability of any such Note or this Indenture, any
failure to enforce the provisions of any such Note or this Indenture, any
waiver, modification or indulgence granted to the Company with respect thereto
by the Holder of such Note or the Trustee, or any other circumstances which may
otherwise constitute a legal or equitable discharge of a surety or such
Guarantor.
Each Guarantor hereby waives diligence, presentment, filing of claims with
a court in the event of merger or bankruptcy of the Company, any right to
require a proceeding first against the Company, protest or notice with respect
to any such Note or the Indebtedness evidenced thereby and all demands
whatsoever, and covenants that this Guarantee will not be discharged as to any
such Note except by payment in full of the principal thereof, premium if any,
and interest thereon and as provided in Section 9.01 hereof. Each Guarantor
further agrees that, as between such Guarantor, on the one hand, and the
Holders and the Trustee, on the other hand, (i) the maturity of the Obligations
guaranteed hereby may be accelerated as provided in Article 6 hereof for the
purposes of this Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the Obligations
guaranteed hereby, and (ii) in the event of any declaration of accelera-
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tion of such Obligations as provided in Article 6 hereof, such Obligations
(whether or not due and payable) shall forthwith become due and payable by each
Guarantor for the purpose of this Guarantee. In addition, without limiting the
foregoing provisions, upon the effectiveness of an acceleration under Article 6
hereof, the Trustee shall promptly make a demand for payment on the Notes under
the Guarantee provided for in this Article 10 and not discharged.
The Guarantee set forth in this Section 10.01 shall not be valid or become
obligatory for any purpose with respect to a Note until the certificate of
authentication on such Note shall have been signed by or on behalf of the
Trustee.
Section 10.02. Execution and Delivery of Guarantees.
To evidence the Guarantee set forth in this Article 10, each Guarantor
hereby agrees that a notation of such Guarantee shall be placed on each Note
authenticated and made available for delivery by the Trustee and that this
Guarantee shall be executed on behalf of each Guarantor by the manual or
facsimile signature of an Officer of each Guarantor.
Each Guarantor hereby agrees that the Guarantee set forth in Section 10.01
shall remain in full force and effect notwithstanding any failure to endorse on
each Note a notation of such Guarantee.
If an Officer of a Guarantor whose signature is on the Guarantee no longer
holds that office at the time the Trustee authenticates the Note on which the
Guarantee is endorsed, the Guarantee shall be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication thereof
hereunder, shall constitute due delivery of the Guarantee set forth in this
Indenture on behalf of each Guarantor.
Section 10.03. Limitation of Guarantee.
The obligations of each Guarantor are limited to the maximum amount as
will, after giving effect to all other contingent and fixed liabilities of such
Guarantor (including, without limitation, any guarantees of Senior
Indebtedness) and after giving effect to any collections from or payments made
by or on behalf of any other Guarantor in respect of the obligations of such
other Guarantor under its Guarantee or pursuant to its contribution obligations
under this Indenture, result in
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the obligations of such Guarantor under the Guarantee not constituting a
fraudulent conveyance or fraudulent transfer under federal or state law.
Each Guarantor that makes a payment or distribution under a Guarantee shall be
entitled to a contribution from each other Guarantor in a pro rata amount based
on the Adjusted Net Assets of each Subsidiary Guarantor.
Section 10.04. Additional Guarantors.
The Company covenants and agrees that it will cause any Person which
becomes obligated to guarantee the Notes, pursuant to the terms of Section 4.18
hereof, to execute a guarantee satisfactory in form and substance to the
Trustee pursuant to which such Restricted Subsidiary shall guarantee the
obligations of the Company under the Notes and this Indenture in accordance
with this Article 10 with the same effect and to the same extent as if such
Person had been named herein as a Guarantor.
Section 10.05. Release of Guarantor.
A Guarantor shall be released from all of its obligations under its
Guarantee if:
(i) the Guarantor has sold all or substantially all of its assets or
the Company and its Restricted Subsidiaries have sold all of the Capital
Stock of the Guarantor owned by them, in each case in a transaction in
compliance with Sections 4.15 and 5.01 hereof; or
(ii) the Guarantor merges with or into or consolidates with, or
transfers all or substantially all of its assets to, the Company or
another Guarantor in a transaction in compliance with Section 5.01
hereof;
and in each such case, the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to such transactions have been complied
with.
Section 10.06. Guarantee Obligations Subordinated to Guarantor Senior
Indebtedness.
Each Guarantor covenants and agrees, and each Holder of Notes, by its
acceptance thereof, likewise covenants and agrees, that to the extent and in
the manner hereinafter set forth in this Article 10, the Indebtedness
represented by the Guarantee and the payment of the principal of, premium, if
any,
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and interest on the Notes pursuant to the Guarantee by such Guarantor are
hereby expressly made subordinate and subject in right of payment as provided
in this Article 10 to the prior payment in full in cash or Cash Equivalents or,
as acceptable to the holders of Guarantor Senior Indebtedness of such
Guarantor, in any other manner, of all Guarantor Senior Indebtedness of such
Guarantor.
This Section 10.06 and the following Sections 10.07 through 10.11
shall constitute a continuing offer to all Persons who, in reliance upon such
provisions, become holders of or continue to hold Guarantor Senior Indebtedness
of any Guarantor; and such provisions are made for the benefit of the holders
of Guarantor Senior Indebtedness of each Guarantor; and such holders are made
obligees hereunder and they or each of them may enforce such provisions.
Section 10.07. Payment Over of Proceeds upon Dissolution, etc., of a Guarantor.
In the event of (a) any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, reorganization or other similar case
or proceeding in connection therewith, relative to any Guarantor or to its
creditors, as such, or to its assets, whether voluntary or involuntary, or (b)
any liquidation, dissolution or other winding-up of any Guarantor, whether
voluntary or involuntary and whether or not involving insolvency or bankruptcy
or (c) any general assignment for the benefit of creditors or any other
marshaling of assets or liabilities of any Guarantor, then and in any such
event:
(1) the holders of all Guarantor Senior Indebtedness of such
Guarantor shall be entitled to receive payment in full in cash or Cash
Equivalents or, as acceptable to the holders of such Guarantor Senior
Indebtedness, in any other manner, of all amounts due on or in respect of
all such Guarantor Senior Indebtedness, or provision shall be made for
such payment, before the Holders of the Notes are entitled to receive,
pursuant to the Guarantee of such Guarantor, any payment or distribution
of any kind or character by such Guarantor on account of any of its
Obligations on its Guarantee; and
(2) any payment or distribution of assets of such Guarantor of any
kind or character, whether in cash, property or securities, by set-off or
otherwise, to which the Holders or the Trustee would be entitled but for
the subordination provisions of this Article 10 shall be paid by
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the liquidating trustee or agent or other Person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating
trustee or otherwise, directly to the holders of Guarantor Senior
Indebtedness of such Guarantor or their representative or representatives
or to the trustee or trustees under any indenture under which any
instruments evidencing any of such Guarantor Senior Indebtedness may have
been issued, ratably according to the aggregate amounts remaining unpaid
on account of such Guarantor Senior Indebtedness held or represented by
each, to the extent necessary to make payment in full in cash, Cash
Equivalents or, as acceptable to the Holders of such Guarantor Senior
Indebtedness of such Guarantor, in any other manner, of all such
Guarantor Senior Indebtedness remaining unpaid, after giving effect to
any concurrent payment or distribution to the holders of such Guarantor
Senior Indebtedness; and
(3) in the event that, notwithstanding the foregoing provisions of
this Section 10.07, the Trustee or the Holder of any Note shall have
received any payment or distribution of assets of such Guarantor of any
kind or character, whether in cash, property or securities,
including, without limitation, by way of set-off or otherwise, in respect
of any of its Obligations on its Guarantee before all Guarantor Senior
Indebtedness of such Guarantor is paid in full or payment thereof
provided for, then and in such event such payment or distribution shall
be paid over or delivered forthwith to the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee, agent or other Person
making payment or distribution of assets of such Guarantor for
application to the payment of all such Guarantor Senior Indebtedness
remaining unpaid, to the extent necessary to pay all of such Guarantor
Senior Indebtedness in full in cash, Cash Equivalents or, as acceptable
to the holders of such Guarantor Senior Indebtedness, any other manner,
after giving effect to any concurrent payment or distribution to or for
the holders of such Guarantor Senior Indebtedness.
The consolidation of a Guarantor with, or the merger of a Guarantor
with or into, another Person or the liquidation or dissolution of a Guarantor
following the conveyance, transfer or lease of its properties and assets
substantially as an entirety to another Person upon the terms and conditions
set forth in Article 5 hereof shall not be deemed a dissolution, winding-up,
liquidation, reorganization, assignment for the benefit of creditors or
marshaling of assets and liabilities of
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such Guarantor for the purposes of this Article 10 if the Person formed by such
consolidation or the surviving entity of such merger or the Person which
acquires by conveyance, transfer or lease such properties and assets
substantially as an entirety, as the case may be, shall, as a part of such
consolidation, merger, conveyance, transfer or lease, comply with the
conditions set forth in such Article 5 hereof.
Section 10.08. Suspension of Guarantee Obligations When Guarantor
Senior Indebtedness in Default.
(a) Unless Section 10.07 hereof shall be applicable, after the occurrence
of a Payment Default with respect to any Designated Senior Indebtedness which
constitutes Guarantor Senior Indebtedness, no payment or distribution of any
assets or securities of a Guarantor (or any Restricted Subsidiary or Subsidiary
of such Guarantor) of any kind or character (including, without limitation,
cash, property and any payment or distribution which may be payable or
deliverable by reason of the payment of any other Indebtedness of such
Guarantor being subordinated to its Obligations on its Guarantee) may be made
by or on behalf of such Guarantor (or any Restricted Subsidiary or Subsidiary
of such Guarantor), including, without limitation, by way of set-off or
otherwise, for or on account of its Obligations on its Guarantee, and neither
the Trustee nor any holder or owner of any Notes shall take or receive from any
Guarantor (or any Restricted Subsidiary or Subsidiary of such Guarantor),
directly or indirectly in any manner, payment in respect of all or any portion
of its Obligations on its Guarantee following the delivery by the
representative of the holders of , for so long as there shall exist any
Designated Senior Indebtedness under or in respect of the Credit Agreement, the
holders of Designated Senior Indebtedness under or in respect of the Credit
Agreement or, thereafter, the holders of Designated Senior Indebtedness which
constitutes Guarantor Senior Indebtedness (in either such case, the "Guarantor
Representative") to the Trustee of written notice of (i) the occurrence of a
Payment Default on Designated Senior Indebtedness or (ii) the occurrence of a
Non-Payment Event of Default on such Designated Senior Indebtedness and the
acceleration of the maturity of Designated Senior Indebtedness in accordance
with its terms, and in any such event, such prohibition shall continue until
such Payment Default is cured, waived in writing or ceases to exist or such
acceleration has been rescinded or otherwise cured. At such time as the
prohibition set forth in the preceding sentence shall no longer be in effect,
subject to the provisions of the following paragraph (b), such Guarantor shall
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resume making any and all required payments in respect of its Obligations under
its Guarantee.
(b) Unless Section 10.07 hereof shall be applicable, upon the occurrence of
a Non-Payment Event of Default on Designated Senior Indebtedness guaranteed by
a Guarantor (which guarantee constitutes Guarantor Senior Indebtedness of such
Guarantor), no payment or distribution of any assets of such Guarantor of any
kind or character (including, without limitation, cash, property and any
payment or distribution which may be payable or deliverable by reason of the
payment of any other Indebtedness of such Guarantor being subordinated to its
Obligations on its Guarantee) shall be made by such Guarantor, including,
without limitation, by way of set-off or otherwise, on account of any of its
Obligations on its Guarantee, and neither the Trustee nor any holder or owner
of any Notes shall take or receive from any Guarantor (or any Restricted
Subsidiary or Subsidiary of such Guarantor), directly or indirectly in any
manner, payment in respect of all or any portion of its Obligations on its
Guarantee for a period (the "Guarantee Payment Blockage Period") commencing on
the date of receipt by the Trustee of written notice from the Guarantor
Representative of such Non-Payment Event of Default, unless and until (subject
to any blockage of payments that may then be in effect under the preceding
paragraph (a)) the earliest to occur of the following events: (x) more than
179 days shall have elapsed since the date of receipt of such written notice by
the Trustee, (y) such Non-Payment Event of Default shall have been cured or
waived in writing or shall have ceased to exist or such Designated Senior
Indebtedness shall have been discharged or paid in full in cash or Cash
Equivalents or (z) such Guarantee Payment Blockage Period shall have been
terminated by written notice to such Guarantor or the Trustee from the
Guarantor Representative initiating such Guarantee Payment Blockage Period, or
the holders of at least a majority in principal amount of such issue of
Designated Senior Indebtedness, after which, in the case of clause (x), (y) or
(z), such Guarantor shall resume making any and all required payments in
respect of its Obligations on its Guarantee. Notwithstanding any other
provisions of this Indenture, no Non-Payment Event of Default with respect to
Designated Senior Indebtedness which existed or was continuing on the date of
the commencement of any Guarantee Payment Blockage Period initiated by the
Guarantor Representative shall be, or be made, the basis for the commencement
of a second Guarantee Payment Blockage Period initiated by the Guarantor
Representative unless such event of default shall have been cured or waived for
a period of not less than 90 consecutive days. In no event shall a Guarantee
Payment Blockage Period extend beyond 179
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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 such
payment shall be paid over and delivered forthwith to the Guarantor
Representative initiating the Guarantee Payment Blockage Period, in trust for
distribution to the holders of Guarantor Senior Indebtedness or, if no amounts
are then due in respect of Guarantor Senior Indebtedness, promptly returned to
the Guarantor, or as a court of competent jurisdiction shall direct.
Section 10.09. Subrogation to Rights of Holders of Guarantor Senior
Indebtedness.
Upon the payment in full of all amounts payable under or in respect of all
Guarantor Senior Indebtedness of a Guarantor, the Holders shall be subrogated
to the rights of the holders of such Guarantor Senior Indebtedness to receive
payments and distributions of cash, property and securities of such Guarantor
made on such Guarantor Senior Indebtedness until all amounts due to be paid
under the Guarantee shall be paid in full. For the purposes of such
subrogation, no payments or distributions to holders of Guarantor Senior
Indebtedness of any cash, property or securities to which Holders of the Notes
or the Trustee would be entitled except for the provisions of this Article 10,
and no payments over pursuant to the provisions of this Article 10 to holders
of Guarantor Senior Indebtedness by Holders of the Notes or the Trustee, shall,
as among each Guarantor, its creditors other than holders of Guarantor Senior
Indebtedness and the Holders of the Notes, be deemed to
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be a payment or distribution by such Guarantor to or on account of such
Guarantor Senior Indebtedness.
If any payment or distribution to which the Holders would otherwise have
been entitled but for the provisions of this Article 10 shall have been
applied, pursuant to the provisions of this Article 10, to the payment of all
amounts payable under Guarantor Senior Indebtedness, then and in such case, the
Holders shall be entitled to receive from the holders of such Guarantor Senior
Indebtedness at the time outstanding any payments or distributions received by
such holders of Guarantor Senior Indebtedness in excess of the amount
sufficient to pay all amounts payable under or in respect of such Guarantor
Senior Indebtedness in full in cash or Cash Equivalents.
Section 10.10. Guarantee Subordination Provisions Solely To Define
Relative Rights.
The subordination provisions of this Article 10 are and are intended
solely for the purpose of defining the relative rights of the Holders of the
Notes on the one hand and the holders of Guarantor Senior Indebtedness on the
other hand. Nothing contained in this Article 10 or elsewhere in this
Indenture or in the Notes is intended to or shall (a) impair, as among each
Guarantor, its creditors other than holders of its Guarantor Senior
Indebtedness and the Holders of the Notes, the obligation of such Guarantor,
which is absolute and unconditional, to make payments to the Holders in respect
of its Obligations on its Guarantee in accordance with its terms; or (b) affect
the relative rights against such Guarantor of the Holders of the Notes and
creditors of such Guarantor other than the holders of the Guarantor Senior
Indebtedness; or (c) prevent the Trustee or the Holder of any Note from
exercising all remedies otherwise permitted by applicable law upon a Default or
an Event of Default under this Indenture, subject to the rights, if any, under
this Article 10 of the holders of Guarantor Senior Indebtedness (1) in any
case, proceeding, dissolution, liquidation or other winding-up, assignment for
the benefit of creditors or other marshaling of assets and liabilities of the
Company referred to in Section 10.07 hereof, to receive, pursuant to and in
accordance with such Section, cash, property and securities otherwise payable
or deliverable to the Trustee or such Holder, or (2) under the conditions
specified in Section 10.08 hereof, to prevent any payment prohibited by such
Section or enforce their rights pursuant to Section 10.08(c) hereof.
The failure by any Guarantor to make a payment in respect of its
obligations on its Guarantee by reason of any pro-
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vision of this Article 10 shall not be construed as preventing the
occurrence of a Default or an Event of Default hereunder.
Section 10.01. Application of Certain Article 11 Provisions.
The provisions of Sections 11.04, 11.07, 11.08, 11.09, 11.10, 11.12 and
11.13 hereof shall apply, mutatis mutandis, to each Guarantor and their
respective holders of Guarantor Senior Indebtedness and the rights, duties and
obligations set forth therein shall govern the rights, duties and obligations
of each Guarantor, the holders of Guarantor Senior Indebtedness, the Holders
and the Trustee with respect to the Guarantee and all references therein to
Article 11 hereof shall mean this Article 10.
ARTICLE 11
SUBORDINATION OF NOTES
Section 11.01. Notes Subordinate to Senior Indebtedness.
The Company covenants and agrees, and each Holder of Notes, by its
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article 11, the Indebtedness
represented by the Notes and the payment of the principal of, premium, if any,
and interest on the Notes are hereby expressly made subordinate and subject in
right of payment as provided in this Article 11 to the prior payment in full in
cash or Cash Equivalents or, as acceptable to the holders of Senior
Indebtedness, in any other manner, of all Senior Indebtedness.
This Article 11 shall constitute a continuing offer to all Persons who, in
reliance upon such provisions, become holders of or continue to hold Senior
Indebtedness; and such provisions are made for the benefit of the holders of
Senior Indebtedness; and such holders are made obligees hereunder and they or
each of them may enforce such provisions.
Section 11.02. Payment Over of Proceeds upon Dissolution, etc.
In the event of (a) any insolvency or bankruptcy case or proceeding, or
any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to the Company or to its
creditors, as such, or to its
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assets, whether voluntary or involuntary or (b) any liquidation, dissolution or
other winding-up of the Company, whether voluntary or involuntary and whether
or not involving insolvency or bankruptcy, or (c) any general assignment for
the benefit of creditors or any other marshaling of assets or liabilities of
the Company, then and in any such event:
(1) the holders of Senior Indebtedness shall be entitled to receive
payment in full in cash or Cash Equivalents or, as acceptable to the
holders of Senior Indebtedness, in any other manner, of all amounts due
on or in respect of all Senior Indebtedness, or provision shall be made
for such payment, before the Holders of the Notes are entitled to receive
any payment or distribution of any kind or character on account of
principal of, premium, if any, or interest on the Notes; and
(2) any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, by set-off or
otherwise, to which the Holders or the Trustee would be entitled but for
the provisions of this Article 11 shall be paid by the liquidating
trustee or agent or other Person making such payment or distribution,
whether a trustee in bankruptcy, a receiver or liquidating trustee or
otherwise, directly to the holders of Senior Indebtedness or their
representative or representatives or to the trustee or trustees under any
indenture under which any instruments evidencing any of such Senior
Indebtedness may have been issued, ratably according to the aggregate
amounts remaining unpaid on account of the Senior Indebtedness held or
represented by each, to the extent necessary to make payment in full in
cash, Cash Equivalents or, as acceptable to the holders of Senior
Indebtedness, in any other manner, of all Senior Indebtedness remaining
unpaid, after giving effect to any concurrent payment or distribution, or
provision therefor, to the holders of such Senior Indebtedness; and
(3) in the event that, notwithstanding the foregoing provisions of
this Section 11.02, the Trustee or the Holder of any Note shall have
received any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, including, without
limitation, by way of set-off or otherwise, in respect of principal of,
is paid in full or payment thereof provided for, then and in such event
such payment or distribution shall be paid over or deliv-
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ered forthwith to the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee, agent or other Person making payment or distribution
of assets of the Company for application to the payment of all Senior
Indebtedness remaining unpaid, to the extent necessary to pay all Senior
Indebtedness in full in cash, Cash Equivalents or, as acceptable to the
holders of Senior Indebtedness, any other manner, after giving effect to
any concurrent payment or distribution, or provision therefor, to or for
the holders of Senior Indebtedness.
The consolidation of the Company with, or the merger of the Company with
or into, another Person or the liquidation or dissolution of the Company
following the conveyance, transfer or lease of its properties and assets
substantially as an entirety to another Person upon the terms and conditions
set forth in Article 5 hereof shall not be deemed a dissolution, winding-up,
liquidation, reorganization, assignment for the benefit of creditors or
marshaling of assets and liabilities of the Company for the purposes of this
Article 11 if the Person formed by such consolidation or the surviving entity
of such merger or the Person which acquires by conveyance, transfer or lease
such properties and assets substantially as an entirety, as the case may be,
shall, as a part of such consolidation, merger, conveyance, transfer or lease,
comply with the conditions set forth in such Article 5 hereof.
Section 11.03. Suspension of Payment When Senior Indebtedness in
Default.
(a) Unless Section 11.02 hereof shall be applicable, after the occurrence
of a Payment Default no payment or distribution of any assets or securities of
the Company or any Restricted Subsidiary of any kind or character (including,
without limitation, cash, property and any payment or distribution which may be
payable or deliverable by reason of the payment of any other Indebtedness of
the Company being subordinated to the payment of the Notes by the Company) may
be made by or on behalf of the Company or any Restricted Subsidiary, including,
without limitation, by way of set-off or otherwise, for or on account of
principal of, premium, if any, or interest on the Notes, or for or on account
of the purchase, redemption or other acquisition of the Notes, and neither the
Trustee nor any holder or owner of any Notes shall take or receive from
the Company or any Restricted Subsidiary, directly or indirectly in any manner,
payment in respect of all or any portion of Notes following the delivery by the
representative of , for so long as there shall exist any Designated Senior
Indebtedness under or in respect of the Credit Agreement, the holders of
Designated Senior Indebtedness under
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or in respect of the Credit Agreement or, thereafter, the holders of Designated
Senior Indebtedness (in either such case, the "Representative") to the Trustee
of written notice of (i) the occurrence of a Payment Default or Designated
Senior Indebtedness or (ii) the occurrence of a Non-Payment Event of Default on
Designated Senior Indebtedness and the acceleration of the maturity of
Designated Senior Indebtedness in accordance with its terms, and in any such
event, such prohibition shall continue until such Payment Default is cured,
waived in writing or ceases to exist or such acceleration has been rescinded or
otherwise cured. At such time as the prohibition set forth in the preceding
sentence shall no longer be in effect, subject to the provisions of the
following paragraph (b), the Company shall resume making any and all required
payments in respect of the Notes, including any missed payments.
(b) Unless Section 11.02 hereof shall be applicable, upon the occurrence of
a Non-Payment Event of Default on Designated Senior Indebtedness, no payment or
distribution of any assets or securities of the Company of any kind or
character (including, without limitation, cash, property and any payment or
distribution which may be payable or deliverable by reason of the payment of
any other Indebtedness of the Company being subordinated to the payment of the
Notes by the Company) shall be made by or on behalf of the Company, including,
without limitation, by way of set-off or otherwise, on account of any principal
of, premium, if any, or interest on the Notes or on account of the purchase,
redemption, defeasance or other acquisition of Notes, and neither the Trustee
nor any holder or owner of any Notes shall take or receive from the Company,
directly or indirectly in any manner, payment in respect of all or any portion
of the Notes, for a period ("Payment Blockage Period") commencing on the date
of receipt by the Trustee of written notice from the Representative of such
Non-Payment Event of Default unless and until (subject to any blockage of
payments that may then be in effect under the preceding paragraph (a)) the
earliest to occur of the following events: (x) more than 179 days shall have
elapsed since the date of receipt of such written notice by the Trustee, (y)
such Non-Payment Event of Default shall have been cured or waived in writing or
shall have ceased to exist or such Designated Senior Indebtedness shall have
been discharged or paid in full in cash or Cash Equivalents or (z) such Payment
Blockage Period shall have been terminated by written notice to the Company or
the Trustee from the Representative initiating such Payment Blockage Period, or
the holders of at least a majority in principal
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amount of such issue of Designated Senior Indebtedness, after which, in the
case of clause (x), (y) or (z), the Company shall resume making any and all
required payments in respect of the Notes, including any missed payments.
Notwithstanding any other provisions of this Indenture, no Non-Payment Event of
Default with respect to Designated Senior Indebtedness which existed or was
continuing on the date of the commencement of any Payment Blockage Period
initiated by the Representative shall be, or be made, the basis for the
commencement of a second Payment Blockage Period initiated by the
Representative unless such event of default shall have been cured or waived for
a period of not less than 90 consecutive days. In no event shall a Payment
Blockage Period extend beyond 179 days from the date of the receipt by the
Trustee of the notice referred to in this Section 11.03(b) (the "Initial
Blockage Period"). Any number of additional Payment Blockage Periods may be
commenced during the Initial Blockage Period; provided, however, that no such
additional Payment Blockage Period shall extend beyond the Initial Blockage
Period. After the expiration of the Initial Blockage Period, no Payment
Blockage Period may be commenced under this Section 11.03(b) and no Guarantee
Payment Blockage Period may be commenced under Section 10.08(b) hereof until at
least 180 consecutive days have elapsed from the last day of the Initial
Blockage Period.
(c) In the event that, notwithstanding the foregoing, the Trustee or the
Holder of any Note shall have received any payment prohibited by the foregoing
provisions of this Section 11.03, then and in such event such payment shall be
paid over and delivered forthwith to the Representative initiating the Payment
Blockage Period, in trust for distribution to the holders of Senior
Indebtedness or, if no amounts are then due in respect of Senior Indebtedness,
promptly returned to the Company, or otherwise as a court of competent
jurisdiction shall direct.
Section 11.04. Trustee's Relation to Senior Indebtedness.
With respect to the holders of Senior Indebtedness, the Trustee undertakes
to perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article 11, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be
read into this Indenture against the Trustee. The Trustee shall not be deemed
to owe any fiduciary duty to the holders of Senior Indebtedness and the Trustee
shall not be liable to any holder of Senior Indebtedness if it shall mistakenly
pay over or de-
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liver to Holders, the Company or any other Person moneys or assets to
which any holder of Senior Indebtedness shall be entitled by virtue of this
Article 11 or otherwise.
Section 11.05. Subrogation to Rights of Holders of Senior Indebtedness.
Upon the payment in full of all Senior Indebtedness, the Holders of the
Notes shall be subrogated to the rights of the holders of such Senior
Indebtedness to receive payments and distributions of cash, property and
securities applicable to the Senior Indebtedness until the principal of,
premium, if any and interest on the Notes shall be paid in full. For purposes
of such subrogation, no payments or distributions to the holders of Senior
Indebtedness of any cash, property or securities to which the Holders of the
Notes or the Trustee would be entitled except for the provisions of this
Article 11, and no payments over pursuant to the provisions of this Article 11
to the holders of Senior Indebtedness by Holders of the Notes or the Trustee,
shall, as among the Company, its creditors other than holders of Senior
Indebtedness and the Holders of the Notes, be deemed to be a payment or
distribution by the Company to or on account of the Senior Indebtedness.
If any payment or distribution to which the Holders would otherwise have
been entitled but for the provisions of this Article 11 shall have been
applied, pursuant to the provisions of this Article 11, to the payment of all
amounts payable under the Senior Indebtedness of the Company, then and in such
case the Holders shall be entitled to receive from the holders of such Senior
Indebtedness at the time outstanding any payments or distributions received by
such holders of such Senior Indebtedness in excess of the amount sufficient to
pay all amounts payable under or in respect of such Senior Indebtedness in full
in cash or Cash Equivalents.
Section 11.06. Provisions Solely To Define Relative Rights.
The provisions of this Article 11 are and are intended solely for the
purpose of defining the relative rights of the Holders of the Notes on the one
hand and the holders of Senior Indebtedness on the other hand. Nothing
contained in this Article or elsewhere in this Indenture or in the Notes is
intended to or shall (a) impair, as among the Company, its creditors other than
holders of Senior Indebtedness and the Holders of the Notes, the obligation of
the Company, which is absolute and unconditional, to pay to the Holders of the
Notes
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the principal of, premium, if any, and interest on the Notes as and when
the same shall become due and payable in accordance with their terms; or (b)
affect the relative rights against the Company of the Holders of the Notes and
creditors of the Company other than the holders of Senior Indebtedness; or (c)
prevent the Trustee or the Holder of any Note from exercising all remedies
otherwise permitted by applicable law upon a Default or an Event of Default
under this Indenture, subject to the rights, if any, under this Article 11 of
the holders of Senior Indebtedness (1) in any case, proceeding, dissolution,
liquidation or other winding-up, assignment for the benefit of creditors or
other marshaling of assets and liabilities of the Company referred to in
Section 11.02 hereof, to receive, pursuant to and in accordance with such
Section, cash, property and securities otherwise payable or deliverable to the
Trustee or such Holder, or (2) under the conditions specified in Section 11.03,
to prevent any payment prohibited by such Section or enforce their rights
pursuant to Section 11.03(c) hereof.
The failure to make a payment on account of principal of, premium, if any,
or interest on the Notes by reason of any provision of this Article 11 shall
not be construed as preventing the occurrence of a Default or an Event of
Default hereunder.
Section 11.07. Trustee To Effectuate Subordination.
Each Holder of a Note by his acceptance thereof authorizes and directs the
Trustee on his behalf to take, in the Trustee's sole discretion, such action as
may be necessary or appropriate to effectuate the subordination provided in
this Article and appoints the Trustee his attorney-in-fact for any and all such
purposes, including, in the event of any dissolution, winding-up,
liquidation or reorganization of the Company whether in bankruptcy, insolvency,
receivership proceedings, or otherwise, the timely filing of a claim for the
unpaid balance of the indebtedness of the Company owing to such Holder in the
form required in such proceedings and the causing of such claim to be approved.
If the Trustee does not file such a claim prior to 30 days before the
expiration of the time to file such a claim, the holders of Senior
Indebtedness, or any Representative, may file such a claim on behalf of Holders
of the Notes.
Section 11.08. No Waiver of Subordination Provisions.
(a) No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided
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shall at any time in any way be prejudiced or impaired by any act or failure to
act on the part of the Company or by any act or failure to act, in good faith,
by any such holder, or by any non-compliance by the Company with the terms,
provisions and covenants of this Indenture, regardless of any knowledge thereof
any such holder may have or be otherwise charged with.
(b) Without limiting the generality of subsection (a) of this Section
11.08, the holders of Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Notes, without incurring responsibility to the Holders of the Notes and without
impairing or releasing the subordination provided in this Article 11 or the
obligations hereunder of the Holders of the Notes to the holders of Senior
Indebtedness, do any one or more of the following: (1) change the manner,
place or terms of payment or extend the time of payment of, or renew or alter,
Senior Indebtedness or any instrument evidencing the same or any agreement
under which Senior Indebtedness is outstanding; (2) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing
Senior Indebtedness; (3) release any Person liable in any manner for the
collection or payment of Senior Indebtedness; and (4) exercise or refrain from
exercising any rights against the Company and any other Person; provided,
however, that in no event shall any such actions limit the right of the Trustee
or the Holders of the Notes to take any action to accelerate the maturity of
the Notes pursuant to Article 6 hereof or to pursue any rights or remedies
hereunder or under applicable laws if the taking of such action does not
otherwise violate the terms of this Indenture.
Section 11.09. Notice to Trustee.
(a) The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by
the Trustee at its Corporate Trust Office in respect of the Notes.
Notwithstanding the provisions of this Article 11 or any other provision of
this Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts which would prohibit the making of any payment to or by
the Trustee in respect of the Notes, unless and until the Trustee shall have
received written notice thereof from the Company or a holder of Senior
Indebtedness or from any trustee, fiduciary or agent therefor; and, prior to
the receipt of any such written notice, the Trustee, subject to the provisions
of this Section 11.09, shall be entitled in all respects to assume that no such
facts exist.
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(b) Subject to the provisions of Section 7.01 hereof, the Trustee shall be
entitled to rely on the delivery to it of a written notice to the Trustee and
the Company by a Person representing itself to be a holder of Senior
Indebtedness (or a trustee, fiduciary or agent therefor) to establish that such
notice has been given by a holder of Senior Indebtedness (or a trustee,
fiduciary or agent therefor); provided, however, that failure to give such
notice to the Company shall not affect in any way the right of the Trustee to
rely on such notice. In the event that the Trustee determines in good faith
that further evidence is required with respect to the right of any Person as a
holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Article 11, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article 11, and if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
Section 11.10. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets of the Company referred to in
this Article 11, the Trustee, subject to the provisions of Section 7.01 hereof,
and the Holders shall be entitled to rely upon any order or decree entered by
any court of competent jurisdiction in which such insolvency, bankruptcy,
receivership, liquidation, reorganization, dissolution, winding-up or similar
case or proceeding is pending, or a certificate of the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee for the benefit of
creditors, agent or other Person making such payment or distribution, delivered
to the Trustee or to the Holders, for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of Senior
Indebtedness and other Indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article 11.
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Section 11.11. Rights of Trustee as a Holder of Senior Indebtedness;
Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article 11 with respect to any Senior Indebtedness which may
at any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder. Nothing in this Article 11 shall apply to claims
of, or payments to, the Trustee under or pursuant to Section 7.07 hereof.
Section 11.12. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article 11 shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article 11 in addition to or in place of the Trustee.
Section 11.13. No Suspension of Remedies.
Nothing contained in this Article 11 shall limit the right of the Trustee
or the Holders of Notes to take any action to accelerate the maturity of the
Notes pursuant to Article 6 or to pursue any rights or remedies hereunder or
under applicable law, subject to the rights, if any, under this
Article 11 of the holders, from time to time, of Senior Indebtedness.
ARTICLE 12
MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this Indenture by the
TIA, the required provision shall control.
Section 12.02. Notices.
Any notice or communication shall be given in writing and delivered in
person, sent by facsimile, delivered by com-
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mercial courier service or mailed by first-class mail, postage prepaid,
addressed as follows:
If to the Company or any Guarantor:
Hayes Wheels International, Inc.
38481 Huron River Drive
Romulus, Michigan 48174
Attention: Chief Financial Officer
Copy to: Skadden, Arps, Slate, Meagher & Flom
One Rodney Square
Wilmington, Delaware 19801
Attention: Robert B. Pincus, Esq.
If to the Trustee:
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Attention: Denise Leonard
Fax Number: (212) 815-5915
The Company, the Guarantors or the Trustee by written notice to the others
may designate additional or different addresses for subsequent notices or
communications. Any notice or communication to the Company, the Trustee, or
the Guarantors shall be deemed to have been given or made as of the date so
delivered if personally delivered; when receipt is acknowledged, if telecopied;
and five (5) calendar days after mailing if sent by registered or certified
mail, postage prepaid (except that a notice of change of address shall not be
deemed to have been given until actually received by the addressee).
Any notice or communication mailed to a Noteholder shall be mailed to him
by first-class mail, postage prepaid, at his address shown on the register kept
by the Registrar.
Failure to mail a notice or communication to a Noteholder or any defect in
it shall not affect its sufficiency with respect to other Noteholders. If a
notice or communication to a Noteholder is mailed in the manner provided above,
it shall be deemed duly given, whether or not the addressee receives it.
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In case by reason of the suspension of regular mail service, or by
reason of any other cause, it shall be impossible to mail any notice as
required by this Indenture, then such method of notification as shall be made
with the approval of the Trustee shall constitute a sufficient mailing
of such notice.
Section 12.03. Communications by Holders with Other Holders.
Noteholders may communicate pursuant to TIA Section 312(b) with
other Noteholders with respect to their rights under this Indenture or the
Notes. The Company, the Guarantors, the Trustee, the Registrar and anyone else
shall have the protection of TIA Section 312(c).
Section 12.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company or any Guarantor to
the Trustee to take any action under this Indenture, the Company shall furnish
to the Trustee:
(1) an Officers' Certificate (which shall include the statements set
forth in Section 12.05 below) stating that, in the opinion of the
signers, all conditions precedent and covenants, if any, provided for in
this Indenture relating to the proposed action have been complied with;
and
(2) an Opinion of Counsel (which shall include the statements set
forth in Section 12.05 below) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been complied
with.
Section 12.05. Statements Required in Certificate and Opinion.
Each certificate and opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or
<PAGE> 113
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opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, it or he has
made such examination or investigation as is necessary to enable it or
him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such Person,
such covenant or condition has been complied with.
Section 12.06. When Treasury Notes Disregarded.
In determining whether the Holders of the required aggregate
principal amount of Notes have concurred in any direction, waiver or consent,
Notes owned by the Company, any Guarantor or any other obligor on the Notes
or by any Affiliate of any of them shall be disregarded, except that for the
purposes of determining whether the Trustee shall be protected in relying on
any such direction, waiver or consent, only Notes which a Trust Officer of the
Trustee actually knows are so owned shall be so disregarded. Notes so owned
which have been pledged in good faith shall not be disregarded if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to the Notes and that the pledgee is not the Company, a Guarantor
or any other obligor upon the Notes or any Affiliate of any of them.
Section 12.07. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at meetings of
Noteholders. The Registrar and Paying Agent may make reasonable rules for
their functions.
Section 12.08. Business Days; Legal Holidays.
A "Business Day" is a day that is not a Legal Holiday. A "Legal
Holiday" is a Saturday, a Sunday, a federally-recognized holiday or a day on
which banking institutions are not required to be open in the State of New
York. If a payment date is a Legal Holiday at a place of payment, payment may
be made at that place on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue for the intervening period.
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Section 12.09. Governing Law.
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS
MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE NOTES.
Section 12.10. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan,
security or debt agreement of the Company or any Subsidiary thereof. No such
indenture, loan, security or debt agreement may be used to interpret this
Indenture.
Section 12.11. No Recourse Against Others.
A director, officer, employee, stockholder or incorporator, as such, of
the Company shall not have any liability for any obligations of the Company
under the Notes or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creations. Each Noteholder by
accepting a Note waives and releases all such liability. Such waiver and
release are part of the consideration for the issuance of the Notes.
Section 12.12. Successors.
All agreements of the Company and the Guarantors in this Indenture and the
Notes shall bind their respective successors. All agreements of the Trustee,
any additional trustee and any Paying Agents in this Indenture shall bind its
successor.
Section 12.13. Multiple Counterparts.
The parties may sign multiple counterparts of this Indenture. Each signed
counterpart shall be deemed an original, but all of them together represent one
and the same agreement.
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Section 12.14. Table of Contents, Headings, etc.
The table of contents, cross-reference sheet and headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof, and shall in no way modify or
restrict any of the terms or provisions hereof.
Section 12.15. Separability.
Each provision of this Indenture shall be considered separable and if for
any reason any provision which is not essential to the effectuation of the
basic purpose of this Indenture or the Notes shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
<PAGE> 116
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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed, and the Company's corporate seal to be hereunto affixed and attested,
all as of the date and year first written above.
HAYES WHEELS INTERNATIONAL, INC.
By:_____________________________
Name:
Title:
ATTEST:
_________________________
Name:
Title:
Guarantors:
HAYES WHEELS INTERNATIONAL CALIFORNIA, INC.
HAYES WHEELS INTERNATIONAL GEORGIA, INC.
HAYES WHEELS INTERNATIONAL INDIANA, INC.
HAYES WHEELS INTERNATIONAL MEXICO, INC.
HAYES WHEELS INTERNATIONAL MICHIGAN, INC.
MOTOR WHEEL CORPORATION
MWC ACQUISITION SUB, INC.
By:_____________________________
Name:
Title:
ATTEST:
_________________________
Name:
Title:
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THE BANK OF NEW YORK
as Trustee
By: ____________________________________
Name:
Title:
<PAGE> 118
EXHIBIT A
[FORM OF FACE OF NOTE]
CUSIP 420804AC0
HAYES WHEELS INTERNATIONAL, INC.
No. [ ] $
9 1/8% SENIOR SUBORDINATED NOTE DUE 2007
HAYES WHEELS INTERNATIONAL, INC., a Delaware corporation (the "Company",
which term includes any successor corporation), for value received, promises to
pay to or registered assigns the principal sum of $
dollars on July 15, 2007.
Interest Payment Dates: January 15 and July 15, commencing January 15, 1998
Record Dates: January 1 and July 1.
Reference is made to the further provisions of this Note contained herein,
which will for all purposes have the same effect as if set forth at this place.
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IN WITNESS WHEREOF, the Company has caused this Note to be signed manually
or by facsimile by its duly authorized officers.
HAYES WHEELS INTERNATIONAL, INC.
By: ______________________________
Title:
By: ______________________________
Title:
Certificate of Authentication
This is one of the 9 1/8% Senior Subordinated Notes due 2007 referred to
in the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK,
as Trustee
By: __________________________
Authorized Signatory
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[FORM OF REVERSE OF NOTE]
HAYES WHEELS INTERNATIONAL, INC.
9 1/8% SENIOR SUBORDINATED NOTE DUE 2007
1. Interest. Hayes Wheels International, Inc., a Delaware corporation
(the "Company"), promises to pay, interest on the principal amount set forth on
the face hereof at a rate of 9 1/8% per annum. Interest hereon will accrue
from and including the most recent date to which interest has been paid or, if
no interest has been paid, from and including June 30, 1997 to but excluding
the date on which interest is paid. Interest shall be payable in arrears on
each January 15 and July 15 commencing January 15, 1998. Interest will be
computed on the basis of a 360-day year of twelve 30-day months. The Company
shall pay interest on overdue principal and on overdue interest (to the full
extent permitted by law) at a rate equal to the rate of interest otherwise
payable on the Notes.
2. Method of Payment. The Company will pay interest hereon (except
defaulted interest) to the Persons who are registered holders (the "Holders")
at the close of business on January 1 or July 1 next preceding the interest
payment date (whether or not a Business Day). Holders must surrender Notes to
a Paying Agent to collect principal payments. The Company will pay principal
and interest in money of the United States of America that at the time of
payment is legal tender for payment of public and private debts. Interest may
be paid by check mailed to the Holder entitled thereto at the address indicated
on the register maintained by the Registrar for the Notes.
3. Paying Agent and Registrar. Initially, The Bank of New York (the
"Trustee") will act as a Paying Agent and Registrar. The Company may change
any Paying Agent or Registrar without notice to the Holders. Neither the
Company nor any of its Affiliates may act as Paying Agent or Registrar.
4. Indenture. The Company issued the Notes under an Indenture dated as of
June 30, 1997 (the "Indenture") among the Company, the Guarantors (as defined
in the Indenture) and the Trustee. This is one of an issue of Notes of the
Company issued, or to be issued, under the Indenture. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S. Code Section Section
77aaa-77bbbb), as amended from time to time. The Notes are subject to all such
terms, and Holders are
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0000000000
referred to the Indenture and such Act for a statement of them. Capitalized
and certain other terms used herein and not otherwise defined have the meanings
set forth in the Indenture. The Notes are obligations of the Company limited
in aggregate principal amount to $250.0 million.
5. Optional Redemption. The Notes will be redeemable at the option of the
Company, in whole or in part, at any time on or after July 15, 2002 upon not
less than 30 nor more than 60 days' notice, at the redemption prices (expressed
as percentages of principal amount), set forth below, together, in each case,
with accrued and unpaid interest to the Redemption Date, if redeemed during the
twelve month period beginning on July 15 of each year listed below:
Year Redemption Price
---- ----------------
2002 .......................................... 104.563%
2003 .......................................... 103.042%
2004 .......................................... 101.521%
2005 and thereafter ........................... 100.000%
Notwithstanding the foregoing, the Company may redeem in the aggregate up
to 35% of the original principal amount of Notes at any time and from time to
time on or prior to July 15, 2000 at a redemption price equal to 109.125% of
the aggregate principal amount so redeemed, plus accrued and unpaid interest
thereon to the Redemption Date with the Net Proceeds of one or more Equity
Offerings; provided, that at least $162.5 million of the principal amount of
Notes originally issued remains outstanding immediately after the occurrence of
any such redemption and that any such redemption occurs within 60 days
following the closing of any such Equity Offering.
6. Notice of Redemption. Notice of redemption will be mailed at least 30
days but not more than 60 days before the Redemption Date to each Holder whose
Notes are to be redeemed at his registered address. On and after the
Redemption Date, unless the Company defaults in making the redemption payment,
interest ceases to accrue on Notes or portions thereof called for redemption.
7. Offers to Purchase. The Indenture provides that upon the occurrence of
a Change of Control or an Asset Sale and subject to further limitations
contained therein, the Company shall make an offer to purchase outstanding
Notes in accordance with the procedures set forth in the Indenture.
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8. Registration Rights. Pursuant to a Registration Rights Agreement among
the Company, the Guarantors and the Initial Purchasers, the Company will be
obligated to consummate an exchange offer pursuant to which the Holders shall
have the right to exchange this Note for notes of a separate series issued
under the Indenture (or a trust indenture substantially identical to the
Indenture in accordance with the terms of the Registration Rights Agreement)
which have been registered under the Securities Act, in like principal amount
and having identical terms in all material respects as the Notes. The Holders
shall be entitled to receive certain additional interest payments in the event
such exchange offer is not consummated and upon certain other conditions, all
pursuant to and in accordance with the terms of the Registration Rights
Agreement.
9. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. A
Holder may transfer or exchange Notes in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay to it any taxes and fees
required by law or permitted by the Indenture. The Registrar need not register
the transfer of or exchange any Notes or portion of a Note selected for
redemption, or register the transfer of or exchange any Notes for a period of
15 days before a mailing of notice of redemption.
10. Persons Deemed Owners. The registered Holder of this Note may be
treated as the owner of this Note for all purposes.
11. Unclaimed Money. If money for the payment of principal or interest
remains unclaimed for two years, the Trustee will pay the money back to the
Company at its written request. After that, Holders entitled to the money must
look to the Company for payment as general creditors unless an "abandoned
property" law designates another Person.
12. Amendment, Supplement, Waiver, Etc. The Company, the Guarantors and
the Trustee (if a party thereto) may, without the consent of the Holders of any
outstanding Notes, amend, waive or supplement the Indenture or the Notes for
certain specified purposes, including, among other things, curing ambiguities,
defects or inconsistencies, maintaining the qualification of the Indenture
under the Trust Indenture Act of 1939, as amended, and making any change that
does not materially and adversely affect the rights of any Holder. Other
amendments and modifications of the Indenture or the Notes may
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be made by the Company, the Guarantors and the Trustee with the consent of the
Holders of not less than a majority of the aggregate principal amount of the
outstanding Notes, subject to certain exceptions requiring the consent of the
Holders of the particular Notes to be affected.
13. Restrictive Covenants. The Indenture imposes certain limitations on
the ability of the Company and its Restricted Subsidiaries to, among other
things: (i) incur additional Indebtedness; (ii) pay dividends and make
distributions; (iii) issue stock of subsidiaries; (iv) make certain
investments; (v) repurchase stock; (vi) create liens; (vii) enter into
transactions with affiliates; (viii) merge or consolidate the Company or the
Guarantors; and (ix) transfer or sell assets. Such limitations are subject to
a number of important qualifications and exceptions. Pursuant to Section 4.04
of the Indenture, the Company must annually report to the Trustee on compliance
with such limitations.
14. Successor Corporation. When a successor corporation assumes all the
obligations of its predecessor under the Notes and the Indenture and the
transaction complies with the terms of Article 5 of the Indenture, the
predecessor corporation will, except as provided in Article 5, be released from
those obligations.
15. Defaults and Remedies. Events of Default are set forth in the
Indenture. Subject to certain limitations in the Indenture, if an Event of
Default (other than an Event of Default specified in Section 6.01(6) or (7) of
the Indenture with respect to the Company) occurs and is continuing, the
Trustee or the Holders of not less than 25% in aggregate principal amount of
the outstanding Notes may, by written notice to the Trustee and the Company,
and the Trustee upon the request of the Holders of not less than 25% in
aggregate principal amount of the outstanding Notes shall, declare all
principal of and accrued interest on all Notes to be immediately due and
payable and (i) such amounts shall become immediately due and payable or (ii)
if there are any amounts outstanding under or in respect of the Amended Credit
Agreement, such amounts shall become due and payable upon the first to occur of
an acceleration of amounts outstanding under or in respect of the Amended
Credit Agreement or five Business Days after receipt by the Company and the
representative of the holders of Indebtedness under or in respect of the
Amended Credit Agreement, of notice of the acceleration of the Notes. If an
Event of Default specified in Section 6.01(6) or (7) of the Indenture occurs
with respect to the Company, the principal amount of and inter-
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est on, all Notes shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder.
Holders may not enforce the Indenture or the Notes except as provided in the
Indenture. The Trustee may require indemnity satisfactory to it before it
enforces the Indenture or the Notes. Subject to certain limitations, Holders
of a majority in principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders notice of any continuing default (except a default in payment of
principal or interest) if it determines that withholding notice is in their
interests. The Company and each Guarantor must furnish an annual compliance
certificate to the Trustee.
16. Trustee Dealings with Company. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not Trustee.
17. No Recourse Against Others. No director, officer, employee
incorporator or stockholder, of the Company or any Guarantor shall have any
liability for any obligations of the Company or the Guarantors under the Notes,
the Indenture or the Guarantees or for a claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of Notes by
accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Notes.
18. Discharge. The Company's obligations pursuant to the Indenture will
be discharged, except for obligations pursuant to certain sections thereof,
subject to the terms of the Indenture, upon the payment of all the Notes or
upon the irrevocable deposit with the Trustee of United States dollars
sufficient to pay when due principal of and interest on the Notes to maturity
or redemption, as the case may be.
19. Guarantees. The Note will be entitled to the benefits of certain
Guarantees made for the benefit of the Holders. Reference is hereby made to
the Indenture for a statement of the respective rights, limitations of rights,
duties and obligations thereunder of the Guarantors, the Trustee and the
Holders.
20. Authentication. This Note shall not be valid until the Trustee signs
the certificate of authentication on the other side of this Note.
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<PAGE> 125
21. Governing Law. THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL
GOVERN THIS NOTE WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS. The
Trustee, the Company, the Guarantor and the Holders agree to submit to the
jurisdiction of the courts of the State of New York in any action or proceeding
arising out of or relating to the Indenture or the Notes.
22. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TENANT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
23. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to the Holders. No representation is
made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and Registration Rights Agreement. Requests may
be made to:
HAYES WHEELS INTERNATIONAL, INC.
38481 Huron River Drive
Romulus, Michigan 48174
Attention: Chief Financial Officer
A-8
<PAGE> 126
ASSIGNMENT
I or we assign and transfer this Note to:
(Insert assignee's social security or tax I.D. number)
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
(Print or type name, address and zip code of assignee)
and irrevocably appoint:
__________________________________________________________
__________________________________________________________
Agent to transfer this Note on the books of the Company. The Agent may
substitute another to act for him.
Date: ___________
Signature:
_______________________________
(Sign exactly as your name appears on the
face of this Note)
Signature Guarantee:
A-9
<PAGE> 127
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have all or any part of this Note purchased by the
Company pursuant to Section 4.15 or Section 4.20 of the Indenture, check the
appropriate box:
_ Section 4.15 _ Section 4.20
If you want to have only part of the Note purchased by the Company
pursuant to Section 4.15 or Section 4.20 of the Indenture, state the amount you
elect to have purchased:
$____________________
(multiple of $1,000)
Date: ________________
Your Signature: _____________________________
(Sign exactly as your name appears on the face
of this Note)
_________________________
Signature Guaranteed
A-10
<PAGE> 128
EXHIBIT B
[FORM OF PRIVATE PLACEMENT LEGEND]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS
SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A)
IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE ACT)
OR (B) IT IS AN "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3)
OR (7) UNDER THE ACT) (AN "ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON
AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL
NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS NOTE RESELL OR
OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY
THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE ACT, (C) INSIDE THE UNITED STATES TO AN
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED
ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS
ON TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE
TRUSTEE), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE ACT, (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE ACT (IF AVAILABLE) OR (F) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, AND (3) AGREES THAT IT
WILL GIVE TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF
THIS NOTE WITHIN TWO YEARS AFTER ORIGINAL ISSUANCE OF THIS NOTE, IF THE
PROPOSED TRANSFEREE IS AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM OR IN A
TRANSACTION NOT SUBJECT TO THE REGISTRATION REQUIREMENTS OF THE ACT. AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON"
HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE ACT.
B-1
<PAGE> 129
EXHIBIT C-1
[FORM OF ASSIGNMENT FOR 144A NOTE]
I or we assign and transfer this Note to:
(Insert assignee's social security or tax I.D. number)
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
(Print or type name, address and zip code of assignee)
and irrevocably appoint:
___________________________________________________________
___________________________________________________________
Agent to transfer this Note on the books of the Company. The Agent may
substitute another to act for him.
[Check One]
[ ] (a) this Note is being transferred in compliance with the exemption
from registration under the Securities Act provided by Rule 144A
thereunder.
or
[ ] (b) this Note is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the conditions
of transfer set forth in this Note and the Indenture.
If none of the foregoing boxes is checked, the Trustee or Registrar shall not
be obligated to register this Note in the name of any person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.15 of the Indenture shall have
been satisfied.
Date:__________________ Your Signature:______________________
________________________________
(Sign exactly as your name
appears on the other side of
this Note)
Signature Guarantee: ________________________________
C-1-1
<PAGE> 130
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this Note
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated: __________________ ____________________________
NOTICE: To be executed by
an executive officer
C-1-2
<PAGE> 131
EXHIBIT C-2
[FORM OF ASSIGNMENT FOR REGULATION S NOTE]
I or we assign and transfer this Note to:
(Insert assignee's social security or tax I.D. number)
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
(Print or type name, address and zip code of assignee)
and irrevocably appoint:
______________________________________________________________
______________________________________________________________
Agent to transfer this Note on the books of the Company. The Agent may
substitute another to act for him.
[Check One]
[ ] (a) this Note is being transferred in compliance with the exemption
from registration under the Securities Act provided by Rule 144A
thereunder.
or
[ ] (b) this Note is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the conditions
of transfer set forth in this Note and the Indenture.
If none of the foregoing boxes is checked, the Trustee or Registrar shall not
be obligated to register this Note in the name of any person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.15 of the Indenture shall have
been satisfied.
Date: __________________ Your Signature: ________________
_________________________________
(Sign exactly as your name
appears on the other side of
this Note)
Signature Guarantee: ____________________________________
C-2-1
<PAGE> 132
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this Note
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated: __________________ ________________________
NOTICE: To be executed by
an executive officer
C-2-2
<PAGE> 133
EXHIBIT D
[FORM OF LEGEND FOR GLOBAL NOTE]
Any Global Note authenticated and delivered hereunder shall bear a legend
(which would be in addition to any other legends required in the case of a
Restricted Note) in substantially the following form:
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A
DEPOSITORY. THIS NOTE IS NOT EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF
A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER
THAN A TRANSFER OF THIS NOTE AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE
DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (A NEW YORK CORPORATION) ("DTC") TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
D-1
<PAGE> 134
EXHIBIT E
Form of Certificate to Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
___________, ____
[Trustee]
[Address]
Attention:
Re: Hayes Wheels International, Inc. (the "Company")
9 1/8% Senior Notes due 2007 (the "Notes")
Dear Sirs:
In connection with our proposed purchase of Notes, we confirm that:
1. We understand that any subsequent transfer of the Notes is
subject to certain restrictions and conditions set forth in the Indenture
dated as of June 30, 1997 relating to the Notes and we agree to be bound
by, and not to resell, pledge or otherwise transfer the Notes except in
compliance with, such restrictions and conditions and the Securities Act
of 1933, as amended (the "Securities Act").
2. We understand that the Notes have not been registered under the
Securities Act or any other applicable securities laws, have not been and
will not be qualified for sale under the securities laws of any non-U.S.
jurisdiction, and that the Notes may not be offered, sold, pledged or
otherwise transferred except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are
acting as hereinafter stated, that if we should sell any Notes, we will
do so only (i) to the Company or any subsidiary thereof, (ii) in
accordance with Rule 144A under the Securities Act to a "qualified
institutional buyer" (as defined in Rule 144A), (iii) to an institutional
"accredited investor" (as defined below) that, prior to such transfer,
furnishes (or has furnished on its behalf by a U.S. broker-dealer) to you
a signed letter containing certain representations and
E-1
<PAGE> 135
agreements relating to the restrictions on
transfer of the Notes, (iv) outside the United States to foreign
purchasers in offshore transactions meeting the requirements of Rule 904
of Regulation S under the Securities Act, (v) pursuant to the exemption
from registration provided by Rule 144 under the Securities Act (if
available), or (vi) pursuant to an effective registration statement under
the Securities Act, and we further agree to provide to any person
purchasing any of the Notes from us a notice advising such purchaser that
resales of the Notes are restricted as stated herein.
3. We understand that, on any proposed resale of any Notes, we will
be required to furnish to you and the Company such certifications, legal
opinions and other information as you and the Company may reasonably
require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Notes purchased by us will
bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act) and have such
knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the
Notes, and we and any accounts for which we are acting each are able to
bear the economic risk of our or their investment, as the case may be.
5. We are acquiring the Notes purchased by us for our account or for
one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By: ____________________
Authorized Signature
E-2
<PAGE> 136
EXHIBIT F
Form of Certificate to Be Delivered
in Connection with Transfers
Pursuant to Regulation S
__________, ____
[Trustee]
[Address]
Attention:
Re: Hayes Wheels International, Inc.
(the "Company") 9 1/8% Senior Notes
due 2007 (the "Notes")
Dear Sirs:
In connection with our proposed sale of $__________ aggregate principal
amount of the Notes, we confirm that such sale has been effected pursuant to
and in accordance with Regulation S under the U.S. Securities Act of 1933, as
amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Notes was not made to a U.S. person or to a
person in the United States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
F-1
<PAGE> 137
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Notes.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Terms used in this certificate
have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By: __________________________
Authorized Signature
F-2
<PAGE> 138
EXHIBIT G
[FORM OF GUARANTEE]
Each of the undersigned (the "Guarantors") hereby jointly and severally
unconditionally guarantees, to the extent set forth in the Indenture dated as
of June 30, 1997 by and among Hayes Wheels International, Inc., as issuer, the
Guarantors, as guarantors, and The Bank of New York, as Trustee (as amended,
restated or supplemented from time to time, the "Indenture"), and subject to
the provisions of the Indenture, (a) the due and punctual payment of the
principal of, and premium, if any, and interest on the Notes, when and as the
same shall become due and payable, whether at maturity, by acceleration or
otherwise, the due and punctual payment of interest on overdue principal,
premium and, to the extent permitted by law, interest, and the due and punctual
performance of all other obligations of the Company to the Noteholders or the
Trustee, all in accordance with the terms set forth in Article 10 of the
Indenture, and (b) in case of any extension of time of payment or renewal of
any Notes or any of such other obligations, that the same will be promptly paid
in full when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise.
The obligations of the Guarantors to the Noteholders and to the Trustee
pursuant to this Guarantee and the Indenture are expressly set forth in Article
10 of the Indenture and reference is hereby made to the Indenture for the
precise terms and limitations of this Guarantee.
HAYES WHEELS INTERNATIONAL-
CALIFORNIA, INC.
HAYES WHEELS INTERNATIONAL-
GEORGIA, INC.
HAYES WHEELS INTERNATIONAL-
INDIANA, INC.
HAYES WHEELS INTERNATIONAL-
MEXICO, INC.
HAYES WHEELS INTERNATIONAL-
MICHIGAN, INC.
MOTOR WHEEL CORPORATION
MWC ACQUISITION SUB, INC.
By: ___________________________
Name:
Title:
<PAGE> 1
CERTIFICATE OF DESIGNATIONS
OF
SERIES A CONVERTIBLE PARTICIPATING PREFERRED STOCK
OF
HAYES WHEELS INTERNATIONAL, INC.
---------------------
Pursuant to Section 151 of the General
Corporation Law of the State of Delaware
---------------------
The undersigned DOES HEREBY CERTIFY that the following
resolution was duly adopted by the Board of Directors of Hayes Wheels
International, Inc., a Delaware corporation (the "Corporation"), at a meeting
duly convened and held at which a quorum was present and acting throughout:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of the Corporation in accordance with the provisions of Article
Fourth of the Corporation's Restated Certificate of Incorporation, a new series
of Preferred Stock of the Corporation is hereby created and designated as the
Series A Convertible Participating Preferred Stock.
The designation, amount, voting powers, preferences and rights, of the
shares of the Series A Convertible Participating Preferred Stock, and the
qualifications, limitations or restrictions thereof are as set forth below.
1. Designation and Amount. Five Million (5,000,000) shares of Series
A Convertible Participating Preferred Stock, par value $.01 per share, are
hereby constituted as a series thereof having the designation
<PAGE> 2
Series A Convertible Participating Preferred Stock (the "Series A Preferred
Stock").
2. Rank. The Series A Preferred Stock shall, with respect to rights
upon liquidation, winding up and dissolution, rank senior to the Corporation's
Common Stock, par value $.01 per share (the "Common Stock"), and to all other
classes and series of stock of the Corporation now or hereafter authorized,
issued or outstanding. All shares of the Series A Preferred Stock shall be of
equal rank with each other with respect to rights upon liquidation, winding up
and dissolution pursuant to Section 5 hereof.
3. Voting Rights. Except as specifically required by law, the holders
of Series A Preferred Stock shall have no voting powers whatsoever.
4. Dividends and Distributions. When, as and if any dividend or
distribution (including by means of a reclassification of the outstanding
shares of Common Stock) is declared upon the Common Stock, whether payable in
cash or property (other than in shares of Common Stock), the holder of each
share of Series A Preferred Stock shall be entitled to receive, out of funds or
property, as the case may be, legally available for that purpose, an amount of
cash or property equal to the amount of such cash or property payable or
distributable with respect to the number of shares of Common Stock that the
holder of such share of Series A Preferred Stock would have owned had such
share of Series A Preferred Stock been converted into Common Stock on the
record date for such dividend or distribution.
5. Liquidation. In the event of any liquidation, dissolution or
winding up of the affairs of the Corporation, whether voluntary or involuntary,
before any payment or distribution of the assets of the Corporation shall be
made to or set apart for the holders of any other shares of capital stock of
the Corporation, the holders of Series A Preferred Stock shall be entitled to
receive, out of the assets of the Corporation, whether such assets are capital
or surplus, $.05 per share (the "Liquidation Preference Amount"). If, upon any
liquidation, dissolution or winding up of the affairs of the Corporation, the
assets of the Corporation shall be insufficient to pay or distribute in full
the Liquidation Preference Amount aforesaid, then such assets shall be paid or
distributed among the holders of Series A Preferred Stock so that an equal
amount (rounded to the
2
<PAGE> 3
nearest whole cent) is paid or distributed with respect to each outstanding
share of Series A Preferred Stock. For purposes of this Section 5, a
consolidation or merger of the Corporation with one or more corporations shall
not be deemed to be a liquidation, dissolution or winding up. All payments of
the Liquidation Preference Amount shall be made pro rata among the holders of
the then outstanding shares of Series A Preferred Stock.
After payment or distribution of the Liquidation Preference Amount
shall have been made in full to the holders of the Series A Preferred Stock as
provided in this Section 5, all remaining assets of the Corporation shall be
paid or distributed to the holders of shares of capital stock of the
Corporation in accordance with the respective terms and conditions applicable
thereto; provided that the holders of Series A Preferred Stock shall share
ratably in any amounts available for payment or distribution, and required to
be paid or distributed, to holders of Common Stock as though each share of
Series A Preferred Stock held by each such holder had been converted into
Common Stock on the record date for such payment or distribution.
6. Conversion.
(a) Conversion and Effect. Each outstanding share of Series A
Preferred Stock shall be automatically converted (the "Conversion"), without
any further act of the Corporation or any stockholder, into one (as the same
may be adjusted pursuant to the provisions of Section 7 hereof, the "Conversion
Rate") duly authorized, validly issued, fully paid and nonassessable share of
Common Stock, immediately upon the later to occur of (i) the expiration or
termination of any applicable waiting period under Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and (ii) the approval of the issuance of
such Common Stock by the requisite vote of the stockholders of the Corporation
entitled to vote thereon (the "Stockholder Approval"). The Conversion shall be
deemed to have occurred immediately following, and on the date of, the
Stockholder Approval (the "Conversion Date"). Effective immediately upon the
occurrence of the Conversion, with respect to any holder of Series A Preferred
Stock, (i) certificates theretofore evidencing shares of Series A Preferred
Stock owned by such holder shall be deemed to evidence that number of shares of
Common Stock issuable upon the Conversion of such shares of Series A Preferred
Stock and (ii) such holder shall be deemed to have become the holder of such
shares of Common
3
<PAGE> 4
Stock and from and after such time shall have no rights as a holder of Series A
Preferred Stock.
(b) Procedures. Promptly after the Conversion Date, the Corporation
shall give notice (the "Conversion Notice") to all holders of the shares of
Series A Preferred Stock (i) stating that all of the issued and outstanding
shares of Series A Preferred Stock have been converted, at the Conversion Rate,
into duly authorized, validly issued, fully paid and nonassessable shares of
Common Stock, and (ii) instructing such holders as to the procedures to be
followed to effect the exchange of certificates formerly evidencing shares of
Series A Preferred Stock for certificates evidencing shares of Common Stock.
Promptly after receipt from a holder of Series A Preferred Stock of any
certificate evidencing shares of Series A Preferred Stock, which certificate
shall have been delivered in the manner set forth in the Conversion Notice, the
Corporation shall issue and deliver to such holder a certificate or
certificates evidencing the number of shares of Common Stock to which such
holder is entitled.
(c) The Corporation shall at all times reserve and keep available out
of its authorized and unissued Common Stock or treasury shares, solely for
issuance upon the Conversion as herein provided, free from any preemptive
rights, such number of shares of Common Stock as shall be issuable upon the
Conversion.
7. Antidilution Adjustments.
(a) In the event that the Corporation shall, at any time or from time
to time while the shares of Series A Preferred Stock are outstanding, (i)
declare a dividend or distribution on the Common Stock in shares of Common
Stock, (ii) subdivide the outstanding shares of Common Stock into a greater
number of shares or (iii) combine the outstanding shares of Common Stock into a
smaller number of shares, in each case, whether by reclassification of shares,
recapitalization of the Corporation (including a recapitalization effected by a
merger or consolidation) or otherwise, the Conversion Rate in effect shall be
proportionately adjusted so that the holder of any share of Series A Preferred
Stock converted after the earlier of the record date and the effective date of
any of such events shall be entitled to receive, upon the Conversion, the
number of shares of Common Stock that such holder would have been entitled to
receive had such
4
<PAGE> 5
Series A Preferred Stock been converted immediately prior to such record date
or effective date.
(b) In case of any consolidation or merger of the Corporation with
another person as a result of which the Series A Preferred Stock is not
automatically converted pursuant to Section 7(a), each share of Series A
Preferred Stock shall thereafter be convertible only into the number of shares
of stock or other securities or property, including cash, to which a holder of
the number of shares of Common Stock of the Corporation deliverable upon
conversion of such share of the Series A Preferred Stock would have been
entitled upon such consolidation or merger had such share of Series A Preferred
Stock been converted immediately prior to the effective date of such event;
and, in any such case, appropriate adjustments shall be made in the application
of the provisions herein set forth with respect to the rights and interests
thereafter of the holders of the Series A Preferred Stock to the end that the
provisions set forth herein (including provisions with respect to changes in
and other adjustments of the Conversion Rate) shall thereafter be applicable,
as nearly as may be reasonable, in relation to any shares of stock or other
securities thereafter deliverable upon the conversion of the shares of Series A
Preferred Stock.
(c) Notwithstanding any other provisions of this Section 7, until the
effective date of the Conversion, the Corporation shall not be required to make
any adjustment to the Conversion Rate unless such adjustment (plus any
adjustments not previously made by reason of this paragraph (c)) would require
an increase or decrease of at least one percent (1%) in the number of shares of
Common Stock into which each share of Series A Preferred Stock is then
convertible. Any lesser adjustment shall be carried forward and shall be made
(i) no later than the time of, and together with, the next subsequent
adjustment which, together with any adjustment or adjustments so carried
forward, shall amount to an increase or decrease of at least one percent (1%)
or (ii) at the effective date of the Conversion, whichever is earlier. All
adjustments shall be carried out to five decimal places.
(d) The Conversion Rate shall, subject to Section 7(c), be adjusted,
cumulatively, for each and every event set forth in Section 7(a) or 7(b)
occurring prior to the effective date of the Conversion.
5
<PAGE> 6
(e) Whenever one or more adjustments to the Conversion Rate are
required by the provisions of this Section 7, the Corporation shall forthwith
place on file with the transfer agent, if any, for the Common Stock and the
Series A Preferred Stock, and with the Secretary of the Corporation, a
statement signed by two officers of the Corporation stating the adjusted
Conversion Rate. Such statement shall set forth in reasonable detail such
facts as shall be necessary to show the reason and the manner of computing each
such adjustment. Promptly after each adjustment to the Conversion Rate, the
Corporation shall mail a notice thereof to each holder of shares of Series A
Preferred Stock containing a brief description of the transaction causing such
adjustment and the resulting Conversion Rate.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Designations to be signed in its name and on its behalf as of this 24th day of
June, 1997 by a duly authorized officer of the Corporation.
HAYES WHEELS INTERNATIONAL, INC.
By: /s/ Daniel M. Sandberg
-------------------------------
Name: Daniel M. Sandberg
Title: Secretary
6
<PAGE> 1
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
This AMENDED AND RESTATED STOCKHOLDERS AGREEMENT ("Agreement"), dated
as of June 30, 1997, 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"), TSG Capital Fund II, L.P., a Delaware limited
partnership ("TSG"), and Marianne Lemmerz, Inge Kruger-Pressl, Renate
Kukwa-Lemmerz and Horst Kukwa-Lemmerz (each a "Lemmerz Stockholder" and,
collectively, the "Lemmerz Stockholders") (JLL, Chase, Argosy, Nomura, TSG and
the Lemmerz Stockholders, 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 (other than the Lemmerz Stockholders), MWC
Holdings, Inc., a Delaware corporation ("Holdings"), and the Company
("Subscription Agreements"), each Stockholder (other than the Lemmerz
Stockholders) 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) ("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 was merged with and into the Company on July 2, 1996 (the
"Merger");
WHEREA, 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 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 Company Common Stock;
WHEREAS, as a result of the Merger, each Stockholder (other than the
Lemmerz Stockholders) owns (i) the number of shares of 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;
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WHEREAS, in connection with the Merger, the Company and each
Stockholder (other than the Lemmerz Stockholders) entered into the Stockholders'
Agreement, dated as of July 2, 1996, as amended as of April 8, 1997 (as so
amended, the "Stockholders Agreement");
WHEREAS, pursuant to the Purchase Agreement dated June 6, 1997 among
the Company, an Affiliate of the Company, Lemmerz Holding and the Lemmerz
Stockholders (the "Acquisition Agreement"), the Company and such Affiliate
indirectly are, simultaneously herewith, acquiring (the "Acquisition") from the
Lemmerz Stockholders all of the capital stock (the "Acquired Shares") of Lemmerz
Holding GmbH, a limited liability company organized under the laws of the
Federal Republic of Germany ("Lemmerz Holding");
WHEREAS, as partial consideration for the purchase of the Acquired
Shares, at the closing of the Acquisition, the Company is delivering to the
Lemmerz Stockholders an aggregate of 5,000,000 shares of Series A Preferred
Stock, par value $.01 per share, of the Company ("Company Preferred Stock"),
each of which will be automatically converted into one share of Company Common
Stock (subject to adjustment) upon receipt of approval by the holders of Company
Common Stock;
WHEREAS, as a result of the Acquisition, each Lemmerz Stockholder now
owns the number of shares of Company Preferred Stock set forth opposite such
Lemmerz Stockholder's name on Exhibit B hereto; and
WHEREAS, in connection with the Acquisition, the Company and each
Stockholder desire to amend and restate the Stockholders Agreement, and each
Stockholder desires to enter into this Agreement, all in accordance with the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants 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:
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(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 "First Indenture" shall mean the Indenture, dated as
of July 2, 1996, as the same may be amended from time to time, 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 Company Common Stock on the New York Stock Exchange
Composite Tape (or as reported on the principal exchange on which the 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 descendant, Affiliate or associate (as
such term is 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 corporation that is such Person or a successor partnership
all of the partners of which or a successor corporation all of the stockholders
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 disposition; (vi) a transferee by inter vivos transfer to the
transferring Person's spouse, children and/or other lineal descendants; (vii) a
trust transferee by inter vivos transfer, the beneficiaries 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
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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 Company
Common Stock issued to one or more of the Stockholders upon the exercise of the
Warrants, (iii) shares of Company Common Stock issued upon the conversion of the
shares of Company Preferred Stock and (iv) additional shares of 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 otherwise 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 transferred 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 later of (x) July 2, 1998 and (y) the date on which the
Company Preferred Stock is converted into Company Common Stock and expiring on
July 2, 2004.
(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 Company Common Stock and Warrants issued in
connection with the Merger.
(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.
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(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 (i) 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 Company Common Stock
acquired by any Stockholder after the date of this Agreement, including without
limitation, shares acquired upon exercise of the Warrants and (ii) Company
Preferred Stock owned by each Lemmerz Stockholder on the date hereof, as set
forth opposite each Lemmerz Stockholder's name on Exhibit B hereto, and all
shares of Company Common Stock acquired by any Lemmerz Stockholder after the
date of this Agreement, including without limitation, shares acquired upon
conversion of the shares of Company Preferred Stock.
(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 (other than to
any Lemmerz Stockholder with respect to Section 2.01(f)) 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,
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(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 Registration 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 statement/prospectus distributed in connection with the meeting
of stockholders of each of MWC Holdings, Inc. ("Holdings") and the Company to
vote upon the Merger (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 were made, not misleading. The Registration
Statement, as of its effective date, complied as to form in all material
respects with the requirements 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)
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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,
capacity 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 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 and contribution hereunder may be limited by federal or state
securities laws or the public policy underlying 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 Stockholder'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 (other than to any
Lemmerz Stockholder with respect to Section 2.03(d)) 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,
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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 Company Common Stock (other than
shares of 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 each of the Stockholders and its
respective 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 Stockholder periodic financial and
other information provided to the Board of Directors of the Company (the
"Board") or to JLL. Unless otherwise required by law, each Stockholder 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 (other than any Lemmerz 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 Registration 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.
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(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 (including entities in which the Company or any of
its subsidiaries own a minority interest) or holder of 10% or more of the
Company 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 First Indenture that is
not prohibited by Section 4.13 of the First 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, Nomura and the Lemmerz Stockholders shall use their best efforts to
cause the Board to consist of eleven (11) members, of which: (i) four members
shall be designees of JLL; (ii) one member shall be a designee of TSG; (iii) two
members shall be designees of the Lemmerz Stockholders, acting collectively, one
of which shall be Horst Kukwa-Lemmerz, and the other shall not be a director,
officer, manager or employee of Lemmerz Holding or any Subsidiary of Lemmerz
(provided that such designee may otherwise be affiliated with one or more of the
Lemmerz Stockholders), and shall be reasonably acceptable to the Company (in the
event that Herr Kukwa-Lemmerz is unwilling or unable to serve as a director, any
other designee of the Lemmerz Stockholders shall be subject to the same
qualifications); (iv) one member shall be the Chief Executive Officer of the
Company; and (v) the other three members shall be determined by the Board;
provided, however, that such members determined by the Board shall not be
Affiliates of the Company or any of the Stockholders (except that one of such
directors may be an Affiliate of Argosy). For so long as Herr Kukwa-Lemmerz
shall serve as a member of the Board designated by the Lemmerz Stockholders,
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each of JLL, TSG, Nomura and the Lemmerz Stockholders shall use their best
efforts to cause Herr Kukwa-Lemmerz to be appointed a member of the Executive
Committee and a non-voting member of the Compensation Committee of the Board.
During the term of this Agreement and subject to the fiduciary duties of the
Board, the Company shall use its best efforts and shall exercise all authority
under applicable law to nominate for election and cause to be elected or
appointed, as the case may be, as directors of the Company a slate of directors
consisting of individuals meeting the requirements of the previous sentence.
In the event that one of the members of the Board is not an Affiliate of
Argosy, then Argosy shall be entitled to appoint a representative who shall be
permitted to attend all meetings of the Board, but who shall have no voting
power. Such representative shall be given the same notice of any meeting of
the Board as is required to be provided to a member of the Board and shall be
entitled to participate in discussions and consult with the Board. Such
representative shall receive all copies of all documents and shall have the
same access to information provided to members of the Board, in each case, at
the same time as such members of the Board. In addition, such representative
shall receive the same compensation or other economic consideration or
benefits, if any, that any member of the Board designated pursuant 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 resignation (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, (i) in the event that any Stockholder
entitled pursuant to Section 3.01(a) to designate one or more individuals for
nomination and election to the Board (other than the Lemmerz Stockholders)
shall, together with its Affiliates or associates (as such term is defined in
Rule 405 of the Securities Act), cease to own at least 50% of the Shares owned
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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; and (ii) in the event that the Lemmerz Stockholders shall, together
with their descendants, Affiliates or associates (as such term is defined in
Rule 405 of the Securities Act), cease to own, in the aggregate, (A) at least
50% of the Shares owned, in the aggregate, by such Persons on the date hereof,
the Lemmerz Stockholders shall have the right pursuant to this Agreement to
designate only one nominee for election to the Board and (B) at least 25% of
the Shares owned, in the aggregate, by such Persons on the date hereof, the
Lemmerz Stockholders 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 directors then
comprising the Board shall have the right to designate nominees to be elected to
the Board for any available directorship 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, Nomura and the
Lemmerz Stockholders 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 directors, so that all shares of Company Common
Stock 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, (ii) it
shall vote, or act by consent with respect to, all shares of Company Common
Stock 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, and (iii) it shall vote against, and
shall not take any action in support of, any matter presented to the
stockholders for vote prior to the conversion of the Company Preferred Stock,
including the issuance of additional shares of Company Common Stock or the
consummation of a merger or similar transaction, the approval of which would
result in the irrevocable proxies delivered to the Lemmerz Stockholders in
conjunction with the Acquisition Agreement representing, in the aggregate, less
than a majority of the voting shares of the Company then outstanding and
eligible to vote on the Approval (as defined in the Acquisition Agreement).
Except as specifically set forth in this Section 3.01(g), each of JLL, TSG,
Nomura and the Lemmerz Stockholders shall be entitled to vote its shares of
Company Common Stock on all other matters as it deems fit.
Section 3.02. Indemnification.
Immediately following the Acquisition, the Company shall
enter into an indemnification agreement substantially in the form of Exhibit C
hereto with each member of the Board not then a party thereto.
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ARTICLE IV
Restrictions on Transfer
Section 4.01. General Restrictions.
(a) No Stockholder may Transfer any Shares prior to the
commencement of the Registration Period 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 Company
Common Stock (and, if earlier than the date on which the Company Preferred Stock
is converted into Company Common Stock, all of the outstanding shares of Company
Preferred Stock for the same price per share as the shares of 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 Company Common Stock and as to which the requisite
approval of the Stockholders shall have been obtained.
(b) From and after July 2, 1998 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 applicable); (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 any of JLL, TSG or any Lemmerz
Stockholder shall not result in the assignment of such transferring
Stockholder's rights under Section 3.01(a) hereof.
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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, transfer 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"); and each Notice Recipient shall have the option, exercisable 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 consideration 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 Recipient at the same time as and upon the
same terms and conditions at which JLL sells its Shares (it being
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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 originally 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 purchasers. 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 964,000 of its Shares.
Section 4.05 Restrictions on Company Common Stock Acquired After the Date
Hereof.
From and after the date hereof, the Lemmerz Stockholders,
acting as a single entity, and each of JLL, TSG, Argosy, Chase and Nomura agree
that neither it nor any of its controlled or commonly controlled Affiliates may
acquire beneficial ownership of more than 3,000,000 shares of Company Common
Stock, other than pursuant to any stock dividend or distribution with respect
to its shares or upon exercise of the Warrants. Shares of Company Common Stock
acquired by any Stockholder after the date of this Agreement, including,
without limitation, upon conversion of the shares of Company Preferred Stock,
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 connection with such Demand Registration to
the extent then known and (iii) the identity of the Stockholder or Stockholders
(each, a "Demanding
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<PAGE> 15
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 Stockholder of the
Company's notice required by this paragraph.
(b) Number of Demands. The Lemmerz Stockholders, acting
together as a single entity, and each of JLL, TSG, Argosy, Chase and Nomura
shall be entitled to two (2) Demand Registrations; provided, however, that each
Stockholder, including, without limitations, the Lemmerz Stockholders, acting
together as a single entity, 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 Registration 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
Securities in the circumstances contemplated by Section 5.03), and (ii) such
registration statement shall have been maintained continuously 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 requirements 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 Stockholders 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
registration 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
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<PAGE> 16
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 statement 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 Securities 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 Demanding 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 Registration 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 Securities received
pursuant to the Merger (excluding, for these purposes, Registrable Securities
issued upon exercise of Warrants received pursuant to the Merger) or upon
conversion of the shares of Company Preferred Stock sought to be registered by
each Demanding Seller, pro rata in proportion to the number of Registrable
Securities received pursuant to the Merger or upon conversion of the shares of
Company Preferred Stock 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 (x) pursuant to the Merger
(including, for these purposes, Registrable Securities issued upon exercise of
Warrants received pursuant to the
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<PAGE> 17
Merger) or (y) upon conversion of the shares of Company Preferred Stock sought
to be registered by each Demanding Seller, pro rata in proportion to the number
of Registrable Securities neither received pursuant to the Merger nor upon
conversion of the shares of Company Preferred Stock sought to be registered by
all Demanding Sellers; and
(iii) third, if the number of Registrable 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 nationally recognized underwriter or underwriters to
manage and administer such offering, such underwriter or underwriters, as the
case may be, to be subject to the approval of the Board, 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 registration 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 effective 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.
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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 Commission, 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 Stockholder
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 registration
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 underwriter (or, if such Piggyback
Registration is not an underwritten offering, a nationally recognized
independent underwriter selected 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 participation registration rights)
such registration (such demand rights being "Other Demand Rights" and such
Persons being "Other Demanding 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 Registration only such securities as the Company, the Other Demanding
Sellers, and the Piggyback Sellers are so advised by such underwriter can be
sold without such an effect (the "Maximum Piggyback Number"), as follows and in
the following order of priority:
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(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
participatory 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, Registrable Securities issued upon exercise of
Warrants received pursuant to the Merger) or upon conversion of the
shares of Company Preferred Stock sought to be registered by each
Piggyback Seller, pro rata in proportion to the number of Registrable
Securities received pursuant to the Merger or upon conversion of the
shares of Company Preferred Stock 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 (x) pursuant to the Merger (including, for these purposes,
Registrable Securities issued upon exercise of Warrants received
pursuant to the Merger) or (y) upon conversion of the shares of
Company Preferred Stock sought to be registered by each Piggyback
Seller, pro rata in proportion to the Registrable Securities neither
received in the Merger nor upon conversion of the shares of Company
Preferred Stock 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 Piggyback 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) or upon conversion of the shares of
Company Preferred Stock sought to be registered by each Piggyback
Seller, pro rata in proportion to the number of Registrable Securities
received pursuant to the Merger or upon conversion of the shares of
Company Preferred Stock sought to be registered by all the Piggyback
Sellers, (C) third, if the number of securi-
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ties to be included under clauses (A) and (B) above is less than the
Maximum Piggyback Number, the number of Registrable Securities
received other than (x) pursuant to the Merger (including, for these
purposes, Registrable Securities issued upon exercise of Warrants
received pursuant to the Merger) or (y) upon conversion of the shares
of Company Preferred Stock sought to be registered by each Piggyback
Seller, pro rata in proportion to the Registrable Securities neither
received pursuant to the Merger nor upon conversion of the shares of
Company Preferred Stock 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 election, give written notice of such determination to each Stockholder 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 therewith 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 registration as a Demand
Registration. The continuation of such registration 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 registration thereby by giving written notice to such effect to the Company
prior to the effective date of such registration statement. In the event of any
such withdrawal, the Company shall not include such Registrable Securities in
the applicable registration and such Registrable Securities shall continue to be
Registrable 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 registration below the Requisite Amount, then the Company shall
as promptly as practicable give each holder of Registrable Securities sought to
be registered notice to such effect, referring to this Agreement and summarizing
this Section 5.03, and
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within five (5) business days following the effectiveness of such notice,
either the Company or the holders of a majority of the Registrable 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 registration 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 statement 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 hereunder). Upon the
written request of a majority of the Stockholders, 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 commence a Public
Offering through the sixty (60) day period immediately 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
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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 Registration.
Section 5.05. Registration Procedures.
(a) Whenever the Stockholders have requested that
any Registrable Securities be registered pursuant to this Agreement (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 Securities 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 necessary to keep such registration
statement effective for a continuous 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 Registrable 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 connection 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;
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(iv) promptly (i) notify each seller of Registrable
Securities of each of (x) the filing and effectiveness of the registration
statement and prospectus and any amendment 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
registration 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 qualification of the sale of such Registrable
Securities in any jurisdiction 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 documents 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 supplements 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 therein, including, without limitation, with respect to the number of
Registrable Securities being sold by such holders to such underwriter 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 incorporated 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
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majority 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
Registrable 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 Registrable
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 Statement 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 securities 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 designation of all such
Registrable Securities covered by such registration 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 independent
accountants to supply all information reasonably requested by any such sellers,
underwriters,
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attorneys, accountants or agents in connection with such registration
statement. Information which the Company determines, in good faith, to be
confidential 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 subsidiaries 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 counterpart 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, covering
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
25
<PAGE> 26
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 reasonable best
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 distribution 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 Securities 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,
warranties, 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 Securities hereunder, any seller of such Registrable Securities may,
at its option, require that any and all representations and warranties 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 underwriter 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
disposition 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
Registration, 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
26
<PAGE> 27
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 including, 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 connection 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 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 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 aggregate in
27
<PAGE> 28
connection with the sale of Registrable Securities. Notwithstanding the
foregoing, the Company shall not be responsible for the fees and expenses of
any additional counsel, or any of the accountants, agents or experts retained
by the Stockholders 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 employees performing legal or
accounting duties, the expense of any annual audit and the expense of any
liability insurance) (collectively, "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, liabilities and expenses
(collectively, the "Losses") caused by, resulting 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 Securities 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
28
<PAGE> 29
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 apportioned 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 Registrable 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 indemnification hereunder
shall give prompt written notice to the indemnifying party of any claim with
respect to which its seeks indemnification; 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
indemnifying 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 investigation, 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
29
<PAGE> 30
of the indemnified Person and will survive the transfer of the Registrable
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 determining 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 equitable
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
misrepresentation (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. Notwithstanding 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 legend 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 THE AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT DATED AS OF JUNE 30, 1997, 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.
30
<PAGE> 31
From and after the date of this Agreement, any reference in any legend on any
certificate representing any Shares to the Stockholders Agreement shall be
deemed for all purposes to refer to this 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 Stockholders
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, other than with
respect to the Lemmerz Stockholders, 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 undertakings with respect
to the subject matter hereof, other than those expressly set forth or referred
to herein. This Agreement and, other than with respect to the Lemmerz
Stockholders, 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 irrevocable proxy
coupled with an interest.
(f) Notices. All notices and other communications 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.
31
<PAGE> 32
If to the Company, to:
Hayes Wheels International, Inc.
38481 Huron River Drive
Romulus, Michigan 48174
U.S.A.
Attention: General Counsel
Telecopier: (313) 942-5199
With copies to: Hayes Wheels International, Inc.
38481 Huron River Drive
Romulus, Michigan 48174
U.S.A.
Telecopier: (313) 942-5199
and
Skadden, Arps, Slate, Meagher & Flom
One Rodney Square
Wilmington, Delaware 19801
U.S.A.
Attention: Robert B. Pincus, Esquire
Telecopier: (302) 651-3001
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
U.S.A.
Attention: Mr. Paul Levy
Telecopier: (212) 286-8624
32
<PAGE> 33
With a copy to:
Skadden, Arps, Slate, Meagher & Flom
One Rodney Square
Wilmington, Delaware 19801
U.S.A.
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
U.S.A.
Attention: Mr. Dennis Dolan
Telecopier: (212) 667-1708
If to TSG, to:
TSG Capital Fund II, L.P.
177 Broad Street
Stamford, Connecticut 06901
U.S.A.
Attention: Mr. Cleveland Christophe
Telecopier: (203) 406-1590
With a copy to:
Mayer, Brown & Platt
1675 Broadway
New York, New York 10019
U.S.A.
Attention: James B. Carlson, Esquire
Telecopier: (212) 262-1910
33
<PAGE> 34
If to Argosy, to:
CIBC WG Argosy Merchant Fund II, LLC
1325 Avenue of the Americas
22nd Floor
New York, New York 10019
U.S.A.
Atention: Mr. 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
U.S.A.
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
U.S.A.
Attention: Mr. Brett Ingersoll
Telecopier: (212) 622-3101
With a copy to:
O'Sullivan, Graeve & Karabell
30 Rockefeller Plaza
41st Floor
New York, New York 10012
U.S.A.
Attention: John Soydam, Esquire
Telecopier: (212) 408-2420
34
<PAGE> 35
If to any Lemmerz Stockholder, to:
Herrn Horst Kukwa-Lemmerz
c/o Lemmerz Holding GmbH
Postfach 1125
53621 Konigswinter
Federal Republic of Germany
Telecopier: 49-2223-71-620
With copies to:
Meilicke & Partner
Poppelsdorfer Allee 106
53115 Bonn,
Federal Republic of Germany
Attention: Dr. Wienand Meilicke
Telecopier: 49-228-72543-10
and
Cleary, Gottlieb, Steen & Hamilton
1 Liberty Plaza
New York, New York 10006
U.S.A.
Attention: William A. Groll, Esquire
Telecopier: (212) 225-3999
(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 ARBITRATION
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,
35
<PAGE> 36
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 jurisdiction, 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 Company Common Stock or shares of Company
Preferred Stock to a Permitted Transferee. Any such attempted assignment in
contravention 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 Company Common Stock or Company Preferred Stock (other than
upon the conversion thereof) 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 Company Common Stock or Company
Preferred Stock (other than upon the conversion thereof) 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 by the Company
and Stockholders owning the percentage of shares set forth in Article VI (j)
hereof, this Agreement shall terminate on July 2, 2004.
36
<PAGE> 37
(o) Effect. Except as specifically amended hereby, the
rights, interests and obligations of each Stockholder (other than any Lemmerz
Stockholder) under the Stockholders Agreement shall be deemed to have remained
in full force and effect in accordance with its terms through the date hereof.
[SIGNATURE PAGES FOLLOW]
37
<PAGE> 38
IN WITNESS WHEREOF, the undersigned hereby agree to
be bound by the terms and provisions of this Amended and Restated Stockholders
Agreement as of the date first above written.
HAYES WHEELS INTERNATIONAL, INC.
By: /s/ Daniel M. Sandberg
---------------------------------
Name:
Title:
JOSEPH LITTLEJOHN & LEVY FUND II, L.P.
By: JLL ASSOCIATES II, L.P.,
its General Partner
By: /s/ Paul S. Levy
---------------------------------
Name:
Title:
CHASE EQUITY ASSOCIATES, a
California Limited Partnership
By: CHASE CAPITAL PARTNERS,
its General Partner
By: /s/ Donald J. Hoffman
---------------------------------
Name:
Title:
CIBC WG ARGOSY MERCHANT FUND 2,
L.L.C.
By: /s/ Jay Bloom
---------------------------------
Name:
Title:
<PAGE> 39
NOMURA HOLDING AMERICA, INC.
By: /s/ Dennis Dolan
----------------------------------
Name:
Title:
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:
Title:
/s/ Wienand Meilicke
---------------------------------
Marianne Lemmerz
/s/ Wienand Meilicke
---------------------------------
Inge Kruger-Pressl
/s/ Wienand Meilicke
---------------------------------
Renate Kukwa-Lemmerz
/s/ Wienand Meilicke
---------------------------------
Horst Kukwa-Lemmerz
39
<PAGE> 40
EXHIBIT A
<TABLE>
<CAPTION>
Column A Column B
-------- --------
Shares of Warrants to purchase
Name of Company Common Company
Stockholder Stock Owned (#) Common Stock Held (#)
- ----------- ------------------ ---------------------
<S> <C> <C>
JLL 9,634,172 1,825,378
TSG 2,812,500 67,500
Argosy 2,500,000 60,000
Chase 1,250,000* 30,000**
Nomura 937,500 22,500
</TABLE>
- --------------------
* Includes 159,026 shares of non-voting New Company Common Stock
** Consists of Warrants to purchase non-voting New Company Common Stock.
A-1
<PAGE> 41
EXHIBIT B
<TABLE>
<CAPTION>
Name of Shares of
Lemmerz Stockholder Company Preferred Stock
------------------- -----------------------
<S> <C>
Marianne Lemmerz 3,200,000
Inge Kruger-Pressl 25,000
Renate Kukwa-Lemmerz 25,000
Horst Kukwa-Lemmerz 1,750,000
</TABLE>
B-1
<PAGE> 42
EXHIBIT C
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 recognize the
increased risk of litigation and other claims being asserted against directors
of public companies in today's environment;
WHEREAS, the Restated Certificate of Incorporation (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 obtaining
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 premises 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 Securities Exchange Act of 1934, as amended), other
than a trustee or other fiduciary holding securities 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 becomes the
C-1
<PAGE> 43
"beneficial owner" (as defined in Rule 13d-3 under said Act),
directly or indirectly, of securities of the Company
representing 30% or more of the total voting power represented
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 election 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
consolidation which would result in the Voting Securities 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 represented by the
Voting Securities of the Company or such surviving entity
outstanding immediately 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 Company 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 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 defend, 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 another corporation,
partnership, joint venture, employee benefit plan, trust or
other enterprise, 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 person or body
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<PAGE> 44
appointed by the Board who is not a party to the particular
Claim for which Indemnitee is seeking indemnification, or
Independent Legal Counsel.
(g) Voting Securities: any securities of the Company 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
business days of such request) any and all Expenses to Indemnitee (an "Expense
Advance"). Notwithstanding anything in this Agreement to the contrary, except
as provided in Section 5 hereof, prior to a Change in Control, Indemnitee 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 Section 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 indemnified
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 Directors, 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 Control), 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 deter-mination 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.
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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 Company (which
approval shall not be unreasonably withheld). Such counsel, among other
things, shall render its written 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,
advance 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 indemnification 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 determination by the
Reviewing Party or otherwise as to whether 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 Agreement, 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
permitted by applicable law. In addition, neither the failure of the Reviewing
Party to have made a determination 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 Indemnitee has not met such standard
of conduct or did not have such belief, prior to the commencement of legal
proceedings 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.
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8. Nonexclusivity, Etc. The rights of the Indemnitee 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
afforded 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
extinguished 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 limitations 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 necessary 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 indemnifiable hereunder.
14. Binding Effect, Etc. This Agreement shall be binding upon and
insure to the benefit of and be enforceable by the parties hereto and their
respective successors, 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 provisions 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 unenforce-able in any
respect, and the validity and enforceability 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.
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16. Governing Law. This Agreement shall be governed 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
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AMENDED AND RESTATED
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
and
DRESDNER BANK AG
as European Swing Line Administrator
Dated as of June 30, 1997
<PAGE> 2
TABLE OF CONTENTS
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SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Other Definitional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.1 Revolving Credit Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.2 Revolving Credit Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.3 Procedure for Revolving Credit Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.4 Commitment Fees; Other Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.5 Termination or Reduction of Revolving Credit Commitments . . . . . . . . . . . . . . . . . . . . . . 32
2.6 Swing Line Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.7 Term Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2.8 Tranche A-1 Term Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
2.9 Tranche A-2 Term Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
2.10 Tranche B Term Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
2.11 Tranche C Term Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
2.12 Procedure for Tranche A-2 Term Loan Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
2.13 Repayment of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 3. LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
3.1 L/C Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
3.2 Procedure for Issuance of Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
3.3 Fees, Commissions and Other Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
3.4 L/C Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
3.5 Reimbursement Obligation of the Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
3.6 Obligations Absolute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
3.7 Letter of Credit Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
3.8 Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 4. GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
4.1 Interest Rates and Payment Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
4.2 Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
4.3 Mandatory Prepayments and Reduction of Revolving Credit Commitments . . . . . . . . . . . . . . . . . 49
4.4 Conversion and Continuation Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
4.5 Minimum Amounts and Maximum Number of Tranches . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
4.6 Computation of Interest, Fees and Dollar Equivalent Amount . . . . . . . . . . . . . . . . . . . . . 53
4.7 Inability to Determine Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
4.8 Pro Rata Treatment and Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
4.9 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
4.10 Requirements of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
4.11 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
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4.12 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
4.13 Change of Lending Office; Replacement of Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
4.14 Borrower Controls on Non-Dollar Indebtedness; Calculation of Non-Dollar Extensions of
Credit; Prepayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 5. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
5.1 Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
5.2 No Change; Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
5.3 Corporate Existence; Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
5.4 Corporate Power; Authorization; Enforceable Obligations . . . . . . . . . . . . . . . . . . . . . . . . . 64
5.5 No Legal Bar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
5.6 No Material Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
5.7 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
5.8 Ownership of Property; Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
5.9 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
5.10 No Burdensome Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
5.11 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
5.12 Federal Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
5.13 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
5.14 Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
5.15 Investment Company Act; Other Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
5.16 Subsidiaries and Joint Ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
5.17 Purpose of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
5.18 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
5.19 Regulation H . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
5.20 No Material Misstatements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
5.21 Delivery of the Transaction Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
5.22 Representations and Warranties Contained in the Transaction Documents . . . . . . . . . . . . . . . . . . 69
5.23 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 6. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
6.1 Conditions to Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
6.2 Conditions to Each Extension of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 7. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
7.1 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
7.2 Certificates; Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
7.3 Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
7.4 Conduct of Business and Maintenance of Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
7.5 Maintenance of Property; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
7.6 Inspection of Property; Books and Records; Discussions . . . . . . . . . . . . . . . . . . . . . . . . . 77
7.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
7.8 Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
7.9 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
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7.10 Additional Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
7.11 Interest Rate Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 8. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
8.1 Financial Condition Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
8.2 Limitation on Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
8.2A Limitation on Non-Dollar Indebtedness and Guarantee Obligations . . . . . . . . . . . . . . . . . . . . . 84
8.3 Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
8.4 Limitation on Guarantee Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
8.5 Limitation on Fundamental Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
8.6 Limitation on Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
8.7 Limitation on Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
8.8 Limitation on Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
8.9 Limitation on Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
8.10 Limitation on Investments, Loans and Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
8.11 Limitation on Optional Payments and Modifications of Debt Instruments and Transaction Documents . . . . . 93
8.12 Limitation on Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
8.13 Limitation on Changes in Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
8.14 Limitation on Negative Pledge Clauses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
8.15 Limitation on Lines of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
8.16 Limitations on Currency and Commodity Hedging Transactions . . . . . . . . . . . . . . . . . . . . . . . 94
SECTION 9. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
SECTION 10. THE MANAGING AGENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
10.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
10.2 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
10.3 Exculpatory Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
10.4 Reliance by Administrative Agent and Documentation Agent . . . . . . . . . . . . . . . . . . . . . . . . 99
10.5 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
10.6 Non-Reliance on Administrative Agent, Documentation Agent and Other Lenders . . . . . . . . . . . . . . . 100
10.7 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
10.8 Administrative Agent and Documentation Agent in Their Individual Capacities . . . . . . . . . . . . . . . 101
10.9 Successor Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
10.10 Issuing Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
10.11 Releases of Guarantees and Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
10.12 Foreign Pledge Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
11.1 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
11.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
11.3 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
11.4 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
11.5 Payment of Expenses and Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
</TABLE>
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<PAGE> 5
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
11.6 Successors and Assigns; Participations and Assignments . . . . . . . . . . . . . . . . . . . . . . . . 107
11.7 Adjustments; Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
11.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
11.9 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
11.10 Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
11.11 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
11.12 Submission To Jurisdiction; Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
11.13 Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
11.14 WAIVERS OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
11.15 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
11.16 Effect of Amendment and Restatement of the Prior Credit Agreement . . . . . . . . . . . . . . . . . . . 112
</TABLE>
- iv -
<PAGE> 6
<TABLE>
<S> <C>
SCHEDULES
A Commitments and Addresses
B Applicable Margin and Applicable Commitment Fee Rate
C Transaction Documents
D Available Foreign Currencies
5.4 Consents
5.14 Equipment and Inventory of Borrower and Subsidiaries
5.16 Subsidiaries and Joint Ventures
6.1(o) Additional Counsel Opinions
8.2(e) Permitted Dollar Indebtedness
8.2A(h) Permitted Non-Dollar Indebtedness
8.3(h) Permitted Liens
8.4(a) Permitted Guarantee Obligations
8.10(k) Investments
EXHIBITS
A-1 Form of Revolving Credit Note
A-2 Form of Tranche A-1 Term Note
A-3 Form of Tranche A-2 Term Note
A-4 Form of Tranche B Term Note
A-5 Form of Tranche C Term Note
A-6 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
</TABLE>
- v -
<PAGE> 7
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June 30, 1997, 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, MERRILL LYNCH CAPITAL CORPORATION, a Delaware
corporation, as documentation agent for the Lenders hereunder and DRESDNER BANK
AG, as European Swing Line Administrator.
W I T N E S S E T H :
WHEREAS, the Borrower, the several banks and other financial institutions
from time to time parties thereto, Canadian Imperial Bank of Commerce, as
administrative agent, and Merrill Lynch Capital Corporation, as documentation
agent, are parties to that certain Credit Agreement, dated as of June 27, 1996
(the "Prior Credit Agreement"), providing for certain term loans, revolving
credit loans and other extensions of credit described therein;
WHEREAS, the Borrower intends to acquire (the "Acquisition") 99.99% of the
issued and outstanding capital stock of Lemmerz Holding GmbH ("Lemmerz") for an
aggregate purchase price of $200 million payable in cash plus the issuance of
preferred stock (the "Seller Preferred Stock") of the Borrower (which is
convertible into 5 million shares of the Borrower's common stock);
WHEREAS, the Borrower intends to refinance (the "Refinancing") existing
indebtedness of Lemmerz denominated in Deutschemarks in a dollar equivalent
amount of approximately $95.6 million and to finance the transaction expenses
related to the Acquisition and the Refinancing;
WHEREAS, the Borrower will finance the Acquisition, the Refinancing and the
transaction expenses related thereto by (a) issuing $250 million in aggregate
principal amount of senior subordinated notes (the "High-Yield Indebtedness")
on terms and conditions reasonably satisfactory to the Lenders and (b)
borrowing in Deutschemarks the dollar equivalent amount of approximately $100
million from the Lenders under the credit facilities provided for herein;
WHEREAS, in connection with the Acquisition and Refinancing, the Borrower
has requested the Lenders to continue the commitments, loans and other
extensions of credit under the Prior Credit Agreement and to make additional
credit facilities available to the Borrower;
WHEREAS, in connection with the Acquisition and the Refinancing, the
Borrower has commenced a consent solicitation (the "Consent Solicitation") to
amend certain restrictive covenants contained in its Senior Subordinated Notes
(as hereinafter defined); and
<PAGE> 8
WHEREAS, the Administrative Agent and the Lenders are willing to continue
and to extend the credit facilities provided for herein 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 that, effective on the
Closing Date, the Prior Credit Agreement shall be amended and restated to read
in its entirety 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.
"Acquisition": as defined in the recitals hereto.
"Administrative Agent": CIBC, together with its affiliates, as
the arranger of the Commitments and as the administrative agent for
the Lenders under this Agreement and the other Loan Documents.
"Adjustment Date": 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, "control" 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 management
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 (calculated in
accordance with subsection 4.6(b)) of (a) the aggregate principal
Dollar Equivalent 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 Dollar
Equivalent Amount of the L/C Obligations then outstanding and (c) such
Revolving Credit Lender's Revolving Credit Commitment Percentage of
the aggregate principal
<PAGE> 9
3
Dollar Equivalent Amount of the Swing Line Loans (including
Foreign Currency Swing Line Commitments as provided for in subsection
2.6(b)) then outstanding.
"Aggregate Revolving Credit Outstandings": at any time, an
amount equal to the sum (calculated in accordance with subsection
4.6(b)) of the Dollar Equivalent Amount of (a) the aggregate then
outstanding principal amount of Revolving Credit Loans, (b) the
aggregate then outstanding L/C Obligations in respect of Letters of
Credit and (c) the aggregate then outstanding principal amount of
Swing Line Loans (including Foreign Currency Swing Line Commitments as
provided for in subsection 2.6(b)).
"Agreement": this Amended and Restated Credit Agreement, as
amended, supplemented or otherwise modified from time to time.
"Applicable Commitment Fee Rate": during the period from the
Closing Date until the first Adjustment Date, the Applicable
Commitment Fee Rate shall equal 0.50%; on the first Adjustment Date
and on each Adjustment Date to occur thereafter the Applicable
Commitment Fee Rate will be adjusted to the applicable rate per annum
set forth under the heading "Applicable Commitment Fee Rate" on
Schedule B which corresponds to the Leverage Ratio determined from the
financial statements and Compliance Certificate relating to the end of
the fiscal quarter immediately preceding such Adjustment Date;
provided, further, that in the event that the financial statements
required to be delivered pursuant to subsection 7.1(a) or (b), as
applicable, and the related Compliance Certificate 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
Commitment Fee Rate increases from that previously in effect as a
result of the delivery of such financial statements and
Compliance Certificate, then the Applicable Commitment Fee Rate
during the period from the date upon which such financial
statements 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 Commitment Fee Rate 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 Commitment Fee Rate decreases from that previously in
effect as a result of the delivery of such financial statements
and Compliance Certificate, then such decrease in the Applicable
Commitment Fee Rate shall not become applicable until the date
upon which such financial statements and Compliance Certificate
actually are delivered; and
<PAGE> 10
4
(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
Certificate were required to be delivered (after the expiration
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 Commitment Fee
Rate shall be 0.50% per annum.
"Applicable Margin": as applied to a given Type of 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 ABR Loans shall be 1.25% per annum, and the Applicable
Margin in respect of Eurocurrency Loans shall be 2.25% per annum in
respect of Revolving Credit Loans and Tranche A Term Loans, 2.75% per
annum in respect of Tranche B Term Loans, and 3.00% per annum in
respect of Tranche C Term Loans; on the first Adjustment Date and on
each Adjustment Date to occur thereafter the Applicable Margin will be
adjusted to the applicable rate per annum set forth under the heading
"Applicable Margin" on Schedule B which corresponds to the Leverage
Ratio determined from the financial statements and Compliance
Certificate relating to the end of the fiscal quarter immediately
preceding such Adjustment Date; provided, further, that in the event
that the financial statements required to be delivered pursuant to
subsection 7.1(a) or 7.1(b), as applicable, and the related Compliance
Certificate 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
Certificate, then the Applicable Margin in respect of the Loans
during the period from the date upon which such financial
statements 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 Certificate, then such decrease in the Applicable
Margin shall not become applicable until the date upon which such
financial statements and Compliance Certificate actually 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
<PAGE> 11
5
statements and Compliance Certificate were required to be
delivered (after the expiration 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 ABR Loans shall be
1.25% per annum and the Applicable Margin in respect of
Eurocurrency Loans that are Revolving Credit Loans or Tranche A
Term Loans shall be 2.25% per annum; Tranche B Term Loans, 2.75%
per annum; and Tranche C Term Loans, 3.00% per annum.
"Assignee": as defined in subsection 11.6(c).
"Autokola": Hayes Wheels Autokola NH, a.s.
"Available Foreign Currencies": the currencies set forth on
Schedule D, and any other available and freely convertible non-Dollar
currency selected by the Borrower and approved in writing by the
Administrative Agent and the Majority Revolving Credit Lenders;
provided that with respect to Foreign Currency Swing Line Loans the
Available Foreign Currencies shall be limited to those set forth on
Schedule D.
"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) such Revolving Credit Lender's
Aggregate Outstanding Revolving Credit, provided that for purposes of
calculating Available Revolving Credit Commitments under subsection
2.4(a) it shall be assumed that no Swing Line Loans are then
outstanding and that no Foreign Currency Swing Line Commitments have
been extended; collectively, as to all the Lenders, the "Available
Revolving Credit Commitments".
"Board": the Board of Governors of the Federal Reserve System
or any successor thereto.
"Borrower": as defined in the preamble hereto.
"Borrower Notes": the 9-1/4% Senior Notes of the Borrower due
November 15, 2002, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with subsection
8.11.
"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 hereunder or an Issuing Lender to
issue a Letter of Credit hereunder.
"Business Day": (a) when such term is used in respect of a day
on which a Loan in an Available Foreign Currency is to be made, a
payment is to be made in respect of such Loan, an Exchange Rate is to
be set in respect of an Available Foreign Currency or any other
dealing in an Available Foreign Currency is to be carried out
<PAGE> 12
6
pursuant to this Agreement, such term shall mean a London
Banking Day which is also a day on which banks are open for general
banking business in the city which is the principal financial center
of the country of such Available Foreign Currency, (b) when such term
is used to describe a day on which a request is to be made to an
Issuing Lender for issuance of a Letter of Credit or on which a Letter
of Credit is to be issued, such term shall mean a day other than a
Saturday, Sunday or other day on which commercial banks in the city in
which such Issuing Lender's issuing office is located are authorized
or required by law to close and (c) when such term is used in any
context in this Agreement, such term shall mean 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.
"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 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 Service, 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 securities 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 entities of such
obligors) have ratings described in such clauses or equivalent ratings
from comparable foreign rating agencies or (iii) deposits, obligations
or securities of the type and maturity described
<PAGE> 13
7
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 (adjusted 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 publication of the rates
referred to in clause (a) of the definition 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 for
determining 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 deposits in the United States; and
<PAGE> 14
8
(b) the daily average during such period of the net annual
assessment rates estimated by the Administrative 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 quarter of the Borrower not being greater than 3.50 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) at least 17.5% in the aggregate of the
Borrower's outstanding common stock, determined on a fully diluted
basis, shall have been issued pursuant to one or more public
offerings, JLL and its Affiliates are the beneficial owners (as
defined under Rule 13d-3 or any successor rule or regulation
promulgated under the Exchange Act) of less than (x) at any time prior
to the conversion of all the shares of the Seller Preferred Stock to
shares of the Borrower's common stock, 20% or (y) at any time
thereafter, 10% of the outstanding common stock of the Borrower,
determined on a fully diluted basis; (b) at any time, any Person
(including such Person's Affiliates and associates), other than the
New Borrower Investors or any underwriter of a public offering of the
Borrower's common stock, 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 the New Borrower
Investors are in the aggregate the beneficial owner of a lesser
percentage of the total voting power of the outstanding 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; (c) during any period of two
consecutive 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 shareholders 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
recommendation for election was previously so approved) cease to
constitute a majority of the board of directors of the Borrower; (d) a
"Change of Control" as defined in the Senior Subordinated Notes
Indenture shall have occurred; or (e) a "Change of Control" as defined
in the High-Yield Indebtedness Indenture shall have occurred.
"CIBC": Canadian Imperial Bank of Commerce, a
Canadian-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:
<PAGE> 15
9
(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": $150,000,000.
"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 constituting 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 May 21, 1997
among CIBC, Merrill Lynch and the Borrower, as the same may be
amended, supplemented or otherwise modified from time to time.
"Commitments": collectively, the Revolving Credit Commitments,
the Dollar Swing Line Commitment, the Tranche A-2 Term Loan
Commitments and the L/C Commitment; individually, a "Commitment".
"Commitment Percentage": as to any Lender, prior to the
Closing Date, the percentage of the aggregate Revolving Credit
Commitments, Tranche A-2 Term Loan Commitments and then outstanding
Term Loans constituted by such Lender's Revolving Credit Commitment,
Tranche A-2 Term Loan Commitment and then outstanding Term Loans, 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 outstanding plus (y) such Lender's Revolving Commitment
Percentage 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
<PAGE> 16
10
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).
"Consent Solicitation": as defined in the recitals hereto.
"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 Borrower 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 individual business segments of the
Borrower and its Subsidiaries on a stand-alone basis.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, 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
Amended and Restated Copyright, Patent and Trademark Security
Agreement to be executed and delivered by the Borrower and certain
Domestic Subsidiaries of the Borrower, substantially in the form of
Exhibit B-4, as the same may be amended, supplemented or otherwise
modified from time to time.
"Currency" or "Currencies": collectively, Dollars and
Available Foreign Currencies.
"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".
<PAGE> 17
11
"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.
"Dollar Equivalent Amount": with respect to (i) any amount of
any currency other than Dollars on any date, the equivalent amount in
Dollars of such amount of currency as determined by the Administrative
Agent in accordance with subsection 4.6(b) using the applicable
Exchange Rate and (ii) any amount in Dollars, such amount.
"Dollar Indebtedness": at any time, any Indebtedness then
denominated in Dollars.
"Dollar Letters of Credit": at any time, all Letters of Credit
then denominated in Dollars.
"Dollar Refunding Amount": as defined in subsection 2.6(e)(i).
"Dollar Revolving Credit Loans": at any time, all Revolving
Credit Loans then denominated in Dollars.
"Dollar Swing Line Commitment": the Dollar Swing Line Lender's
obligation to make Dollar Swing Line Loans pursuant to subsection
2.6(a) in an aggregate principal amount not to exceed $30,000,000 at
any time.
"Dollar Swing Line Lender": CIBC, in its capacity as provider
of Dollar Swing Line Loans.
"Dollar Swing Line Loans": as such term is defined in
subsection 2.6(a).
"Dollars" and "$": dollars in lawful currency of the United
States.
"Domestic Subsidiary": any Subsidiary 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)
depreciation for such period, plus (e) amortization for such period,
plus (f) any other non-cash items (including minority interests)
reducing Net Income for such period, plus (g) restructuring charges
and costs
<PAGE> 18
12
(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 expenses for such period, minus (i) all non-cash items
increasing Net Income for such period.
"Environmental Costs": any and all costs or expenses
(including, without limitation, reasonable 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, noncompliance 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 limitation, 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 environment or of human health, or employee health and safety, as
has been, is now, or may at any time hereafter be, in effect.
"Environmental Permits": any and all permits, licenses,
registrations, notifications, exemptions and any other authorization
required under any Environmental Law.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurocurrency Base Rate": with respect to each day during each
Interest Period pertaining to a Eurocurrency Loan, the rate per annum
determined by the Administrative Agent to be the arithmetic mean of
the offered rates for deposits in the applicable Currency 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
that if there shall at any time no longer exist a Telerate British
Bankers Assoc. Interest Settlement Rates Page, "Eurocurrency Base
Rate" shall mean, with respect to each day during each Interest Period
pertaining to a Eurocurrency Loan, the rate per annum equal to the
rate at which CIBC is offered deposits in the applicable Currency 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 Eurocurrency 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 Eurocurrency Loan to be outstanding during such
Interest Period. "Telerate British Bankers Assoc. Interest Settlement
Rates Page"
<PAGE> 19
13
shall mean the display designated as Page 3750 (or Page 3740 in
the case of French Francs, U.K. Pounds Sterling and Deutschemarks) 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 deposits in the applicable Currency are offered by
leading banks in the London interbank deposit market).
"Eurocurrency Loans": Loans the rate of interest applicable to
which is based upon the Eurocurrency Rate.
"Eurocurrency Rate": with respect to each day during each
Interest Period pertaining to a Eurocurrency Loan, a rate per annum
determined for such day in accordance with the following formula
(rounded upward to the nearest 1/100th of 1%):
Eurocurrency Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurocurrency Reserve Requirements": for any day as applied to
a Eurocurrency Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on
such day (including, without limitation, basic, supplemental, marginal
and emergency reserves under any regulations of the Board or other
Governmental Authority having jurisdiction with respect thereto)
dealing with reserve requirements prescribed for eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D
of such Board) maintained by a member bank of such System.
"European Swing Line Administrator": Dresdner Bank AG.
"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 $25,000,000.
<PAGE> 20
14
"Exchange Act": the Securities Exchange Act of 1934, as
amended from time to time.
"Exchange Rate": with respect to any currency other than
Dollars on any date, the rate at which such currency may be exchanged
into Dollars, as set forth on such date on the relevant FWDS Series
Reuters currency page at or about 11:00 A.M. New York City time on
such date. In the event that such rate does not appear on any such
Reuters page, the "Exchange Rate" with respect to such currency shall
be determined by reference to such other publicly available service
for displaying exchange rates as may be agreed upon by the
Administrative Agent and the Borrower or, in the absence of such
agreement, such "Exchange Rate" shall instead be the Administrative
Agent's spot rate of exchange in the interbank market where its
currency exchange operations in respect of such currency are then
being conducted, at or about 10:00 A.M. local time at such date for
the purchase of Dollars with such currency for delivery two Business
Days later; provided that if at the time of any such determination no
such spot rate can reasonably be quoted, the Administrative Agent may
use any reasonable method (including obtaining quotes from three or
more market makers for such currency) as it deems appropriate to
determine such rate and such determination shall be conclusive absent
manifest error (without prejudice to the determination of the
reasonableness of such method).
"Exposure": as defined in subsection 4.14(c).
"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 executed and delivered by
the Borrower and certain Domestic Subsidiaries, substantially in the
form of Exhibit B-2 to the Prior Credit Agreement, as the same may be
amended, supplemented 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 as of October 31, 1997, January 31, 1998 and April 30,
1998), minus an amount equal to the Capital Expenditures for the
applicable period (after giving effect to the Interim Adjustments for
the calculations occurring on October 31, 1997, January 31, 1998 and
April 30, 1998) (less, in the case of the twelve month periods
<PAGE> 21
15
ending on October 31, 1997 and January 31, 1998, $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,
1997, January 31, 1998 and April 30, 1998), plus (ii) scheduled
payments of principal on the Term Loans for the applicable period.
"Foreign Currency Letters of Credit": at any time, all Letters
of Credit then denominated in an Available Foreign Currency.
"Foreign Currency Revolving Credit Loans": at any time, all
Revolving Credit Loans then denominated in an Available Foreign
Currency.
"Foreign Currency Subfacility Amount": $80,000,000 or, if less,
the aggregate amount of the Revolving Credit Commitments then in
effect.
"Foreign Currency Sublimit Outstandings": at any time, the
sum, without duplication, of the Dollar Equivalent Amount of (a) the
aggregate then outstanding principal amount of Foreign Currency
Revolving Credit Loans, (b) the aggregate then outstanding amount of
L/C Obligations in respect of Foreign Currency Letters of Credit and
(c) the aggregate then outstanding principal amount of Non-Dollar
Indebtedness incurred pursuant to subsection 8.2A(d).
"Foreign Currency Swing Line Commitment": as defined in
subsection 2.6(b).
"Foreign Currency Swing Line Lender": the European Swing Line
Administrator and any other Lender (including CIBC) that, with the
consent of the Borrower and the Administrative Agent, agrees to make
Foreign Currency Swing Line Loans hereunder, in its capacity as a
provider of such Foreign Currency Swing Line Loans.
"Foreign Currency Swing Line Loans": as defined in subsection
2.6(b).
"Foreign Currency Swing Line Subfacility": $15,000,000.
"Foreign Stock Pledge Agreements": collectively, the (a) each
of the Stock Pledge Agreements executed and delivered by the Borrower
and certain of its Domestic Subsidiaries in connection with the Prior
Credit Agreement, and (b) each of the Stock Pledge Agreements, in form
and substance reasonably satisfactory to the Administrative Agent,
pursuant to which 65% of the Capital Stock of HWI Sub and
approximately 35% of the Capital Stock of Autokola shall be pledged as
collateral security to secure the obligations and liabilities 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.
<PAGE> 22
16
"Foreign Subsidiary": any Subsidiary organized under the laws
of any jurisdiction outside the United States.
"GAAP": generally accepted accounting principles in the United
States consistent with those utilized in preparing the audited
financial statements referred to in subsection 5.1; provided that for
purposes of subsection 7.1 GAAP shall mean generally accepted
accounting principles in the United States as in effect at the time of
the applicable financial statements.
"Global Assignment and Acceptance": as defined in subsection
11.18.
"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
Commissioners.
"Guarantee": as defined in the definition of "Guarantor."
"Guarantee and Collateral Agreement": the Amended and Restated
Guarantee and Collateral Agreement to be executed and delivered by the
Borrower and each of its material Domestic Subsidiaries, substantially
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 "guaranteeing
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 obligations") 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 obligation 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 property, 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
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 Obligation is
<PAGE> 23
17
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 limitation, any guarantee delivered pursuant to subsection
7.10.
"High-Yield Indebtedness": as defined in the recitals hereto.
"High-Yield Indebtedness Indenture": the Indenture to be dated
as of the Closing Date between the Borrower and The Bank of New York,
as trustee, pursuant to which the High-Yield Indebtedness shall be
issued, as the same may be amended, supplemented or otherwise modified
from time to time in accordance with subsection 8.11.
"HWI Sub": HL Holding Germany GmbH, a limited liability
company under the laws of the Federal Republic of Germany.
"IKB": IKB Deutsche Industriebank.
"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
instrument, (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 Person, (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.
<PAGE> 24
18
"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 Expense for the applicable period (in each case,
after giving effect to the Interim Adjustments for the calculations
occurring as of October 31, 1997, January 31, 1998 and April 30,
1998).
"Interest Expense": for any period and without duplication,
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
interest 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 financing permitted by
subsection 8.2 for such period; (iii) the net payments made in
connection with Interest Rate Protection 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
period, (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 Protection 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 Eurocurrency
Loan having an Interest Period of three months or less, the last day
of such Interest Period, and (c) as to any Eurocurrency 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
Interest Period and the last day of such Interest Period.
"Interest Period": with respect to any Eurocurrency Loan:
(i) initially, the period commencing on the borrowing
or conversion date, as the case may be, with respect to such
Eurocurrency Loan and ending one, two, three or six months
thereafter, as selected by the Borrower in its notice of
borrowing or notice of conversion, as the case may be, given
with respect thereto; and
(ii) thereafter, each period commencing on the last
day of the next preceding Interest Period applicable to such
Eurocurrency 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;
<PAGE> 25
19
provided that all of the foregoing provisions relating
to Interest Periods are subject to the following:
(1) if any Interest Period pertaining to a
Eurocurrency 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 Interest 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) shall end on the
Revolving Credit Commitment Termination Date, (b) the
Tranche A Maturity Date (in the case of the Tranche A Term
Loans) shall end on the Tranche A Maturity Date, (c) the
Tranche B Maturity Date (in the case of the Tranche B Term
Loans) shall end on the Tranche B Maturity Date, or (d) the
Tranche C Maturity Date (in the case of the Tranche C Term
Loans) shall end on the Tranche C Maturity Date;
(3) any Interest Period pertaining to a Eurocurrency
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 Eurocurrency
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 quarter 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, 1997, January 31, 1998 and April 30, 1998, Interest
Expense for the twelve month period for which the Fixed Charge
Coverage Ratio and the Interest Coverage 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
<PAGE> 26
20
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, 1998 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,
1997, January 31, 1998 and April 30, 1998 (or, in the case of the
Leverage Ratio or the Pro-Forma Leverage Ratio, the full fiscal
quarter ending on April 30, 1998), 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 Lemmerz on a pro forma basis as if the
Acquisition had been consummated on the first day of such period;
and
(d) for the fiscal quarter ending on July 31, 1998 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, and any other
Lender appointed by the Borrower and CIBC, with the consent of such
Lender, in its capacity as issuer of Letters of Credit hereunder.
"JLL": Joseph Littlejohn & Levy Fund II, L.P., a Delaware
limited partnership, or any other fund controlled by Joseph,
Littlejohn & Levy.
"L/C Commitment": $100,000,000.
"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 outstanding 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": with respect to any Letter of Credit,
collectively, all the Revolving Credit Lenders other than the Issuing
Lender with respect thereto.
"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
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21
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 consolidated basis in accordance with
GAAP, with respect to leases (other than Financing Leases) of real and
personal property.
"Leasehold Mortgages": the Leasehold Mortgages executed and
delivered by the Borrower and certain Domestic Subsidiaries of the
Borrower, substantially in the form of Exhibit B-3 to the Prior Credit
Agreement, as the same may be amended, supplemented or otherwise
modified from time to time.
"Lemmerz": as defined in the recitals hereto.
"Lemmerz Shareholders": Marianne Lemmerz, Inge Kruger-Presol,
Renate Kukwa-Lemmerz and Horst Kukwa-Lemmerz.
"Lenders": as defined in the preamble hereto and including,
without limitation, the Dollar Swing Line Lender, the Foreign Currency
Swing Line Lenders and each Issuing Lender.
"Letters of Credit": as defined in subsection 3.1.
"Letter of Credit Application": an application in such form as
the applicable Issuing Lender may specify from time to time requesting
such 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 Subsidiaries 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 as of April 30, 1998).
"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.
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22
"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 and each Subsidiary which is a
party to a Loan Document, individually, a "Loan Party".
"London Banking Day": any day on which banks in London are open
for general banking business, including dealings in foreign currency
and exchange.
"Majority Lenders": at any time, Lenders the Commitment
Percentages of which aggregate more than 50%.
"Majority Revolving Credit Lenders": Revolving Credit Lenders
the Revolving Credit Commitment Percentages of which aggregate more
than 50%.
"Managing Agents": collectively, the Administrative Agent and
the Documentation Agent.
"Material Adverse Effect": a material adverse effect on (a)
the business, operations, property, condition (financial or otherwise)
or prospects of 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 Lenders hereunder or thereunder.
"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products, polychlorinated biphenyls, urea-formaldehyde insulation,
asbestos or asbestos-containing materials, 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
liability under any Environmental Law.
"Merrill Lynch": Merrill Lynch Capital Corporation.
"Moody's": as defined in the definition of "Cash Equivalents."
"Mortgages": collectively, the Fee Mortgages and the Leasehold
Mortgages.
"Motor Wheel": Motor Wheel Corporation, an Ohio corporation,
and a Subsidiary of the Borrower.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"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
<PAGE> 29
23
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 disposition,
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 disposition 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 issuance,
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 thereafter.
"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
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 Borrower or any of its
Subsidiaries, in each case, other than in the ordinary course of
business and permitted by subsection 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 restructuring 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., Chase
Equity Associates, L.P., the Lemmerz Shareholders and their respective
Affiliates.
"Non-Dollar Indebtedness": at any time, all Indebtedness of
the Borrower and its Subsidiaries then denominated in a currency other
than Dollars.
"Non-Excluded Taxes": as defined in subsection 4.11.
<PAGE> 30
24
"Notes": collectively, the Revolving Credit Notes, the Swing
Line Note and the Term Notes, if any.
"Notice of Foreign Currency Swing Line Refunding": as defined
in subsection 2.6(e)(i).
"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 Agreement": the Hayes Wheels Int'l Inc. - PBGC Agreement
dated July 2, 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 subsection
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 Section 3(5) of ERISA.
"Prior Credit Agreement": as defined in the recitals hereto.
"Pro-Forma Leverage Ratio": at the time of and after giving
effect to any Investment described in clause (y) of the proviso to
subsection 8.10(e), the ratio of (a) Total Indebtedness then
outstanding to (b) EBITDA for the four quarter period then most
recently ended for which financial statements shall have been
delivered to the Lenders pursuant to subsection 7.1(a) or (b) (after
giving effect, in the case of any calculations occurring as of April
30, 1998, to the Interim Adjustments and with EBITDA being calculated
on the assumption that such Investment had been completed on the first
day of such period).
"Purchase Agreement": the Purchase Agreement, dated as of June
6, 1997, among Hayes Wheels International, Inc., Cromodora Wheels
S.p.A., Lemmerz Holding GmbH and the Lemmerz Shareholders, as amended,
supplemented or otherwise modified from time to time.
"Refinancing": as defined in the recitals hereto.
"Refunded Dollar Swing Line Loans": as defined in subsection
2.6(d)(i).
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25
"Register": as defined in subsection 11.6(d).
"Reimbursement Obligations": the obligation of the Borrower to
reimburse the Issuing Lenders pursuant to subsection 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 Certificate 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 applicable 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 Assignee
pursuant to subsection 11.6 (in each case as such amount may be
adjusted from time to time as provided herein).
"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 the Dollar Equivalent Amount of (a)
such Lender's then outstanding Revolving Credit Loans plus (b) such
Lender's interests in the aggregate L/C Obligations and Swing Line
Loans then outstanding then constitutes of (ii) the sum of the Dollar
Equivalent Amount 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.
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"Revolving Credit Commitment Termination Date": the earlier of
(a) July 31, 2003 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 Lender": any Lender having a Revolving
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": collectively, 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 Documents or to
secure any guarantee of any such obligations and liabilities,
including, without limitation, any security document delivered
pursuant to subsection 7.10.
"Seller Preferred Stock": as defined in the recitals hereto.
"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 Subordinated Notes Indenture, as the
same may be amended, supplemented or otherwise modified from time to
time in accordance with subsection 8.11.
"Senior Subordinated Notes Indenture": the Indenture dated as
of June 27, 1996 between the Borrower and First Trust National
Association as successor to 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.
"Specified Assets": those assets specified in the letter,
dated June 30, 1997, from the Borrower to the Managing Agents and the
Lenders identifying certain assets of the Borrower and its
Subsidiaries which the Borrower proposes to sell.
"Specified Investments": those Investments specified in the
letter, dated June 30, 1997, from the Borrower to the Managing Agents
and the Lenders identifying
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27
certain Investments proposed to be made by the Borrower and/or
one or more of its Subsidiaries .
"S&P": as defined in the definition of "Cash Equivalents."
"Subsidiary": as to any Person, a corporation, partnership,
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 directors 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.
"Swing Line Loans": collectively, Dollar Swing Line Loans and
Foreign Currency Swing Line Loans.
"Swing Line Note": as defined in subsection 2.6(c).
"Swing Line Lenders": collectively, the Dollar Swing Line
Lender and the Foreign Currency Swing Line Lenders.
"Term Loan": as defined in subsection 2.7.
"Term Loan Lenders": collectively, the Tranche A-1 Term Loan
Lenders, the Tranche A-2 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 2.11.
"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": collectively, Eurocurrency 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, 2003.
"Tranche A Term Loans": collectively, the Tranche A-1 Term
Loans and the Tranche A-2 Term Loans.
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"Tranche A-1 Term Loan Commitment Percentage": as to any
Tranche A-1 Term Loan Lender, the percentage of the aggregate
outstanding Tranche A-1 Term Loans constituted by its Tranche A-1 Term
Loan.
"Tranche A-1 Term Loan Lender": any Lender that holds
outstanding Tranche A-1 Term Loans.
"Tranche A-1 Term Loan": as defined in subsection 2.7.
"Tranche A-1 Term Note": as defined in subsection 2.8(a).
"Tranche A-2 Term Loan Commitment": as to any Tranche A-2 Term
Loan Lender, its obligation to make a Tranche A-2 Term Loan to the
Borrower in Deutschemarks pursuant to subsection 2.7 in a Dollar
Equivalent Amount equal to the amount set forth opposite such Tranche
A-2 Term Loan Lender's name in Schedule A under the heading "Tranche
A-2 Term Loan Commitment", collectively, the "Tranche A-2 Term Loan
Commitments".
"Tranche A-2 Term Loan Commitment Percentage": as to any
Tranche A-2 Term Loan Lender, the percentage of the aggregate Tranche
A-2 Term Loan Commitments constituted by its Tranche A-2 Term Loan
Commitment or, following the Closing Date, the percentage of the
aggregate outstanding Tranche A-2 Term Loans constituted by its
Tranche A-2 Term Loan.
"Tranche A-2 Term Loan Lender": any Lender having a Tranche
A-2 Term Loan Commitment hereunder or that holds outstanding Tranche
A-2 Term Loans.
"Tranche A-2 Term Loan": as defined in subsection 2.7.
"Tranche A-2 Term Note": as defined in subsection 2.9(a).
"Tranche B Maturity Date": July 31, 2004.
"Tranche B Term Loan Commitment Percentage": as to any Tranche
B Term Loan Lender, the percentage of the aggregate outstanding
Tranche B Term Loans constituted by its Tranche B Term Loan.
"Tranche B Term Loan Lender": any Lender 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, 2005.
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"Tranche C Term Loan Commitment Percentage": as to any Tranche
C Term Loan Lender, the percentage of the aggregate outstanding
Tranche C Term Loans constituted by its Tranche C Term Loan.
"Tranche C Term Loan Lender": any Lender 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 2.11(a).
"Transactions": collectively, the Acquisition, the
Refinancing, the issuance of the High Yield Indebtedness and the
Consent Solicitation.
"Transaction Documents": collectively, the Purchase Agreement,
the High-Yield Indebtedness Indenture and the other documents listed
on Schedule C executed in connection with the Transactions, as the
same may be amended, supplemented 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
Eurocurrency 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.
"United States": the United States of America.
"Wholly Owned Subsidiary": means any Subsidiary, all of the
outstanding voting securities (other than directors' qualifying shares
or shares held pursuant to similar requirements of law in respect of
Foreign Subsidiaries and other than shares of Lemmerz representing not
more than .01% of the voting securities thereof) of which are owned,
directly or indirectly, by the 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 Current 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.
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30
(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 defined, 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 severally 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 Dollars and/or one or more Available
Foreign Currencies so long as after giving effect thereto (i) the Available
Revolving Credit Commitment of such Revolving Credit Lender would not be less
than zero, (ii) the Aggregate Revolving Credit Outstandings would not exceed
the aggregate amount of the Revolving Credit Commitments of all the Revolving
Credit Lenders, and (iii) the then Dollar Equivalent Amount of the Foreign
Currency Sublimit Outstandings would not exceed the Foreign Currency
Subfacility Amount. 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 that (I) not more than
$150,000,000 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)
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 (as certified to
the Administrative Agent pursuant to subsection 7.2(b)(iv)).
(b) The Revolving Credit Loans may from time to time be (i)
Eurocurrency Loans, (ii) ABR Loans (in the case of Dollar Revolving Credit
Loans only) 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 Eurocurrency Loan
after the day that is one month prior to the Revolving 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
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31
Date or in connection with any assignment pursuant to subsection 11.6, to
evidence such Lender's Dollar 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 Dollar 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
Administrative Agent prior to 11:00 A.M., New York City time, (a) four Business
Days (or three Business Days if the Revolving Credit Loans requested are to be
denominated in Dollars) prior to the requested Borrowing Date, if all or any
part of the requested Revolving Credit Loans are to be initially Eurocurrency
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 Eurocurrency Loans, ABR Loans or a combination thereof,
(iv) the applicable Currency and (v) if the borrowing is to be entirely or
partly of Eurocurrency Loans, the respective amount of such Type of Loan and
the respective 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 of $500,000 in excess
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
Eurocurrency Loans, the Dollar Equivalent Amount of $5,000,000 or a whole
multiple of $1,000,000 in excess thereof. Upon receipt of any such notice from
the Borrower, the Administrative 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 Administrative Agent for
the account of the Borrower at the office of the Administrative Agent specified
from time to time by the Administrative Agent prior to (i) in the case of
borrowings in Dollars, 1:00 P.M., New York City time or (ii) in the case of
borrowings in Available Foreign Currencies, 10:00 A.M., New York City time, on
the Borrowing Date requested by the Borrower in the requested Currency in funds
immediately available to the Administrative Agent. Such borrowing will then be
made available to the Borrower by the Administrative Agent crediting the
account of the Borrower as previously specified in writing by the Borrower to
the Administrative Agent with the aggregate of the amounts made available to
the Administrative Agent by the Revolving Credit Lenders and in like funds as
received by the Administrative 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 Applicable Commitment
<PAGE> 38
32
Fee Rate 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 Letters dated May 21, 1997 among CIBC,
Merrill Lynch 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, (i) the Available Revolving Credit Commitment of
each Revolving Credit Lender would be less than zero, (ii) the Aggregate
Revolving Credit Outstandings would exceed the aggregate amount of the
Revolving Credit Commitments of all the Revolving Credit Lenders or (iii) the
then Dollar Equivalent Amount of the Foreign Currency Sublimit Outstandings
would exceed the Foreign Currency Subfacility Amount. 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 permanently the Revolving Credit Commitments then in
effect.
(b) The Revolving Credit Commitments shall be automatically
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 Dollar Swing Line Lender agrees to make swing line loans
denominated in Dollars ("Dollar 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, when added to the Dollar Equivalent Amount
of then outstanding Foreign Currency Swing Line Loans provided for (and as
calculated in) subsection 2.6(b), not to exceed the Dollar Swing Line
Commitment, provided that no Dollar Swing Line Loan shall be required to be
made hereunder unless, after giving effect thereto, (i) the Available Revolving
Credit Commitment of each Revolving Credit Lender would not be less than zero
and (ii) the Aggregate Revolving Credit Outstandings would not exceed the
aggregate amount of the Revolving Credit Commitments of all the Revolving
Credit Lenders. Amounts borrowed by the Borrower under this subsection 2.6(a)
may be repaid and, through but excluding the Revolving Credit Commitment
Termination Date, reborrowed. All Dollar Swing Line Loans shall be made as ABR
Loans and shall not be entitled to be converted into Eurocurrency Loans. The
Borrower shall give the Dollar Swing Line Lender irrevocable notice (which
notice must be received by the Dollar Swing Line Lender prior to 12:00 Noon,
New York City time) on the requested Borrowing Date specifying the amount of
the requested Dollar
<PAGE> 39
33
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 each Dollar Swing Line
Loan will be made available on the date requested by the Dollar Swing Line
Lender to the Borrower by crediting the account of the Borrower as specified in
writing by the Borrower to the Administrative Agent with such proceeds in
Dollars.
(b) The Borrower may, subject to the terms and conditions of this
Agreement, borrow swing line loans denominated in Available Foreign Currencies
("Foreign Currency Swing Line Loans") from any Foreign Currency Swing Line
Lender from time to time during the Revolving Credit Commitment Period upon the
extension of a Foreign Currency Swing Line Commitment (as hereafter defined) on
such terms and conditions as may be agreed to by the Borrower and such Foreign
Currency Swing Line Lender, including, but not limited to, the applicable
Available Foreign Currency, the procedures for the Foreign Currency Swing Line
Lender to make the proceeds of such Foreign Currency Swing Line Loans available
to the Borrower (including, without limitation, the lending installation from
which such Foreign Currency Swing Line Loan is to be made), the applicable
interest rate, the manner of calculation of the applicable interest rate, the
maximum aggregate principal Dollar Equivalent Amount of Foreign Currency Swing
Line Loans that such Foreign Currency Swing Line Lender shall commit to lend to
the Borrower in such Available Foreign Currency (such amount, a "Foreign
Currency Swing Line Commitment") and the duration of such Foreign Currency
Swing Line Commitment, provided that such terms and conditions shall not be
inconsistent with the limitations on Foreign Currency Swing Line Commitments
and Foreign Currency Swing Line Loans set forth in this subsection and
elsewhere in this Agreement. No loan made under a Foreign Currency Swing Line
Commitment shall be treated as a Foreign Currency Swing Line Loan for purposes
of this Agreement and the other Loan Documents, including, but not limited to,
for the purposes of entitling such loans to the benefits of subsection 2.6(e),
unless and until the Borrower and the applicable Foreign Currency Swing Line
Lender shall have informed the Administrative Agent in writing of the Dollar
Equivalent Amount of the Foreign Currency Swing Line Commitment of such Foreign
Currency Swing Line Lender and all other terms and conditions thereof. At any
time, and from time to time thereafter, subject to the terms and conditions of
this Agreement, the Borrower may borrow Foreign Currency Swing Line Loans from
such Foreign Currency Swing Line Lender in an amount equal to the then unused
amount of the Foreign Currency Swing Line Commitment of such Foreign Currency
Swing Line Lender. Anything in this Agreement to the contrary notwithstanding,
in any determination of the aggregate amount of outstanding Foreign Currency
Swing Line Loans at any time for all purposes of this Agreement and the other
Loan Documents (excluding any determinations of the unused amount of any
Foreign Currency Swing Line Commitment for purposes of the preceding sentence),
the full Dollar Equivalent Amount (calculated in each case on the date such
Foreign Currency Swing Line Commitment is originally extended) of each Foreign
Currency Swing Line Commitment of each Foreign Currency Swing Line Lender
(other than CIBC) shall be deemed to be outstanding as Foreign Currency Swing
Line Loans, whether borrowed or not borrowed, and only the aggregate principal
Dollar Equivalent Amount of the then outstanding Foreign Currency Swing Line
Loans made by CIBC shall be included in such determination; provided, further,
that at no time shall any Foreign Currency Swing Line Loan Commitment be
extended, or Foreign Currency Swing Line Loan be made, by a Foreign Currency
Swing Line
<PAGE> 40
34
Lender or accepted by the Borrower if, after giving effect thereto, (i) the
aggregate Dollar Equivalent Amount (calculated, in the case of each Foreign
Currency Swing Line Commitment, on the date such Foreign Swing Line Commitment
is originally extended) of the Foreign Currency Swing Line Loans and of the
Foreign Currency Swing Line Commitments (as the case may be as provided for
above) of all the Foreign Currency Swing Line Lenders exceed the Foreign
Currency Swing Line Subfacility or (ii) the sum of (A) the aggregate principal
amount of the Dollar Swing Line Loans and (B) aggregate Dollar Equivalent
Amount (calculated, in the case of each Foreign Currency Swing Line Commitment,
on the date such Foreign Swing Line Commitment is originally extended) of the
Foreign Currency Swing Line Loans and the Foreign Currency Swing Line
Commitments (as the case may be as provided for above) exceed the Swing Line
Commitment and provided, further, however, that at no time shall any Foreign
Currency Swing Line Loan Commitment be extended, or Foreign Currency Swing Line
Loan be made, by a Foreign Currency Swing Line Lender or accepted by the
Borrower if, after giving effect thereto, (I) the Available Revolving Credit
Commitment of a Revolving Credit Lender would be less than zero or (II) the
Aggregate Revolving Credit Outstandings would exceed the aggregate amount of
the Revolving Credit Commitments of all the Revolving Credit Lenders.
(c) The Borrower agrees that, upon the request to the
Administrative Agent by the Dollar 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 Dollar Swing Line Loans the Borrower will execute and deliver
to the Dollar Swing Line Lender a promissory note substantially in the form of
Exhibit A-6, 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 Dollar Swing Line Lender and representing
the obligation of the Borrower to pay the amount of the Dollar Swing Line
Commitment or, if less, the unpaid principal amount of the Dollar Swing Line
Loans made to the Borrower by the Dollar Swing Line Lender, 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.
(d) (i) The Dollar Swing Line Lender, at any time in its sole
and absolute discretion may, and, at any time as there shall be a Dollar Swing
Line Loan outstanding for more than seven Business Days, the Dollar Swing Line
Lender shall, on behalf of the Borrower (which hereby irrevocably directs and
authorizes the Dollar Swing Line Lender to act on its behalf), request each
Revolving Credit Lender, including the Swing Line Lenders, to make a Revolving
Credit Loan as an ABR Loan in Dollars in an amount equal to such Revolving
Credit Lender's Revolving Credit Commitment Percentage of the principal amount
of all of the Dollar Swing Line Loans (the "Refunded Dollar 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
Dollar Swing Line Loans in accordance with the provisions of subsection 4.2.
Unless the Revolving 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 paragraph (d)(ii) of this subsection 2.6 shall
apply), and
<PAGE> 41
35
without regard to whether the conditions precedent in subsection 6.2 are
satisfied, each Revolving Credit Lender will make the proceeds of its Revolving
Credit Loan available to the Administrative Agent for the account of the Dollar
Swing Line Lender at the office of the Administrative Agent specified by 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 Dollar Swing Line Loans.
(ii) 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 Dollar Swing Line Loans are outstanding,
each Revolving Credit Lender shall, at the option of the Dollar Swing Line
Lender exercised reasonably, either (i) notwithstanding the expiration or
termination of the Revolving Credit Commitments and without regard to whether
the conditions precedent in subsection 6.2 are satisfied, 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 participating interest in such Dollar
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 Dollar 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 Dollar Swing Line Lender at the
office of the Administrative Agent specified by the Administrative 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 terminate. The proceeds of such Revolving Credit Loans shall be
immediately applied to repay the Dollar 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)(ii), each
Revolving Credit Lender shall immediately transfer to the Dollar Swing Line
Lender, in immediately available funds, the amount of its participation.
(iii) Whenever, at any time after the Dollar Swing
Line Lender has received from any Revolving Credit Lender such Revolving Credit
Lender's participating interest in a Dollar Swing Line Loan and the Dollar
Swing Line Lender receives any payment on account thereof, the Dollar 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 that in
the event that such payment received by the Dollar Swing Line Lender is
required to be returned such Revolving Credit Lender will return to the Dollar
Swing Line Lender any portion thereof previously distributed by the Dollar
Swing Line Lender to it.
(e) (i) Subject to the provisions of the second sentence of
subsection 2.6(b), if any Event of Default shall occur and be continuing, any
Foreign Currency Swing Line Lender
<PAGE> 42
36
may, in its sole and absolute discretion, direct that the Foreign Currency
Swing Line Loans owing to it be refunded, by delivering a notice (with such
detail as the Administrative Agent shall request, a "Notice of Foreign Currency
Swing Line Refunding") to the Administrative Agent. Upon receipt of such
notice, the Administrative Agent shall (i) promptly give notice of the contents
thereof to the Revolving Credit Lenders and, unless an Event of Default
described in paragraph (f) of Section 9 in respect of the Borrower has
occurred, to the Borrower and (ii) calculate the Dollar Equivalent Amount of
the aggregate principal amount of the Foreign Currency Swing Line Loans of such
Foreign Currency Swing Line Lender outstanding as of the date the
Administrative Agent received such Notice of Foreign Currency Swing Line
Refunding (the "Dollar Refunding Amount"). Each such Notice of Foreign
Currency Swing Line Refunding shall be deemed to constitute delivery by the
Borrower of a notice to the Administrative Agent requesting each Revolving
Credit Lender to make a Revolving Credit Loan denominated in Dollars in an
amount equal to such Revolving Credit Lender's Revolving Credit Commitment
Percentage of the Dollar Refunding Amount as an ABR Loan. Unless the Revolving
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 paragraph (e)(ii) of this subsection 2.6 shall apply), and
without regard to whether the conditions precedent in subsection 6.2 are
satisfied, each Revolving Credit Lender will make the proceeds of its Revolving
Credit Loan available to the Administrative Agent for the account of the
applicable Foreign Currency Swing Line Lender at the office of the
Administrative Agent specified by 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 to the applicable Foreign
Currency Swing Line Lender the Dollar Refunding Amount.
(ii) 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 Foreign Currency Swing Line Loans made by a
Foreign Currency Swing Line Lender are outstanding, each Revolving Credit
Lender shall, at the option of the applicable Foreign Currency Swing Line
Lender exercised reasonably, either (i) notwithstanding the expiration or
termination of the Revolving Credit Commitments and without regard to whether
the conditions precedent in subsection 6.2 are satisfied, make a Revolving
Credit Loan as an ABR Loan denominated in Dollars (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 participating
interest in the Foreign Currency Swing Line Loans of such Foreign Currency
Swing Line Lender, in either case, in a Dollar Equivalent 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 Foreign
Currency 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
applicable Foreign Currency 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
<PAGE> 43
37
Day next succeeding the date on which the Revolving Credit Commitments expire
or terminate. The proceeds of such Revolving Credit Loans shall be immediately
applied to repay the Foreign Currency Swing Line Loans of such Foreign Currency
Swing Line Lender 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 (e)(ii), each Revolving Credit Lender shall immediately transfer
to the applicable Foreign Currency Swing Line Lender, in immediately available
funds, the amount of its participation.
(iii) Whenever, at any time after a Foreign Currency
Swing Line Lender has received from any Revolving Credit Lender such Revolving
Credit Lender's participating interest in a Foreign Currency Swing Line Loan
made by such Foreign Currency Swing Line Lender and such Foreign Currency Swing
Line Lender receives any payment on account thereof, such Foreign Currency
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
that in the event that such payment received by such Foreign Currency Swing
Line Lender is required to be returned such Revolving Credit Lender will return
to such Foreign Currency Swing Line Lender any portion thereof previously
distributed by such Foreign Currency Swing Line Lender to it.
(f) Notwithstanding anything herein to the contrary, neither
the Dollar Swing Line Lender nor any Foreign Currency Swing Line Lender shall
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, (a) on the Closing Date, to continue a term loan
in Dollars (a "Tranche A-1 Term Loan") in the principal amount set forth under
such Lender's name in Schedule A opposite the heading "Tranche A-1 Term Loans",
(b) on July 1, 1997, to make a term loan in Deutschemarks (a "Tranche A-2 Term
Loan") in a principal Dollar Equivalent Amount set forth under such Lender's
name in Schedule A opposite the heading "Tranche A-2 Term Loan Commitment", (c)
on the Closing Date, to continue a term loan in Dollars (a "Tranche B Term
Loan") in the principal amount set forth under such Lender's name in Schedule A
opposite the heading "Tranche B Term Loans", and/or (d) on the Closing Date, to
continue a term loan in Dollars (a "Tranche C Term Loan", and together with the
Tranche A-1 Term Loans, the Tranche A-2 Term Loans and the Tranche B Term
Loans, the "Term Loans") in the principal amount set forth under such Lender's
name in Schedule A opposite the heading "Tranche C Term Loans". The Term Loans
may from time to time be (a) Eurocurrency Loans, (b) ABR Loans (other than in
the case of a Tranche A-2 Term Loan) 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, 2.10 or 2.11 may not be reborrowed.
2.8 Tranche A-1 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
<PAGE> 44
38
such Lender's Tranche A-1 Term Loan the Borrower will execute and deliver to
such Lender a promissory note substantially in the form of Exhibit A-2 (each,
as amended, supplemented, replaced or otherwise modified from time to time, a
"Tranche A-1 Term Note"), with appropriate insertions therein as to payee, date
and principal amount, payable to the order of such Tranche A-1 Term Loan Lender
and in a principal amount equal to the amount set forth under such Tranche A-1
Term Loan Lender's name on Schedule A opposite the heading "Tranche A-1 Term
Loans." Any Tranche A-1 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. Each Lender which on the Closing
Date is the holder of a Tranche A-1 Term Note issued pursuant to the Prior
Credit Agreement shall on such date deliver such Tranche A-1 Term Note to the
Administrative Agent marked "superseded", and will accept, in substitution for
and replacement of (but not in satisfaction of) such existing Tranche A-1 Term
Note (to the extent of the Tranche A-1 Term Loan evidenced thereby), a Tranche
A-1 Term Note meeting the requirements of this subsection; the Administrative
Agent will on the Closing Date deliver to the Borrower all such existing
Tranche A-1 Term Notes received by the Administrative Agent on or before such
date.
(b) The Tranche A-1 Term Loans shall be payable in 22
consecutive quarterly installments on the dates and in the aggregate principal
amount (together with all accrued interest thereon) set forth below opposite
the applicable installment date (or, if less, the aggregate amount of the
Tranche A-1 Term Loans then outstanding):
<TABLE>
<CAPTION>
Installment Amount
----------- ------
<S> <C>
April 30, 1998 $3,250,000
July 31, 1998 3,250,000
October 31, 1998 3,250,000
January 31, 1999 3,250,000
April 30, 1999 7,000,000
July 31, 1999 7,000,000
October 31, 1999 7,000,000
January 31, 2000 7,000,000
April 30, 2000 8,500,000
July 31, 2000 8,500,000
October 31, 2000 8,500,000
January 31, 2001 8,500,000
April 30, 2001 9,000,000
July 31, 2001 9,000,000
October 31, 2001 9,000,000
January 31, 2002 9,000,000
April 30, 2002 11,000,000
July 31, 2002 11,000,000
October 31, 2002 11,000,000
January 31, 2003 11,000,000
April 30, 2003 9,000,000
July 31, 2003 9,000,000
-----------
</TABLE>
<PAGE> 45
39
<TABLE>
<S> <C>
Total $173,000,000
</TABLE>
2.9 Tranche A-2 Term Notes. (a) The Borrower agrees that,
upon the request to the Administrative Agent by any Tranche A-2 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-2
Term Loan the Borrower will execute and deliver to such Lender a promissory
note substantially in the form of Exhibit A-3 (each, as amended, supplemented,
replaced or otherwise modified from time to time, a "Tranche A-2 Term Note"),
with appropriate insertions therein as to payee, date and principal amount,
payable to the order of such Tranche A-2 Term Loan Lender and in a principal
amount equal to the amount set forth under such Tranche A-2 Term Loan Lender's
name on Schedule A opposite the heading "Tranche A-2 Term Loan Commitment."
Any Tranche A 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 A-2 Term Loans shall be payable in 18
consecutive quarterly installments on the dates and in the aggregate
principal amount (together with all accrued interest thereon) equal to the
percentages set forth below opposite the applicable installment date multiplied
by the aggregate original principal amount of the Tranche A-2 Term Loans (or,
if less, the aggregate amount of the Tranche A-2 Term Loans then outstanding):
<TABLE>
<CAPTION>
Installment Percentage
----------- ----------
<S> <C>
April 30, 1999 1.875%
July 31, 1999 1.875
October 31, 1999 1.875
January 31, 2000 1.875
April 30, 2000 3.750
July 31, 2000 3.750
October 31, 2000 3.750
January 31, 2001 3.750
April 30, 2001 5.000
July 31, 2001 5.000
October 31, 2001 5.000
January 31, 2002 5.000
April 30, 2002 5.000
July 31, 2002 5.000
October 31, 2002 5.000
January 31, 2003 5.000
April 30, 2003 18.750
July 31, 2003 18.750
------
Total 100%
</TABLE>
2.10 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
<PAGE> 46
40
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 substantially in the form of Exhibit
A-4 (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 Schedule A opposite the heading "Tranche B
Term Loans." Any Tranche B 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 accordance with subsection 4.1. Each Lender which on the
Closing Date is the holder of a Tranche B Term Note issued pursuant to the
Prior Credit Agreement shall on such date deliver such Tranche B Term Note to
the Administrative Agent marked "superseded", and will accept, in substitution
for and replacement of (but not in satisfaction of) such existing Tranche B
Term Note (to the extent of the Tranche B Term Loan evidenced thereby), a
Tranche B Term Note meeting the requirements of this subsection; the
Administrative Agent will on the Closing Date deliver to the Borrower all such
existing Tranche B Term Notes received by the Administrative Agent on or before
such date.
(b) The Tranche B Term Loans shall be payable in 26 consecutive quarterly
installments 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 B Term Loans
then outstanding):
Installment Amount
----------- ------
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 312,500
July 31, 2002 312,500
October 31, 2002 312,500
January 31, 2003 312,500
<PAGE> 47
41
Installment Amount
----------- ------
April 30, 2003 10,000,000
July 31, 2003 10,000,000
October 31, 2003 10,000,000
January 31, 2004 10,000,000
April 30, 2004 31,375,000
July 31, 2004 31,375,000
----------
Total $109,000,000
2.11 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 substantially in the
form of Exhibit A-5 (each, as amended, supplemented, replaced or otherwise
modified from time to time, a "Tranche C Term Note"; and together with the
Tranche A-1 Term Notes, the Tranche A-2 Term Notes and the Tranche B Term
Notes, the "Term Notes"), with appropriate insertions 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
Loans." Any Tranche C Term Note shall (i) be dated the Closing Date, (ii) be
payable as provided in subsection 2.11(b) and (iii) provide for the payment of
interest in accordance with subsection 4.1. Each Lender which on the Closing
Date is the holder of a Tranche C Term Note issued pursuant to the Prior Credit
Agreement shall on such date deliver such Tranche C Term Note to the
Administrative Agent marked "superseded", and will accept, in substitution for
and replacement of (but not in satisfaction of) such existing Tranche C Term
Note (to the extent of the Term Loan evidenced thereby), a Tranche C Term Note
meeting the requirements of this subsection; the Administrative Agent will on
the Closing Date deliver to the Borrower all such existing Tranche C Term Notes
received by the Administrative Agent on or before such date.
(b) The Tranche C Term Loans shall be payable in 30 consecutive
quarterly installments, 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, 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
<PAGE> 48
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Installment Amount
----------- ------
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 250,000
July 31, 2003 250,000
October 31, 2003 250,000
January 31, 2004 250,000
April 30, 2004 2,500,000
July 31, 2004 2,500,000
October 31, 2004 2,500,000
January 31, 2005 2,500,000
April 30, 2005 36,250,000
July 31, 2005 36,250,000
----------
Total $88,500,000
2.12 Procedure for Tranche A-2 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,
three Business Days prior to the Closing Date requesting that the Tranche A-2
Term Loan Lenders make the Tranche A-2 Term Loans on the Closing Date and
specifying the length of the initial Interest Periods therefor. Upon receipt
of such notice, the Administrative Agent shall promptly notify each Tranche A-2
Term Loan Lender thereof. On the Closing Date, each Tranche A-2 Term Loan
Lender shall make available to the Administrative Agent at the office of the
Administrative Agent specified by the Administrative Agent the amount in
Deutschemarks in immediately available funds equal to the Tranche A-2 Term Loan
to be made by such Tranche A-2 Term Loan Lender. The Administrative Agent
shall on such date credit the account of the Borrower previously specified in
writing by the Borrower to the Administrative Agent with the aggregate of the
amounts made available to the Administrative Agent by the Tranche A-2 Term Loan
Lenders.
2.13 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 Dollar Swing Line
Lender and each Foreign Currency Swing Line Lender, the then unpaid principal
amount of the Dollar Swing Line Loans or Foreign Currency Swing Line Loans, as
<PAGE> 49
43
the case may be, 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-1 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-1 Term Loans become due and
payable pursuant to Section 9); (iv) each Tranche A-2 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 A-2 Term Loans become due and
payable pursuant to Section 9); (v) each Tranche B Term Loan Lender, the
amounts specified in subsection 2.10(b) on the dates specified in subsection
2.10(b) (or such earlier date on which the Tranche B Term Loans become due and
payable pursuant to Section 9); and (vi) each Tranche C Term Loan Lender, the
amounts specified in subsection 2.11(b) on the dates specified in subsection
2.11(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 Lenders) 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 (other than a Foreign Currency Swing Line
Loan made by a Foreign Currency Swing Line Lender other than CIBC) 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 with respect to each
such Loan 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 2.13(c) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided 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. The Borrower
shall repay each Loan made to it, and interest thereon, in the Currency in
which such Loan is denominated.
<PAGE> 50
44
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. 1. Subject to the terms and conditions hereof,
the Issuing Lender, in reliance on the agreements of the other Revolving Credit
Lenders set forth in subsection 3.4(a), agrees to issue letters of credit
("Letters of Credit") denominated in Dollars or an Available Foreign Currency
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, a. the
Dollar Equivalent Amount of the aggregate L/C Obligations would exceed the L/C
Commitment, b. the Available Revolving Credit Commitment of any Revolving
Credit Lender would be less than zero, (iii) the Aggregate Revolving Credit
Outstandings would exceed the aggregate amount of the Revolving Credit
Commitments of all the Revolving Credit Lenders, or (iv) the then Dollar
Equivalent Amount of the Foreign Currency Sublimit Outstandings would exceed
the Foreign Currency Subfacility Amount. All letters of credit issued pursuant
to the Prior Credit Agreement shall, at all times on or after the Closing Date,
be deemed to be "Letters of Credit" for all purposes of this Agreement and the
other Loan Documents.
(b) Each Letter of Credit shall (i) 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 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 (ii) 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 or, in any case where the Issuing Lender issues such Letters of Credit
from an office located outside of the United States, the laws of the
jurisdiction in which such office is located.
(d) The Issuing Lender shall not at any time be obligated to issue
any Letter of Credit hereunder if such issuance 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 satisfaction
of the Issuing Lender, and such other certificates, documents 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
<PAGE> 51
45
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 Borrower. 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
payable in Dollars in the Dollar Equivalent Amount of the amount of such fee
calculated in the Currency in which such Letter of Credit is denominated,
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 at a rate per annum
equal to the Applicable Margin in effect during such period for Eurocurrency
Loans that are Revolving Credit Loans (on the basis of the actual number of
days elapsed over a 360-day year) on the aggregate face amount of Letters of
Credit outstanding during such period, 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 on the aggregate
face amount of outstanding Letters of Credit, payable in Dollars in the Dollar
Equivalent Amount of the amount of such fee calculated in Currency in which
such Letter of Credit is denominated 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 Administrative Agent for their respective accounts
pursuant to this subsection.
3.4 L/C Participations. 1. The Issuing Lender irrevocably agrees to
grant and hereby grants to each L/C Participant, 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 Commitment 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 in
the Currency
<PAGE> 52
46
in which such Letter of Credit is denominated 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) (A) in the case of
any such payment obligation denominated in Dollars, the daily average Federal
Funds Rate, as quoted by the Issuing Lender, or (B) in the case of any such
payment obligation denominated in an Available Foreign Currency, the rate
customary in such Available Foreign Currency for settlement of similar
interbank obligations, as quoted by the Issuing Lender, in each case, 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 entitled
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, in the case of payment obligations denominated in Dollars, or
the rate per annum applicable to Eurocurrency Loans having an Interest period
of one day, in the case of payment obligations denominated in an Available
Foreign Currency. 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 succeeding Business
Day; provided 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
<PAGE> 53
47
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 presented 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 the Currency in which the
applicable Letter of Credit is denominated 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 are drawn
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, in the case
of any Dollar Letter of Credit, or Eurocurrency Loans having Interest Periods
of one day which were then overdue, in the case of any Foreign Currency Letter
of Credit (unless such drawing occurs after 11:00 A.M. New York City time on
the date of drawing and the Borrower would be able to satisfy the conditions to
borrowing Revolving Credit Loans on such date in an amount at least equal to
the amount of such drawing, in which case, interest shall be payable for the
first day after such drawing at the respective rates for the applicable type of
Loans that are not 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 (or, in the case of a
drawing under a Foreign Currency Letter of Credit, the Dollar Equivalent Amount
of 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 obligations 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 and any L/C
Participant that the Issuing Lender and any L/C Participant 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, fraudulent 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.
<PAGE> 54
48
(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 responsibility 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 Eurocurrency Loan
shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurocurrency 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 otherwise), 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 provisions 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 principal,
interest, commitment fee or other amount is paid in full (as well after as
before judgment).
<PAGE> 55
49
(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 Eurocurrency Loans) or (y) same-day irrevocable notice to
the Administrative Agent (in the case of ABR Loans, including Dollar Swing Line
Loans or to the applicable Foreign Currency Swing Line Lender in the case of
Foreign Currency Swing Line Loans), (ii) such notice specifies, in the case of
any prepayment of Loans, the date, Currency and amount of prepayment and
whether the prepayment is (x) of Term Loans, Revolving Credit Loans or Dollar
Swing Line Loans, Foreign Currency Swing Line Loans, or a combination thereof,
and in each case if a combination thereof, the amount allocable to each, (y) of
Eurocurrency Loans, ABR Loans or a combination thereof, and, in each case if a
combination thereof, the principal amount allocable to each and (iii) each
prepayment is in a minimum principal Dollar Equivalent 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 then outstanding principal Dollar Equivalent Amounts) to the Tranche
A-1 Term Loans, the Tranche A-2 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 pro rata (based on then outstanding principal
Dollar Equivalent Amounts, determined, in the case of Foreign Currency Swing
Line Loans, in accordance with the provisions of subsection 2.6(b)), 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 Administrative Agent, provided that the Borrower shall have the right,
exercisable by giving written notice thereof to the Administrative Agent at
least three Business Days prior to the affected prepayment, to allocate in its
sole discretion as between the Tranche A-1 Term Loans, on the one hand, and the
Tranche A-2 Term Loans, on the other hand, the aggregate amount otherwise
payable in respect of such Loans in accordance with this sentence.
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).
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(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 subsections 8.2 or 8.2A (except paragraph (g)
thereof)), 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), (g) or (i), then 100% of the
portion of such Net Cash Proceeds required by subsection 8.6(b), (g) or (i), 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 the Dollar Equivalent Amount of
$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 make Investments 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 accordance with subsection 8.6(b) or (i), as the case may be, 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 Revolving
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 Lenders) 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 Lenders) exceeds the aggregate Revolving Credit
Commitments then in effect, 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 a
payment has caused the Aggregate Outstanding Revolving Credit with respect to
all Rebolving 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
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51
used to cash collateralize the then outstanding L/C Obligations 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 as follows: first, the first $200,000,000 of Net Cash
Proceeds shall be applied pro rata (based on their outstanding principal Dollar
Equivalent Amounts) to the Tranche A-1 Term Loans, the Tranche B Term Loans and
the Tranche C Term Loans, second, to the Tranche A-1 Term Loans and/or the
Tranche A-2 Term Loans such that after the application of such Net Cash
Proceeds the aggregate principal Dollar Equivalent Amount of the Tranche A-1
Term Loans and the Tranche A-2 Term Loans are equal, and third, pro rata (based
on their outstanding principal Dollar Equivalent Amounts) to the Tranche A-1
Term Loans, the Tranche A-2 Term Loans, the Tranche B Term Loans and the
Tranche C Term Loans and, in each case, pro rata to the respective installments
of principal thereof, provided that the Borrower shall have the right,
exercisable by giving written notice thereof to the Administrative Agent at
least three Business Days' prior to the affected prepayment, to allocate in its
sole discretion as between the Tranche A-1 Term Loans, on the one hand, and the
Tranche A-2 Term Loans, on the other hand, the aggregate amount otherwise
payable in respect of such Loans in accordance with this sentence.
(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 Lenders) 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 subsection 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 Lenders)
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.
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(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 Eurocurrency Loans denominated in Dollars to ABR
Loans by giving the Administrative Agent at least three Business Days' prior
irrevocable notice of such election, provided that any such conversion of
Eurocurrency 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 Eurocurrency Loans by giving the Administrative Agent at least three
Business Days' prior irrevocable notice of such election. Any such notice of
conversion to Eurocurrency 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 Eurocurrency 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 Eurocurrency Loan when any Event of
Default has occurred and is continuing and (ii) no Loan may be converted into a
Eurocurrency Loan after the date that is one month 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 Eurocurrency Loans may be continued as such in the same
Currency 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 notice provisions of subsection 2.3, of the
length of the next Interest Period to be applicable to such Loans, provided
that no Eurocurrency 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 Eurocurrency Loans shall
be automatically continued with an Interest Period of the one month.
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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 Dollar
Equivalent 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) 30 Tranches outstanding at any time or (b) 20
Tranches in respect of Revolving Credit Loans, 6 Tranches in respect of Tranche
A-1 Term Loans, 6 Tranches in respect of the Tranche A-2 Term Loans, 6 Tranches
in respect of Tranche B Term Loans or 6 Tranches in respect of Tranche C Term
Loans outstanding at any time.
4.6 Computation of Interest, Fees and Dollar Equivalent Amounts.
(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 determination
of a Eurocurrency 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
effective 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) The Administrative Agent will determine the Dollar Equivalent
Amount with respect to:
(i) any borrowing of Foreign Currency Revolving Credit Loans, on
the second full Business Day preceding the first day of the applicable
Interest Period;
(ii) any Foreign Currency Swing Line Loans made by CIBC, as of the
proposed Borrowing Date thereof;
(iii) any issuance of a Foreign Currency Letter of Credit, as of the
requested issuance date of such Letter of Credit;
(iv) any drawing under a Foreign Currency Letter of Credit and any
calculation of letter of credit fees in respect thereof, as of the date
the Borrower is required pursuant to subsection 3.5 to reimburse the
Issuing Lender;
(v) all outstanding Foreign Currency Revolving Credit Loans,
Foreign Currency Swing Line Loans, L/C Obligations in respect of Foreign
Currency Letters of Credit and Non-Dollar Indebtedness incurred pursuant to
subsection 8.2A(d) for the purposes of calculations under subsection 4.14,
as of the last Business Day of each calendar month or as otherwise
provided for in subsection 4.14;
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(vi) all outstanding Foreign Currency Revolving Credit Loans,
Foreign Currency Swing Line Loans and L/C Obligations in respect of Foreign
Currency Letters of Credit, on any date on which the Revolving Credit
Commitments are reduced pursuant to subsection 2.5;
(vii) all outstanding Foreign Currency Revolving Credit Loans,
Foreign Currency Swing Line Loans and L/C Obligations in respect of Foreign
Currency Letters of Credit, for purposes of calculating compliance with
clause (II) of the proviso to subsection 2.1(a) (as reflected in the
certificate to be delivered by the Borrower pursuant to subsection
7.2(b)(iv)), as of the first day of the thirty-day compliance period
provided for in such clause;
(viii) each Foreign Currency Swing Line Commitment, as of the date
such Foreign Currency Swing Line Commitment is originally extended;
(ix) all Foreign Currency Revolving Credit Loans and L/C
Obligations in respect of Foreign Currency Letters of Credit for purposes
of calculating the letter of credit fees and the commitment fees due the
Revolving Credit Lenders pursuant to subsection 2.4(a), as of the first
Business Day prior to the last day of the fiscal quarter for which
computation thereof is made;
(x) Non-Dollar Indebtedness incurred pursuant to subsection 8.2A
(d), as of the time such Non-Dollar Indebtedness is incurred; and
(xi) Non-Dollar Indebtedness incurred pursuant to subsection 8.2A
(b) and (c), as of the Closing Date.
(c) Each determination of an interest rate or a Dollar Equivalent
Amount 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 reasonable request
of the Borrower or any Lender, deliver to the Borrower or such Lender, as the
case may be, 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 conclusive and binding upon the Borrower) that,
by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurocurrency Rate for any
Currency for such Interest Period, or (b) the Administrative Agent shall have
received notice from the Majority Lenders that the Eurocurrency Rate for any
Currency 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 customarily obtains funds) (as conclusively
certified by such Lenders) of making or maintaining their affected Loans during
such Interest 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 Eurocurrency Loans in
the
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affected Currency 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 Eurocurrency Loans in the
affected Currency shall be converted to or continued as ABR Loans and (z) any
outstanding Eurocurrency Loans in the affected Currency shall be converted, on
the first day of such Interest Period, to ABR Loans provided that nothing in
this sentence shall be deemed to prevent the Eurocurrency Loans in the affected
Currency from being converted to Eurocurrency Loans in another Currency if the
applicable requirements of this Agreement to the prepayment of such
Eurocurrency Loans in the affected Currency and to the making of such
Eurocurrency Loans in such other Currency shall be satisfied. Until such
notice has been withdrawn by the Administrative Agent, no further Eurocurrency
Loans in the affected Currency shall be made or continued as such, nor shall
the Borrower have the right to convert Loans to Eurocurrency Loans in the
affected Currency.
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 commitment 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 prepayment) by the Borrower on account of principal of and
interest on any Revolving Credit Loan shall be allocated by the Administrative
Agent pro rata according to the respective outstanding principal Dollar
Equivalent Amounts of such Revolving Credit Loans then held by the Revolving
Credit Lenders. Each payment (including each prepayment) by the Borrower on
account of principal of and interest on any Tranche A-1 Term Loans, Tranche A-2
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-1 Term Loans, Tranche A-2 Term Loans,
Tranche B Term Loans or Tranche C Term Loans then held by the Term Loan
Lenders. All payments (including prepayments) to be made by the Borrower
hereunder and under any Notes in any Currency, whether on account of principal,
interest, fees, Reimbursement Obligations or otherwise, shall be made in such
Currency 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 Administrative Agent's office specified by the
Administrative Agent from time to time, in such Currency and in immediately
available funds. Payments received by the Administrative Agent after such time
shall be deemed to have been received on the next Business Day. If any payment
hereunder (other than payments on Eurocurrency 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 Eurocurrency 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
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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 Commitment 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 in the case of any amount denominated in Dollars, or the rate customary in
such Currency for settlement of similar interbank obligations in the case of
any amount denominated in an Available Foreign Currency as quoted by the
Administrative Agent, in each case, 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 Percentage 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 applicable to ABR Loans, in
the case of obligations denominated in Dollars, or the rate per annum
applicable to Eurocurrency Loans having an Interest Period of one day, in the
case of payment obligations denominated in an Available Foreign Currency, in
each case, 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 Eurocurrency Loans in Dollars or any Available Foreign Currency or
Foreign Currency Swing Line Loans as contemplated by this Agreement, (a) the
commitment of such Lender hereunder to make Eurocurrency Loans in Dollars or
such Available Foreign Currency or make Foreign Currency Swing Line Loans, as
the case may be, continue Eurocurrency Loans in Dollars or such Available
Foreign Currency, as the case may be, as such and convert ABR Loans to
Eurocurrency Loans in Dollars or such Available Foreign Currency or make
Foreign Currency Swing Line Loans, as the case may be, shall forthwith be
cancelled and (b) such Lender's Loans then outstanding as Eurocurrency Loans in
Dollars or such Available Foreign Currency, as the case may be, if any, shall
be converted automatically to ABR Loans or, if a Foreign Currency Swing Line
Loan, immediately repaid, and 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 Eurocurrency Loan or a Foreign
Currency Swing Line Loan occurs on a day which is not the last day of the then
current Interest Period (or other agreed payment date in the case of a Foreign
Currency Swing Line Loan) with respect thereto, the Borrower shall pay to such
Lender such amounts, if any, as may be required pursuant to subsection 4.12.
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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, any Foreign Currency Swing Line Loan or any
Eurocurrency 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 reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions 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 Eurocurrency Rate hereunder or the rate applicable to
any Foreign Currency Swing Line Loan; 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 Eurocurrency Loans or Foreign Currency Swing
Line 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 hereunder 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 additional 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
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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 and
all interest, penalties or similar liabilities imposed with respect to such
tax, now or hereafter 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 enforced, 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 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 or a state thereof if such Lender fails to comply with the
requirements of paragraph (b) of this subsection. Whenever any Non-Excluded
Taxes are payable by the Borrower, 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 Administrative 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 or a state thereof shall:
(X) in the case of a Lender that is a "bank" within the meaning of
Section 881 (c)(3)(A) of the Code,(i) deliver to the Borrower and the
Administrative Agent (A) two duly completed copies of United States
Internal Revenue Service Form 1001 or
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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 Administrative 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 hereunder 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,
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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 from or into or continuation of Eurocurrency Loans or
Foreign Currency Swing Line Loans after the Borrower has given a notice
requesting the same in accordance with the provisions of this Agreement, (b)
default by the Borrower in making any prepayment of Eurocurrency Loans or
Foreign Currency Swing Line Loans after the Borrower has given a notice thereof
in accordance with the provisions of this Agreement or (c) the making of a
prepayment of Eurocurrency Loans or Foreign Currency Swing Line Loans on a day
which is not the last day of an Interest Period or other agreed payment date
(in the case of Foreign Currency Swing Line Loans) 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 other agreed payment date (in the case of Foreign
Currency Swing Line Loans) (or, in the case of a failure to borrow, convert or
continue, the Interest Period or other agreed loan period (in the case of
Foreign Currency Swing Line Loans) that would have commenced on the date of
such failure) in each case at the applicable rate of interest for such Loans
provided for herein (excluding, 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 institution selected by the Borrower and acceptable to the
Administrative Agent for a purchase price equal to the outstanding principal
Dollar Equivalent Amount of all Loans and
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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.
4.14 Borrower Controls on Non-Dollar Indebtedness; Calculation of
Non-Dollar Extensions of Credit; Prepayments. (a) The Borrower will implement
and maintain internal accounting controls to monitor the borrowings and
repayments of Foreign Currency Revolving Credit Loans (including Foreign
Currency Swing Line Loans), the issuance of and drawings under Foreign Currency
Letters of Credit and other Non-Dollar Indebtedness with the object of
preventing any request for an extension of credit that would result in the
Borrower failing to comply with this Agreement, including subsections 2.1, 2.5,
2.6, 3.1, 4.14 and 8.2A, and of promptly identifying and remedying any
circumstance in accordance with clause (c) below where, by reason of changes in
exchange rates, the Borrower fails to be in compliance with such subsections.
(b) The Administrative Agent will calculate the aggregate amount of
the Exposure (as defined in subsection 4.14(c) below) (i) not more frequently
than monthly as of the last Business Day of each calendar month and (ii) (A) if
a Default or Event of Default shall have occurred and be continuing or (B) if
the Foreign Currency Sublimit Outstandings exceed 90% of the Foreign Currency
Subfacility Amount, then at any such time at the discretion of the
Administrative Agent. In making such calculations, the Administrative Agent
will be entitled to rely on the information most recently received by it (i)
from the Foreign Currency Swing Line Lenders in respect of Foreign Currency
Swing Line Commitments and (ii) in a certificate, in form and substance
satisfactory to the Administrative Agent, delivered by the Borrower in respect
of Indebtedness permitted by subsection 8.2A(d). Upon making each such
calculation, the Administrative Agent will inform the Borrower and each of the
Foreign Currency Swing Line Lenders of the result thereof.
(c) In the event that the Borrower (in accordance with paragraph (a)
above) or the Administrative Agent (in accordance with paragraph (b) above)
determines that the aggregate principal Dollar Equivalent Amount of the sum of
(i) Foreign Currency Revolving Credit Loans, Foreign Currency Swing Line Loans
(including Foreign Currency Swing Line Commitments as provided
for in subsection 2.6(b)) and L/C Obligations in respect of Foreign Currency
Letters of Credit and (ii) Non-Dollar Indebtedness permitted by subsection
8.2A(a)(ii) or (d) ((i) and (ii), collectively, the "Exposure") exceeds
$95,000,000 by more than 5%, the Borrower will, as soon as practicable but in
any event within ten Business Days of
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making such determination, make or cause to be made such repayments or
prepayments of Foreign Currency Revolving Credit Loans (including Foreign
Currency Swing Line Loans) and/or such Non-Dollar Indebtedness (or cash
collateralize Foreign Currency Letters of Credit on terms and conditions
satisfactory to the Administrative Agent) as shall be necessary to reduce the
aggregate amount of the Exposure to less than or equal to $95,000,000.
(d) Any prepayment required to be made pursuant to this subsection
4.14 shall be accompanied by payment of amounts payable, if any, pursuant to
subsection 4.12 in respect of the amount so prepaid.
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 participate in the Letters of
Credit, the Borrower hereby represents and warrants, on the Closing Date (after
giving effect to the consummation 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, 1995, January 31,
1996 and January 31, 1997 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 LLP, 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 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, 1997
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 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 the Borrower 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 exchange transaction, which is not reflected in the foregoing
statements or in the notes thereto. During the period from January 31, 1997 to
and including the Closing Date there has been no sale, transfer or other
disposition 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
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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 the Borrower and its consolidated Subsidiaries at
January 31, 1997.
(b) The consolidated balance sheets of Lemmerz and its Subsidiaries
as of December 31, 1994, December 31, 1995 and December 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 Deutsche Trevhand-Gesellschaft
AG, copies of which have heretofore been furnished to each Lender, are (to the
knowledge of the Borrower in the case of the financial statements as of and for
the fiscal year ended December 31, 1994) complete and correct and present
fairly the consolidated financial condition of Lemmerz 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. All such
financial statements as of and for the periods ended December 31, 1995 and
December 31, 1996, 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 Lemmerz 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 exchange transaction, which is not
reflected in the foregoing statements or in the notes thereto. During the
period from December 31, 1996 to and including the Closing Date, except as
contemplated by the Transactions, there has been no sale, transfer or other
disposition by Lemmerz 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 Lemmerz and its
consolidated Subsidiaries at December 31, 1996.
(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 Subsidiaries as of January 31, 1997 (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 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 (iii) 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
$20,000,000).
5.2 No Change; Solvency. Since January 31, 1997, 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 contemplated by the Loan Documents and the Transactions, the
Borrower and its Subsidiaries are solvent, on a consolidated basis and on an
individual basis.
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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 qualification, except for jurisdictions in which the failure to
so qualify, 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, performance,
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 constitutes 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 Documents 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 performance of the
Loan Documents to which the Borrower or any of the other Loan Parties is a
party or the
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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 material 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, investigation 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 Borrower 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 trademarks, 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
Material 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 (other than
ongoing compliance in the ordinary course of business with tax laws and
Environmental Laws to the extent that the existence thereof could be understood
to have a Material Adverse Effect) or Contractual Obligation of the Borrower or
any of the other Loan Parties could reasonably be expected to have a Material
Adverse Effect.
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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, 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 "accumulated 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 provisions 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 withdrawal 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 preceding 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 other Loan
Party will be kept at, or will be in transit to, the locations listed on
Schedule 5.14, and when financing
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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 "controlled" 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) 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 Acquisition, the jurisdiction of their
incorporation and the direct or indirect ownership interest of the Borrower
therein.
5.17 Purpose of Loans. The proceeds of the Tranche A-2 Loans shall
be used by the Borrower (i) to finance a portion of the Acquisition, (ii) to
finance the Refinancing, and (iii) to pay related fees and expenses. The other
Term Loans constitute continuations thereof made pursuant to the Prior Credit
Agreement the proceeds of which were used for the purposes provided for
therein. The Revolving Credit Loans may be used by the Borrower to finance the
Transactions (in an aggregate principal amount not to exceed $15.6 million
(after giving effect to interim intercompany transfers of funds)) and for the
general corporate purposes of the Borrower and its Subsidiaries.
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:
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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 arbitral 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
Materials 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, administrative, 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 information (including,
without limitation, the Offering Memorandum dated June 19, 1997 relating to the
High-Yield Indebtedness, including the information regarding the financial
performance and financial
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position of Lemmerz and its Consolidated Subsidiaries for the fiscal quarter
ended March 31, 1997), reports, financial statements, exhibits and schedules
furnished by or on behalf of the Borrower and each other Loan Party to the
Administrative Agent, the Documentation Agent and the Lenders in connection
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 material 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 and (b) such assumptions were
believed by such management to be reasonable.
5.21 Delivery of the Transaction Documents. The Administrative Agent
shall have received on or prior to the Closing Date for itself and for each
Lender a complete copy of each of the Transaction Documents (including all
exhibits, schedules and disclosure 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 relating
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 Purchase Agreement (after giving effect to any
amendments, supplements, waivers or other modifications of the Purchase
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
accordance 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 violations
would not reasonably be expected to have a Material Adverse Effect. The
consummation of the Acquisition 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
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Borrower or any other Loan Party (or any predecessor) is a party or by which
the Borrower or any other Loan Party (or any predecessor) is bound.
SECTION 6. CONDITIONS PRECEDENT
6.1 Conditions to Effectiveness. The effectiveness of the agreement
of each Lender to make and/or continue the Loans or other extensions of credit
requested to be made and/or continued by it hereunder is subject to the
satisfaction, immediately prior to or concurrently with the making and/or
continuation of such Loans or other extensions of credit on the Closing Date
(provided that the Closing Date shall occur on or before September 30, 1997),
of the following conditions precedent:
(a) Loan Documents. The Administrative Agent shall have received on
or prior to the Closing Date (i) this Agreement, executed and delivered by
a duly authorized officer of the Borrower, with a counterpart for each
Lender, (ii) for the account of each of the Lenders which has requested a
Note pursuant to any of subsections 2.2, 2.6, 2.8, 2.9, 2.10 and 2.11, a
Revolving Credit Note, a Swing Line Note, a Tranche A-1 Term Note, a
Tranche A-2 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 thereto, with a counterpart or a
conformed copy for each Lender, (iv) a Foreign Stock Pledge Agreement,
with respect to the Capital Stock of HWI Sub and Autokola, each executed
and delivered by a duly authorized officer of each party thereto, with a
counterpart or conformed copy for each Lender, (vii) the Copyright, Patent
and Trademark Security Agreement, executed and delivered by a duly
authorized officer of the Borrower and the other signatories thereto, with
a counterpart or a conformed copy for each Lender and (vii) such
amendments to the Mortgages as may be reasonably requested by the
Administrative Agent, each executed and delivered by a duly authorized
officer of each party thereto, with a counterpart or conformed copy for
each Lender.
(b) Consummation of the Transactions. On or prior to the Closing
Date, (i) the Borrower shall have acquired 99.99% of the Capital Stock of
Lemmerz in accordance with the Purchase Agreement 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
$20,000,000; 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
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conditions of the other agreements to be entered into in connection with
the Transactions shall be reasonably satisfactory to the Lenders in all
material respects.
(c) Proceeds of Issuance of High-Yield Indebtedness. On or prior to
the Closing Date the Borrower shall have received not less than
$250,000,000 in gross cash proceeds from the issuance of the High-Yield
Indebtedness 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
High-Yield Indebtedness and the High-Yield Indebtedness Indenture shall be
reasonably satisfactory in all material respects to the Lenders.
(d) Consent Solicitation. On or prior to the Closing Date, the
Borrower shall have either (i) consummated the Consent Solicitation, and
the Senior Subordinated Notes Indenture shall have been amended in a
manner reasonably satisfactory to the Lenders in all material respects,
which amendment shall, among other things, amend the limitation on
additional indebtedness covenant 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 contemplated thereby, no default or event of
default would exist thereunder or (ii) the Borrower shall have provided
the Administrative Agent with evidence satisfactory to it that such
Consent Solicitation is not necessary to provide that after giving effect
to the consummation of the Transactions, the financing therefor and the
other transactions contemplated thereby, no default or event of default
would exist thereunder.
(e) Existing Indebtedness. The Borrower and its Subsidiaries shall
have no Indebtedness or preferred Capital Stock outstanding on the Closing
Date except for (i) the Loans to be made on the Closing Date, (ii) the
Senior Subordinated Notes, (iii) the Borrower Notes, (iv) the High-Yield
Indebtedness, (v) other Indebtedness permitted by subsection 8.2 or 8.2A
and (vi) the Seller Preferred Stock.
(f) Financial Information. On or prior to the Closing Date, 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 financial statements referred to in subsection 5.1(b) and the
Pro Forma Balance Sheet, in each case, shall not be materially
inconsistent with the applicable forecasts previously provided to the
Lenders.
(g) Solvency Letter. On or prior to the Closing Date, the Lenders
shall have received a solvency letter, in form and substance and from
Houlihan Lokey Howard & Zukin 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 consummation of the other
transactions contemplated thereby and by the Loan Documents.
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(h) Government and Third Party Consents. (i) On or prior to the
Closing Date, all requisite Governmental Authorities and third parties
shall have approved or consented to the Transactions, the financing
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.
(i) Borrowing Certificate. On or prior to the Closing Date, the
Administrative Agent shall have received, with a counterpart for each
Lender, a certificate of the Borrower, dated the Closing Date,
substantially in the form of Exhibit C, with appropriate insertions 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.
(j) Corporate Proceedings of the Loan Parties. On or prior to the
Closing Date, 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 Agreement and the other Loan Documents to
which it is a party, (ii) in the case of the Borrower, the borrowings
contemplated hereunder and (iii) the granting by it of the Liens created
pursuant to the Security Documen- ts, 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.
(k) Incumbency Certificate of the Loan Parties. On or prior to the
Closing Date, 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 Document 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 such Loan
Party.
(l) Corporate Documents. On or prior to the Closing Date, 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.
(m) Consents, Licenses and Approvals. On or prior to the Closing
Date, the Administrative Agent shall have received, with a counterpart for
each Lender, a certificate of a Responsible Officer of the Borrower (i)
attaching copies of all
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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 Administrative
Agent.
(n) 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.
(o) Legal Opinions. On or prior to the Closing Date, 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 LLP, counsel to the Borrower and the other Loan Parties,
substantially in the form of Exhibit D-1, with such changes thereto
as may be approved by the Administrative Agent;
(ii) the executed legal opinion of the general counsel or assistant
general counsel of the Borrower, substantially in the form of Exhibit
D-2, with such changes thereto as may be approved by the
Administrative Agent;
(iii)the executed legal opinions of counsel listed on Schedule
6.1(o), 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
Section 8.2 of the Purchase Agreement and delivered in connection with the
issuance of the High-Yield Indebtedness.
(p) Pledged Stock; Stock Powers; Pledged Notes. The Administrative
Agent shall have received the certificates, if any, representing the
shares pledged pursuant to the Guarantee and Collateral Agreement and the
Foreign Stock Pledge Agreements, 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.
(q) Actions to Perfect Liens. On or prior to the Closing Date, the
Administrative Agent shall have received evidence in form and substance
satisfactory to it that all filings, recordings, registrations 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 shall have been completed or that all such financing
statements and other documents with respect to such filings, recordings,
registrations and other actions shall have been delivered to the
Administrative Agent.
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(r) Global Assignment and Acceptance. On or prior to the Closing
Date, the Administrative Agent shall have received the Global Assignment
and Acceptance, executed and delivered by a duly authorized officer of
each party thereto, with a counterpart or conformed copy for each Lender.
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 specific earlier
date, in which case such representations and warranties shall be true and
correct in all material respects 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 satisfactory 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:
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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 comparative 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 previous fiscal year, reported
on, in the case of such Consolidated 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 consolidated 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 Consolidated 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), (i)
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 consolidated 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) and (ii) a certificate
setting forth in reasonable detail any and all calculations necessary to
show compliance with subsection 8.2A;
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
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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 that such audit shall not have been directed primarily toward
obtaining knowledge of such noncompliance, 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 Certificate") stating that, to the best of such
Officer's knowledge, 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) other than in connection with the Acquisition, (ii)
neither the Borrower nor any of its Subsidiaries has changed its name
(except that the Borrower will change its name following the consummation
of the Acquisition to Hayes Lemmerz International Inc.), 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 observed, 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) (including, but not limited to, the proviso therein (for which the
Borrower shall calculate and provide the Dollar Equivalent Amount of the
Aggregate Outstanding Revolving Credit for the first day of the thirty-day
compliance period provided for therein)) and all of the financial
condition covenants set forth in subsections 8.1 and 8.9, including,
without limitation, calculations and reconciliations, if any, necessary to
show compliance with such financial condition covenants on the basis of
generally accepted accounting principles in the United States consistent
with those utilized in preparing the audited financial statements referred
to in subsection 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 succeeding 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;
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(d) within five days after the same are sent, copies of all financial
statements and reports which the Borrower sends to its stockholders
generally, 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 otherwise satisfy at
or before maturity or before they become delinquent, 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 obligations 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
otherwise 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 aggregate, 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 insurance 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 Leasehold 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 insurance carried.
7.6 Inspection of Property; Books and Records; Discussions. Keep
proper books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and permit
representatives 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, operations, 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
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Borrower shall be permitted to be present at any such discussions between
representatives of any Lender and the Borrower's independent certified public
accountants).
7.7 Notices. Promptly give notice to the Administrative 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 Subsidiaries, 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 determined, as the case may
be, could reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or any of its
Subsidiaries (i) in which the amount involved 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 Adverse
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 institution 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 reasonably 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, circumstance, 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
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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 Subsidiaries that would
reasonably be expected to subject the Borrower or any of its Subsidiaries
to any material additional or different requirements or liabilities under
Environmental Laws, unless the Borrower determines that the total
Environmental Costs arising out of such proposed action are unlikely 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 Subsidiaries. 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 noncompliance, 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 noncompliance
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 designed 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 Borrower, 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 resonable request of the
Administrative Agent, promptly perform or cause to be performed any and all
acts and execute or cause to be
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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 reasonably
necessary or advisable to maintain in favor of the Administrative Agent, for
the benefit of the Lenders, Liens on the Collateral that are duly perfected in
accordance with all applicable 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,
any assets described in paragraph (b) or (c) of this subsection), 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 reasonably
requested by the Administrative Agent, deliver to the Administrative Agent
surveys, title insurance and flood insurance.
(b) With respect to any Person that, subsequent to the Closing Date,
becomes a Subsidiary (other than a Foreign Subsidiary), 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 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 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 Collateral 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.
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(c) With respect to any Person that subsequent to the Closing Date
becomes a Foreign Subsidiary shares of the Capital Stock of which are owned
directly by the Borrower or a Domestic Subsidiary, promptly upon the request of
the Administrative 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 (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 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,
and take or cause to be taken all such other actions under the law of the
jurisdiction of organization of such Foreign Subsidiary 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
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.
(d) At its own expense, request, and use reasonable efforts to obtain,
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 $185,000,000 of Indebtedness of
the Borrower, which shall be in form and substance reasonably satisfactory to
the Administrative Agent and at least $100,000,000 of which shall be for a term
of at least two years.
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:
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Fiscal Quarter Leverage Ratio
-------------- --------------
1997
3rd 5.25 to 1.00
4th 5.25 to 1.00
1998 1st 5.00 to 1.00
2nd 4.75 to 1.00
3rd 4.50 to 1.00
4th 4.25 to 1.00
1999 1st 4.00 to 1.00
2nd 4.00 to 1.00
3rd 3.75 to 1.00
4th 3.50 to 1.00
2000 1st 3.25 to 1.00
2nd 3.25 to 1.00
3rd 3.25 to 1.00
4th 3.25 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
-------------- -----------------------
1997
3rd 2.00 to 1.00
4th 2.00 to 1.00
1998 1st 2.00 to 1.00
2nd 2.25 to 1.00
3rd 2.25 to 1.00
4th 2.25 to 1.00
1999 1st 2.50 to 1.00
2nd 2.50 to 1.00
3rd 2.50 to 1.00
4th 2.75 to 1.00
Thereafter 3.00 to 1.00
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83
(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
-------------- ---------------------------
1997
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 1.05 to 1.00
4th 1.05 to 1.00
1999 1st 1.10 to 1.00
2nd 1.10 to 1.00
Thereafter 1.20 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) Dollar Indebtedness evidenced by the High-Yield Indebtedness, the
Borrower Notes and the Senior Subordinated 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 increased at
the time of such refinancing, refunding, renewal or extension of such
Borrower Notes and the terms and conditions thereof (including, without
limitation, terms and conditions relating to the interest rate, fees,
amortization, maturity, subordination (provided that such terms and
conditions relating to subordination are no less favorable to the Lenders
than those of such Borrower Notes), covenants, events of default and
remedies) are no less favorable to the Borrower than those of such Borrower
Notes as in effect on the Closing Date;
(d) Dollar 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) Dollar Indebtedness outstanding on the Closing Date and, in the
case of Foreign Subsidiaries, committed on the Closing Date and, in each
case, listed on
<PAGE> 90
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Schedule 8.2(e) 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;
(f) Dollar Indebtedness of a Person which becomes a Subsidiary after
the Closing Date; provided that (i) such Indebtedness existed at the time
such Person became a Subsidiary and was 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 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) Dollar Indebtedness of the Borrower and any of its Subsidiaries
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
$35,000,000 at any time outstanding;
(h) Dollar 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) Dollar 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); and
(j) Non-Dollar Indebtedness of the Borrower and its Subsidiaries
permitted by subsection 8.2A.
8.2A Limitation on Non-Dollar Indebtedness and Guarantee Obligations.
Create, incur, assume or suffer to exist any Non-Dollar Indebtedness or any
Guarantee Obligation in respect of Non-Dollar Indebtedness, except:
(a) Non-Dollar Indebtedness in respect of (i) Foreign Currency Swing
Line Loans in an aggregate principal Dollar Equivalent Amount not to exceed
the Foreign Currency Swing Line Subfacility and (ii) one or more loans
denominated in a currency other than Dollars made to the Borrower by one or
more Foreign Currency Swing Line Lenders (other than CIBC) in excess of the
Foreign Currency Swing Line Commitment of the applicable Foreign Currency
Swing Line Lender in an aggregate principal Dollar Equivalent Amount for
all such swing line loans not to exceed $500,000;
(b) Non-Dollar Indebtedness of Lemmerz to IKB in an aggregate
principal amount of approximately 33,800,000 Deutschemarks and existing on
the Closing Date;
<PAGE> 91
85
(c) Non-Dollar Indebtedness of Foreign Subsidiaries in the aggregate
principal amount of approximately 34,200,000 Deutschemarks in connection
with Wechsel financing; provided that the aggregate outstanding principal
Dollar Equivalent Amount of Non-Dollar Indebtedness permitted by this
clause (c), together with the Aggregate Revolving Credit Outstandings,
shall not at any time exceed the aggregate amount of the Revolving Credit
Commitments of all the Revolving Credit Lenders; and
(d) subject to the provisions of subsection 4.14, other unsecured
Non-Dollar Indebtedness in currencies and on terms and conditions approved
in writing by the Administrative Agent (including, without limitation, the
absence of any restrictions on the ability of the applicable Subsidiary
borrowers to pay dividends to, to make loans or advances to, or otherwise
to transfer assets to their respective parents) and of which no more than
the Dollar Equivalent Amount of up to (i) $50,000,000 in aggregate
principal amount may be guaranteed by the Borrower or any of its
Subsidiaries and (ii) $40,000,000 in aggregate principal amount may be
supported by Letters of Credit, provided that, upon the incurrence of any
such Non-Dollar Indebtedness, the Dollar Equivalent Amount of the Foreign
Currency Sublimit Outstandings shall not exceed the Foreign Currency
Subfacility Amount;
(e) Non-Dollar Indebtedness permitted by subsections 8.2(a) and (b);
(f) Guarantee Obligations of the Borrower or any of its Subsidiaries
permitted by paragraph (d) above; and
(g) Non-Dollar 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;
(h) Non-Dollar Indebtedness of Foreign Subsidiaries committed on the
Closing Date and listed on Schedule 8.2A(h) 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; and
(i) Additional unsecured subordinated Non-Dollar Indebtedness of the
Borrower and its Subsidiaries provided that (i) such Non-Dollar
Indebtedness shall not exceed $200,000,000 in aggregate principal Dollar
Equivalent Amount at any time outstanding plus any additional principal
amount of such Non-Dollar Indebtedness issued in lieu of cash interest on
such outstanding Non-Dollar Indebtedness or any refinancing thereof, (ii)
no part of the principal amount of such Non-Dollar Indebtedness shall have
a maturity date earlier than December 31, 2006, (iii) the non-default
interest rate thereon shall not exceed 12.5% per annum, (iv) the other
terms and conditions thereof (including, without limitation, the terms and
conditions relating to fees, amortization, covenants, events of default,
remedies and subordination) taken as a whole, shall be no less favorable to
the Lenders than the terms and conditions of the High-Yield Indebtedness
and (v) the Net Cash Proceeds of such Non-Dollar
<PAGE> 92
86
Indebtedness are applied toward the prepayment of the Loans and the
permanent reduction of the Revolving Credit Commitments in accordance with
subsection 4.3(b).
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 principles in effect
from time to time in their respective jurisdictions 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 security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements;
(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 subject thereto;
(f) Liens on the property or assets of a Person which becomes a
Subsidiary after the Closing Date securing Indebtedness permitted by
subsection 8.2(f); provided that (i) such Liens existed at the time such
Person became a Subsidiary 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 Subsidiary, and (iii) the
amount of Indebtedness secured thereby 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 subsection 8.2A(h); provided that no
such Lien is spread to
<PAGE> 93
87
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 simultaneously with the acquisition of such fixed or capital
assets, (ii) such Liens do not at any time encumber any property 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 (including, in the case
of any Foreign Subsidiary which is not a direct Subsidiary of the Borrower
or any Domestic Subsidiary, the Capital Stock of such Foreign Subsidiary)
securing Indebtedness of such Foreign Subsidiary permitted by subsection
8.2A;
(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 prosecuted 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 interfering 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); and
(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.
8.4 Limitation on Guarantee Obligations. Create, incur, assume or
suffer to exist any Guarantee Obligation except (subject to the provisions of
subsection 8.2A):
(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;
<PAGE> 94
88
(c) the Guarantee and Collateral Agreement and any of the other
Guarantees;
(d) Guarantee Obligations of certain Subsidiaries of the Borrower (i)
set forth in the Senior Subordinated Notes and the Senior Subordinated
Notes Indenture which are subordinated as provided therein or (ii) set
forth in the High-Yield Indebtedness and the High-Yield Indebtedness
Indenture which are subordinated 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 Investments 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 any Reimbursement Obligation
in respect of 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 Default
shall have occurred and be continuing, and any refinancings, refundings,
renewals or extensions thereof; provided, further, 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 corporation);
(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
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89
(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 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 or 8.2A
within 180 days of receipt thereof or (y) acquire assets used or useful in
the businesses of Foreign Subsidiaries within 180 days of receipt thereof,
shall not be required to be applied to make mandatory 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 thereof;
(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, subsection 8.10;
(g) the sale or other disposition of any accounts receivable in
connection with a receivables financing transaction on terms and conditions
and pursuant to documentation reasonably satisfactory to the Majority
Lenders; provided that all of the
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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);
(h) dispositions resulting from any casualty or condemnation 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 subsection 4.3(h); and
(i) the sale or other disposition of any Specified Assets at fair
market value; provided that the Net Cash Proceeds of all sales of Specified
Assets permitted by this clause (i) 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 Specified Assets permitted by this clause
(i) to the extent that they are used to (x) make Investments permitted by
subsection 8.10(e) within 180 days of receipt thereof or (y) acquire assets
used or useful in the businesses of Subsidiaries within 180 days of receipt
thereof, shall not be required to be applied to make mandatory prepayments
and permanent reductions of the Revolving Credit Commitments pursuant to
subsection 4.3(c).
8.7 Limitation on Leases. Permit Lease Expense for any fiscal year
of the Borrower to exceed $35,000,000.
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, other
than pursuant to subsection 8.10, 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
----------- ------
February 1, 1997 - January 31, 1998 $ 130,000,000
February 1, 1998 - January 31, 1999 130,000,000
February 1, 1999 - January 31, 2000 120,000,000
February 1, 2000 - January 31, 2001 120,000,000
February 1, 2001 - January 31, 2002 120,000,000
February 1, 2002 - January 31, 2003 120,000,000
February 1, 2003 - January 31, 2004 120,000,000
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February 1, 2004 - January 31, 2005 120,000,000
provided that (a) up to $35,000,000 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 $15,000,000 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 contribution 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 Subsidiaries in a
Person, if as a result of any such Investment (i) such Person becomes a
Subsidiary of the Borrower, subject to compliance with subsection 7.10, or
(ii) such Person is merged or consolidated with or into, or transfers or
conveys the assets which are the subject of such Investment to, or is
liquidated into, the Borrower or any of its Subsidiaries; provided that (w)
no Default or Event of Default shall have occurred and be continuing on the
date of any such Investment or would result therefrom, (x) the aggregate
amount of consideration (other than consideration consisting of common
stock of the Borrower) given by the Borrower and its Subsidiaries in
respect of such Investments ("Non-Stock Consideration") subsequent to the
date hereof shall not
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92
exceed the sum of (1) $70,000,000 (provided that no more than $35,000,000
of such amount shall have been given as Non-Stock Consideration for
Investments other than Specified Investments) plus (2) the lesser of (I)
$80,000,000 and (II) the aggregate amount of Net Cash Proceeds received by
the Borrower and its Subsidiaries subsequent to the date hereof from the
sale of Specified Assets (except to the extent that the Net Cash Proceeds
thereof (A) shall not have been utilized within 180 days of the related
sale to make an Investment permitted by this paragraph or (B) shall have
been utilized in accordance with subsection 8.6(b) to acquire fixed or
capital assets) and from the sale of shares of its common stock, (y) no
Investment shall be permitted pursuant to this paragraph which would result
in the aggregate amount of Non-Stock Consideration given for all such
Investments exceeding $70,000,000 unless, after giving effect thereto, the
Pro-Forma Leverage Ratio would be less than 4.5 to 1.0, and (z) the
aggregate amount of Non-Stock Consideration given in connection with any
Investment permitted pursuant to this paragraph shall not exceed
$25,000,000.
(f) Investments by the Borrower or any of its Subsidiaries 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 $15,000,000 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 addition to those permitted by subsection 8.10(k)) 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 and disregarding the amount of any Investments permitted by
subsection 8.10(k), not to exceed $35,000,000 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 aggregated with the
amount of any Guarantee Obligations permitted by subsection 8.4(e) which
are outstanding at such time, shall not exceed $15,000,000 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
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obligations; provided that such promissory 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;
(i) Investments paid for solely in common stock of the Borrower;
(j) the Acquisition; and
(k) Investments in existence on the date hereof in joint ventures
that are listed on Schedule 8.10(k).
8.11 Limitation on Optional Payments and Modifications of Debt
Instruments and Transaction Documents. 1. (i) Make any optional payment or
prepayment on or repurchase or redemption or purchase of the High-Yield
Indebtedness, the Senior Subordinated Notes or the Borrower Notes (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 or any
instrument, document or other agreement pursuant to which the same shall have
been issued or created (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) or (iii) 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 or the High-Yield
Indebtedness 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 the High-Yield Indebtedness 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 collateralized 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 hereunder 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
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investment banking underwriter, placement agent or financial advisor fees paid
to CIBC and its Affiliates in connection 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 property, 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 Subordinated Notes Indenture or
the High-Yield Indebtedness 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 Indebtedness 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 hereunder 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 agreements 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
otherwise 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 "Permitted Hedging Arrangement"), including the two
Dollar/Deutschemark currency swaps entered into by the Borrower on or prior to
the Closing Date in connection with the High-Yield Indebtedness.
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 accordance 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
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accordance with the terms thereof or hereof (it being agreed that any
amounts payable hereunder (other than principal, interest, commitment fees
and letter of credit fees) shall be due on the date which is five days
after the Administrative Agent or the applicable Lender shall give written
notice thereof to the Borrower); 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 certificate, 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 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, if any, provided in the instrument or agreement under
which such Indebtedness 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 required, 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, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or
its debts, or (B) seeking appointment of a receiver, trustee, custodian,
conser-
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vator 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
commenced 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 furtherance 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 Section 4975 of the Code) involving any
Plan, (ii) any "accumulated 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 Controlled 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 Lenders, 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
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and of the same effect and priority purported to be created thereby, and,
in any such case, such cessation or, in the case of clause (i), assertion
thereof shall affect a material portion of the Collateral; 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 Indenture, to the obligations of the Borrower
under this Agreement, any Notes and the other Loan Documents, or the
obligations 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 obligations of such Loan Party under the Guarantee
and Collateral Agreement or any of the Guarantees to which it is a party;
or
(l) The High-Yield Indebtedness, for any reason, shall not be or
shall cease to be validly subordinated, as provided therein and in the
High-Yield Indebtedness Indenture, to the obligations of the Borrower under
this Agreement, any Notes and the other Loan Documents, or the obligations
of any other Loan Party under a guarantee of the High-Yield Indebtedness,
for any reason, shall not be or shall cease to be validly subordinated as
provided therein and in the High-Yield Indebtedness Indenture to the
obligations of such Loan Party under the Guarantee and Collateral Agreement
or any of the Guarantees to which it is a party; or
(m) (i) If any of the remaining contributions referred to in the PBGC
Agreement 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 remaining contributions in an aggregate amount in excess of
$10,000,000 shall become immediately due and payable prior to the stated
maturity thereof 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 Agreement or the definitive
documentation with respect to the PBGC Agreement (it being understood and
agreed that the Lenders shall not seek to enjoin any such Liens from
arising based on subsection 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 Commitments 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 Administrative Agent shall, by notice to
the Borrower declare the Commitments to be terminated forthwith, whereupon the
Commitments shall immediately terminate; and (ii) with
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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 (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) 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 aggregate 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 security 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 hereunder and under the Notes shall have
been paid in full, the balance, 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 collateral 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
Documentation 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
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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 Administrative 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 performance 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 Documentation Agent. Each
of the Administrative Agent and the Documentation Agent shall be entitled to
rely, and shall be fully protected in relying, upon any Note, writing,
resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or
teletype message, statement, order or other document or conversation 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
accountants 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.
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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 Administrative 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
reasonably 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 received 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, Documentation 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 representations 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, 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 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 expressly required to be furnished to
the Lenders by the Administrative Agent hereunder, the Administrative Agent and
the Documentation Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning 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
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according to their respective Commitment 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 transactions 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 Documentation 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 Administrative 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 Administrative Agent hereunder. Effective upon such
appointment and approval, the term "Administrative Agent" shall mean such
successor 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 Administrative 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.
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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.
10.12 Foreign Pledge Agreement. Each Lender hereby authorizes the
Administrative Agent to enter into a Foreign Stock Pledge Agreement with HWI
Europe Ltd., 38481 Huron River Drive, Romulus, Michigan, pursuant to which
certain present and future shares in HWI Sub as well as certain rights and
claims relating thereto are pledged as security to the Lenders and the
Administrative Agent. The Administrative Agent is authorized to agree on any
provisions and to make all declarations that it considers in its discretion
necessary or appropriate in this context, including any amendments of such
Foreign Stock Pledge Agreement. The Administrative Agent is released of the
restrictions set forth in Section 181 German Civil Code and authorized to
delegate this power of attorney or grant sub-power of attorney.
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
Administrative Agent may, from time to time, (a) enter into with the Borrower
and the other Loan Parties written amendments, supplements or modifications
hereto and to the other Loan Documents for the purpose of amending,
supplementing or modifying any provisions 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 conditions as the
Majority Lenders or the Administrative Agent, as the case may be, may specify in
such instrument, any of the requirements of this Agreement or the other Loan
Documents or any Default or Event of Default and its consequences; provided 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
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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 obligations 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
(w) the Tranche A-1 Term Loan Lenders the Tranche A-1 Term Loan Commitment
Percentages of which aggregate more than 50%, (x) the Tranche A-2 Term Loan
Lenders the Tranche A-2 Term Loan Commitment Percentages of which aggregate
more then 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 scheduled date of maturity
of any Loan or any installment thereof, amend, modify or waive any
provision of (w) subsection 2.7 (to the extent subsection 2.7 relates to
the Tranche A-1 Term Loans) or subsection 2.8 without the written consent
of Tranche A-1 Term Loan Lenders the Tranche A-1 Term Loan Commitment
Percentages of which aggregate more than 50%, (x) subsection 2.7 (to the
extent subsection 2.7 relates to the Tranche A-2 Term Loans) or subsection
2.9 without the written consent of Tranche A-2 Term Loan Lenders the
Tranche A-2 Term Loan Commitment 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 2.10 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 relates to the Tranche C Term Loans) or subsection 2.11
without 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 Reimbursement Obligation,
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Section 3 without the written consent of the Revolving Credit Lenders the
Revolving Credit Commitment Percentages of which aggregate more than 50%;
or
(vii) amend, modify or waive any provision of any Swing Line
Note or subsection 2.6 without the written consent of each Swing Line
Lender affected thereby; or
(viii) amend, modify or waive the provisions of any Letter of
Credit or any L/C Obligation without the written consent of the affected
Issuing Lender; or
(ix) amend, modify or waive any provision of any Security
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 (v) the
Majority Revolving Credit Lenders, (w) the Tranche A-1 Term Loan Lenders
the Tranche A-1 Term Loan Commitment Percentages of which aggregate more
than 50%, (x) the Tranche A-2 Term Loan Lenders the Tranche A-2 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 otherwise 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:
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105
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
South Tower
New York, New York 10281
Attention: Christopher Reilly
Fax: (212) 623-7584
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, 2.12, 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 Administrative Agent or any Lender, any
right, remedy, power or privilege 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.
<PAGE> 112
106
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 delivered 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, preparation and execution of, and any amendment, supplement or
modification 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 contemplated 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 preservation 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 contemplated 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 violation
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 obligation
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.
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107
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 applicable 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 interest 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 participation 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 Default, 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 Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement, 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 applicable 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
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assigning Lender (and, in the case of an Assignee that is not then a Lender or
a branch or an affiliate thereof, by the Borrower and the Administrative Agent)
and delivered to the Administrative Agent for its acceptance and recording in
the Register, provided that, in the case of any such assignment to an
additional 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 Acceptance, 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 obligations 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 Borrower, 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. Notes and
the Loans evidenced thereby may be assigned or otherwise transferred in whole or
in part only by registration of such assignment or transfer on the Register (and
each Note shall expressly so provide). Any assignment or transfer of all or
part of such Loans and the Notes evidencing the same shall be registered on the
Register only upon surrender for registration of assignment or transfer of the
Notes evidencing such Loans, accompanied by a duly executed Assignment and
Acceptance, and thereupon one or more new Notes in the same aggregate principal
amount shall be issued to the designated Assignee and the old Note shall be
returned by the Administrative Agent to the Borrower marked "cancelled". 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
obligation 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 (whether or not evidenced by a Note)
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
reasonable prior notice.
<PAGE> 115
109
(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
processing fee of $3,500, the Administrative Agent shall promptly accept such
Assignment and Acceptance and record the information contained therein in the
Register. 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 participating 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 benefitted Lender to
share the excess payment or benefits of such collateral or proceeds ratably with
each of the Lenders; provided 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
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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 hereunder (whether at
the stated maturity, by acceleration or otherwise) to set-off and appropriate
and apply against such amount any and all deposits (general or special, time or
demand, provisional or final), in any currency, and any other credits,
indebtedness 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 Borrower. 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 remaining 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, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to subject matter hereof not expressly 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 recognition 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 for the Southern
District of New York, and appellate courts from any thereof;
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(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 proceeding 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
address 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 jurisdiction; 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 acknowledges 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 transactions 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, prospective Transferee or to
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any direct or indirect contractual counterparty in swap agreements payments
with respect to which are related to payments made pursuant to this Agreement
or such contractual counterparty's professional advisors, in each case, which
agrees to comply with the provisions 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 connection 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.
11.16 Effect of Amendment and Restatement of the Prior Credit
Agreement. On the Closing Date, the Prior Credit Agreement shall be amended,
restated and superseded in its entirety. The parties hereto acknowledge and
agree that (a) this Agreement and the other Loan Documents executed and
delivered in connection herewith do not constitute a novation, payment and
reborrowing, or termination of the "Obligations" (as defined in the Loan
Documents in respect of the Prior Credit Agreement) under the Prior Credit
Agreement as in effect prior to the Closing Date; (b) such "Obligations" are in
all respects continuing (as amended and restated hereby) with only the terms
thereof being modified as provided in this Agreement; and (c) the Liens and
security interests as granted under the Security Documents (as defined herein)
securing payment of such "Obligations" are in all respects continuing and in
full force and effect and secure the payment of the Obligations (as defined in
the Loan Documents in respect of this Agreement).
11.17 Judgment. (a) If for the purpose of obtaining judgment in any
court it is necessary to convert a sum due hereunder in one currency into
another currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Administrative Agent could
purchase the first currency with such other currency on the Business Day
preceding the day on which final judgment is given.
(b) The obligation of the Borrower in respect of any sum due to any
Lender or the Administrative Agent hereunder shall, notwithstanding any judgment
in a currency (the "Judgment Currency") other than that in which such sum is
denominated in accordance with the applicable provisions of this Agreement or
the other Loan Documents (the "Agreement Currency"), be discharged only to the
extent that on the Business Day following receipt by such Lender or the
Administrative Agent (as the case may be) of any sum adjudged to be so due in
the Judgment Currency such Lender or the Administrative Agent (as the case may
be) may in accordance with normal banking procedures purchase the Agreement
Currency with the Judgment Currency; if the amount of the Agreement Currency so
purchased is less than the sum originally due to such Lender or the
Administrative Agent (as the case may be) in the Agreement Currency, the
Borrower agrees, as a separate obligation and notwithstanding any such judgment,
to indemnify such Lender or the Administrative Agent (as the case may be)
against such loss, and if the amount of the Agreement Currency so purchased
exceeds the sum originally due to any Lender or the Administrative Agent (as the
case may be), such
<PAGE> 119
113
Lender or the Administrative Agent (as the case may be) agrees to remit to the
Borrower such excess. The obligations of the Borrower contained in this
subsection 11.17 shall survive the termination of this Agreement and the
payment of all amounts owing hereunder.
11.18 Purchase and Sale of Revolving Credit Commitments, Revolving
Credit Loans and Term Loans (other than Tranche A-2 Term Loans). On the Closing
Date, pursuant to an assignment and acceptance (the "Global Assignment and
Acceptance") in form and substance satisfactory to the Administrative Agent, but
immediately prior to any borrowing on such date under this Agreement, without
the necessity of further action by any party, one or more Lenders under the
Prior Credit Agreement (the "Selling Lenders") as specified in the Global
Assignment and Acceptance shall sell, transfer and assign to the Lenders as
allocated by the Administrative Agent the Selling Lender's right, title and
interest in and to (a) its Revolving Credit Commitments and/or Revolving Credit
Loans and/or (b) Term Loans (other than Tranche A-2 Term Loans), as the case may
be, as specified in the Global Assignment and Acceptance, without recourse,
representation or warranty, and each Lender shall purchase, take and acquire
from a Selling Lender a portion of such Selling Lender's right, title and
interest in and to (a) its Revolving Credit Commitments and/or Revolving Credit
Loans and/or (b) Term Loans (other than Tranche A-2 Term Loans), as the case may
be, as allocated by the Administrative Agent, so that after giving effect to all
such transfers and the other allocations, commitments and continuations made by
the Administrative Agent and the Lenders in connection with the Closing Date,
each Lender's interest in the Revolving Credit Commitments and/or Revolving
Credit Loans and/or Term Loans (other than Tranche A-2 Term Loans), as the case
may be, shall be as specified in the Global Assignment and Acceptance. Each
Lender's signature below shall constitute execution, delivery and acceptance of
the Global Assignment and Acceptance.
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.
[SIGNATURE BLOCKS]
<PAGE> 120
SCHEDULE B
APPLICABLE MARGIN AND APPLICABLE COMMITMENT FEE RATE
APPLICABLE MARGIN
<TABLE>
<CAPTION>
Eurocurrency Loans
Revolving Credit and Eurodollar Loans Eurodollar Loans Applicable
Leverage Ratio ABR Loans Tranches A-1 and A-2 Tranche B Tranche C Commitment Fee
Rate
-------------------------------- ------------- ------------------------ ---------------- ---- ------------------ ----------------
<S> <C> <C> <C> <C> <C>
Greater than or equal to 4.50 to 1.25% 2.25% 2.75% 3.00% 0.50%
1.00
Less than 4.50 to 1.00 but 1.00% 2.00% 2.50% 2.75% 0.50%
greater than or equal to 4.25
1.00
Less than 4.25 to 1.00 but 0.75% 1.75% 2.25% 2.50% 0.375%
greater than or equal to 4.0
1.00
Less than 4.0 to 1.00 but 0.50% 1.50% 2.25% 2.50% 0.375%
greater than or equal to 3.75
1.00
Less than 3.75 to 1.00 but 0.25% 1.25% 2.25% 2.50% 0.375%
greater than or equal to 3.25
1.00
Less than 3.25 to 1.00 but 0.125% 1.00% 2.25% 2.50% 0.25%
greater than or equal to 2.75
1.00
Less than 2.75 to 1.00 0.00% 0.75% 2.25% 2.50% 0.25%
</TABLE>
<PAGE> 121
SCHEDULE D
AVAILABLE FOREIGN CURRENCIES
TRANCHE A-2 TERM LOANS
1. Deutsche marks or such other lawful currency of Germany.
FOREIGN CURRENCY REVOLVING CREDIT LOANS AND
FOREIGN CURRENCY LETTERS OF CREDIT
1. Deutschemarks or such other lawful currency of Germany.
2. U.K. Pounds Sterling or such other lawful currency of England.
3. French Francs or such other lawful currency of France.
FOREIGN CURRENCY SWING LINE LOANS
1. Deutschemarks or such other lawful currency of Germany.
2. Lire or such other lawful currency of Italy.
3. Belgian Francs or such other lawful currency of Belgium.
4. Guilders or such other lawful currency of The Netherlands.
5. Pesetas or such other lawful currency of Spain.
6. Turkish Lira or such other lawful currency of Turkey.
<PAGE> 1
[HAYES LOGO]
NEWS RELEASE
CONTACT: LEE ANN WELSH
FRANCO PUBLIC RELATIONS GROUP
(313) 567-5087
HAYES WHEELS COMPLETES $425 MILLION
ACQUISITION OF LEMMERZ HOLDING FOR IMMEDIATE RELEASE
ROMULUS, Mich., June 30, 1997 -- Hayes Wheels International, Inc.
(NASDAQ: HAYS) announced today that it has completed its previously announced
acquisition of Lemmerz Holding GmbH, Europe's leading full-line wheel supplier.
As a result of the transaction, Lemmerz has become a wholly owned subsidiary of
Hayes Wheels and, pending shareholder approval later this year, the combined
company will be renamed Hayes Lemmerz International, Inc.
"We are now a $1.4 billion company that serves every major OEM in
North America, Europe and Japan, and we hold market leadership in each market
we supply," said Ron Cucuz, chairman and chief executive officer of Hayes
Wheels. "The synergies expected from combining the two companies will provide
additional opportunities for growth in sales and profits and will expand our
position as a leading supplier of wheels and brake products to the worldwide
transportation industry."
<PAGE> 2
FOR: HAYES WHEELS INTERNATIONAL Page Two
To finance the transaction, Hayes increased its total senior secured
credit facilities from $640.5 million to $740.5 million. Canadian Imperial
Bank of Commerce acted as Administrative Agent and Merrill Lynch Capital
Corporation as Documentation Agent on the bank financing. Hayes also issued
$250 million in 9 1/8% percent senior subordinated notes due 2007. In
addition, Lemmerz shareholders will receive shares of Hayes preferred stock
which will automatically convert into 5.0 million shares of Hayes common stock
upon receipt of shareholder approval. The total transaction is valued at
approximately $425 million.
Hayes also announced that its consent solicitation with respect to
proposed amendments to the Indenture governing its 11% Senior Subordinated
Notes due 2006 expired today at 11:00 a.m., New York City time. Hayes
indicated that it had received consents from the holders of approximately $178
million aggregate principal amount of the notes, which was sufficient to
approve the proposed amendments. As a result of the consummation of the
Lemmerz acquisition, the amendments to the indenture have become operative.
A privately owned company based in Konigswinter, Germany, Lemmerz
designs and produces steel and aluminum wheels for automobiles and heavy-duty
vehicles.
Hayes Wheels International is a world leader in the design,
engineering 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.
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